Project Brings Much-Needed Affordable Housing To Downtown San Diego

With San Diego housing costs on the rise, the introduction of a new affordable housing project opens up apartments to those who would otherwise be unable to afford them.

Vicki and Ted Lozano, seniors with disabilities who had been on an affordable housing wait list for nearly 10 years, are among the families moving into Atmosphere, San Diego’s newest affordable housing project, which held its grand opening celebration Thursday. The $79.3M project has 205 units and broke ground in March 2015.

The couple spent 25 years building a successful interior design business and owned a home, but lost everything in 2008 when the economy collapsed, and they ended up basically homeless.

Over the ensuing stressful years, both Vicki and Ted developed catastrophic health issues. Vicki developed a type of cancer that required multiple surgeries, and Ted developed Parkinson’s disease, Vicki Lozano said.

Living on disability, the couple struggled.

“We couldn’t afford to eat and pay rent too,” she said.

When offered an affordable housing unit, Vicki Lozano said they didn’t know what to expect.

“I thought affordable housing would be the slums,” she said, while showing guests around her modern new digs at 1453 Fourth Ave. in the Cortez Hill neighborhood, on the edges of the Gaslamp Quarter and Little Italy.

“When we moved in, we didn’t have any furniture,” Vicki Lozano said.

Their son had new furniture delivered the very next day.

”Being able to pay rent and have money left over for food and other necessities feels so good," she said. "I finally feel like I’m on top of my life again, and I have hope that things will continue to get better for us.”

More families struggle to find housing in San Diego as the price of renting or owning continues to rise.

The median rent and home prices in San Diego rose to record highs in 2016, while the average household income declined 4.7%, from $70,639 in 2007 to just $67,320, according to the U.S. Census.

The average rent hit $1,743 in 2016, reported MarketPointe Realty Advisors. The average home price is now $589,260, which requires $114K in income annually to qualify for a mortgage, according to the California Association of Realtors. The average San Diego working family earning the median household income can afford to pay $1,500/month in rent or buy a home priced at $225K, often substantially lower than what is on the market.

While there is little relief for middle-income families, the city and its affordable housing partners produced 1,043 affordable housing units for low-income residents over the last year, including 281 units of supportive housing for homeless residents.

Atmosphere residents are a mix of age groups and circumstances, including seniors with disabilities, formerly homeless veterans and single mothers with small children who cannot afford to pay San Diego’s market-rate rents.

Developed by nonprofit Wakeland Housing & Development Corp. in partnership with public and private for-profit funding sources, the 12-story, 205-unit, 218K SF project with 700 SF ground-level retail provides studio, one-, two- and three-bedroom units for qualifying families earning roughly $17K to $48K. Rents range from $525 to $1,250/month. The project includes 51 permanent, supportive, fully furnished studio units for people who were recently homeless, including individuals with mental disabilities.

Designed by local architect Joseph Wong Design Associates and built by San Diego-based Suffolk Construction, Atmosphere will achieve a LEED Silver certification and features modern homes around an open central courtyard with three levels of underground parking.

Amenities include a large rooftop terrace with a community kitchen, barbecue grills, tables with seating and views of the San Diego Bay; a tot lot/play area; two terraces with seating; community room/computer lab; and business center with computers.

Wakeland provides a variety of resident services, including mail area with electronic package delivery system, two on-site laundry facilities, 24-hour security and on-site resident manager. The site also has various programs, such as job-search and resume-building assistance, financial literacy workshops and an after-school program.

A locally based affordable housing developer, Wakeland has developed 40 projects with about 7,000 units statewide over the last 18 years. About half are in San Diego County. Atmosphere is the first of two affordable housing projects Wakeland will deliver in 2017. A 51-unit project at J Street and 14th Avenue, called Lillian Place Parkside, is under construction in East Village.

Atmosphere is Wakeland’s largest and most unique project, according to Wakeland president/CEO Ken Sauder.

“Atmosphere is really special because it serves the broad spectrum of people who need affordable homes,” he said. “In particular, Wakeland is gratified that Atmosphere addresses San Diego’s growing need for permanent supportive housing and will help some of our most vulnerable neighbors find stability.

“We provide wrap-around services — whatever is needed to stabilize recently homeless individuals,” Sauder said.

Wakeland has contracts with CRF (Community Research Foundation) and PATH (People Assisting the Homeless) to provide social and mental health services to residents. The project also provides six rooms for resident meetings with caseworkers.

Elaine Camuso, Wakeland communications manager, said the project incorporates the Housing First model adopted by the San Diego Housing Commission. Funded with federal rent housing vouchers, the Housing First model uses a combination of housing and services to create a long-term solution for chronic homelessness. She said cities across the country have adopted this program, which has a 90% success rate for stabilizing and keeping the chronically homeless in housing long term.

Atmosphere was funded with a unique mix of sources, including both 9% and 4% state tax credits, state infill funding, funds from the County of San Diego, vouchers from the San Diego Housing Commission and former redevelopment agency funds from Civic San Diego.

With 205 units, it could potentially provide affordable homes to more than 10,000 San Diegans over its expected 55-year life span, as residents succeed and move out to make room for other neighbors in need, Wakeland stated in a press release.

“Atmosphere is an outstanding example of the type of partnership development that is needed to address San Diego’s shortage of affordable housing for low-income families and homeless San Diegans,” said San Diego Housing Commission chairman of the board Frank Urtasun.

SDHC committed 51 federal housing vouchers to provide rental assistance for homeless residents at Atmosphere.

Civic San Diego president Reese A. Jarrett said affordable housing continues to be a priority for the city, despite the loss of redevelopment agency funds.

“This is a prime example of what can happen through public-private partnerships,” he said.

Vihar Sheth, senior vice president of U.S. Bancorp Community Development Corp., a division of U.S. Bank, said Atmosphere provides a safe home that will change residents’ lives for the better. US Bank provided $51M in construction financing, which was replaced by permanent financing that included other sources of funding and a $44M tax-credit equity investment through the bank's community development subsidiary.

There are challenges ahead for affordable housing developers and city efforts to house the homeless. Proposed cuts in the corporate income tax will decrease the amount of funding available from the tax credit program.

“There will less of an appetite by corporations to participate,” Sauder said.

He said since President Donald Trump's election, funding from tax credits has declined by 15% and will probably drop another 10% when tax reform is a done deal.

A January 2017 countywide tally of homeless residents by the San Diego Regional Task Force on Homelessness, showed the region’s homeless population is rising, up 5% from last year’s count of 8,692 to 9,116 individuals. Of that number, 62%, or 5,619 individuals, live within the City of San Diego, and 3,231 are living on city streets. This number represents a 10.3% increase in the city’s homeless population from last year’s count.

Sauder said affordable housing interests are working on legislation through state Sen. Toni Akins, D-39th, and Assemblyman Todd Gloria, D-78th, and are working with the Veterans Administration to secure funding to house homeless veterans.

He said there has been a push for re-establishing redevelopment agencies.

“People are also talking about Redevelopment 2.0, but nothing will get traction until we get a new governor,” Sauder said.