Four Insights from the ULI Regional Housing Summit
- Jerry Paytas, Ph.D.
- Apr 29
- 3 min read
On April 8, 2026, the ULI San Diego/Tijuana Regional Housing Summit brought together industry leaders, policymakers, and developers for a half-day exploration of the most pressing challenges in today’s residential market. From the rising costs of labor to innovative school district housing initiatives, the summit highlighted both the barriers and the creative solutions defining the San Diego/Tijuana region's future. Working at the intersection of housing, economic development, and transportation, these challenges are core to the work we do at Fourth Economy and Steer.
The Economic Reality: High Costs are the New Normal
Housing production is currently navigating a "new environment" defined by significant economic headwinds. The general consensus among experts is that higher costs are here to stay, making it imperative to find new ways to address affordability.
Rising Construction Costs: Costs have climbed from an annual rate of 3.3% to over 7.7%, according to the California Department of General Services.
The Energy Squeeze: If oil prices remain above $75 to $100 (or higher) per barrel, we can expect further increases in material and supply chain costs.
Labor Shortages: California’s construction workforce is highly dependent on immigrant labor. Recent enforcement actions are expected to further shrink this labor pool, driving wages—and project totals—even higher.
Interest Rates: Rather than just federal policy, current high interest rates appear to reflect market confidence and remain a primary barrier to home affordability.
Production Trends: Are We Building the Right Mix?
While San Diego is keeping pace with other high-growth metros in multi-family production, the type of units being built is a point of debate.
The Small Unit Surge: Studios, 1-bedroom apartments, and Accessory Dwelling Units (ADUs) now account for roughly 40% of San Diego’s housing production. While these serve younger households and empty nesters, there is concern that we may be oversupplying small units while ignoring families.
The "Expansion" Gap: A shortage of 2-3 bedroom units could become a limiting factor for the region, as younger households may be forced to leave when they choose to expand their families.
Policy Drivers: Density and Innovation
Navigating the "complex web" of state and local policy is essential for moving projects forward. The summit highlighted several key tools:
Complete Communities & Density Bonuses: San Diego’s Complete Communities, combined with California’s Density Bonus Law can promote unlimited density and height in specific transit-priority areas.
FAR-Based Planning: San Diego’s Complete Communities has shifted from strict dwelling unit limits to a Floor Area Ratio (FAR) system. This allows for much higher building capacities in exchange for including affordable housing units.
The Infill Challenge: Despite these incentives, projects often stall due to local opposition to higher densities and a lack of available land for greenfield development.
A New Developer: The San Diego Unified School District
Perhaps the most innovative trend discussed was the entry of school districts into the housing market. To combat teacher shortages driven by high living costs, the San Diego Unified School District is moving forward with plans for nearly 2,400 housing units on school sites.
Through joint-use occupancy agreements, the district will retain land ownership while collecting revenue from developers. Key upcoming projects include:
University Heights (Brucker Education Center): 1,500 units for those earning 50% to 120% of the Area Median Income (AMI).
Old Town (Fremont/Ballard Center): 420 units ranging from 30% AMI to market rate.
Linda Vista & Logan Heights: Nearly 500 additional units targeted at various affordability levels.
By aiming to house 10% of its workforce by 2030, the district is providing a blueprint for how agencies can leverage their public land to solve the housing crisis. Personally, I am torn between applauding SDUSD for its innovation and lamenting that school districts must address affordable housing while also fulfilling their core mission of teaching (and often feeding) our children.
