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Regional Housing and Economic Impact Analysis Update (2018)

London Moeder Advisors has completed this comprehensive analysis which addresses housing issues in the San Diego region and its integrated impact on the overall regional economy in the coming years. This study is an update to our previous study entitled Regional Housing and Economic Impact Analysis (July 2016).

The purpose of this report is to update the statistical information over the past two years, as well as to check the status of housing development and employment growth throughout San Diego County. Thus, it serves as a regional “report card” on how our housing market has performed.

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Region’s Housing Crisis Becomes Economic Crisis (2016)

“Regional Housing & Economic Impact Analysis” addressed the disconnect between housing preferences as well as the maldistribution of jobs and housing, particularly in the North County. This study also includes a report by BW Research, which addresses the economic and fiscal implications for the region and local business.

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Facts & Implications of Not Meeting Regional Housing Demand

“Facts & Implications of Not Meeting Regional Housing Demand” concluded that there is an insufficiency in the construction of new housing units, which will continue to fester in the form of higher housing costs and limited product types (mostly multifamily).

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EconoMeter | 2024

Almost every week the San Diego Union-Tribune Business section asks its panel of business leaders and economists to weigh in on an economic issue of concern to San Diegans. Gary London has been a member of this esteemed panel since 2011.

November 7, 2024 – San Diego may create a special multimillion-dollar fund to attract high-profile sporting events it hopes would elevate the city’s global image and potentially pay for itself by boosting tourism.
SDUT’s Question:
Should San Diego spend millions to lure big sports events?
Gary London’s Answer: 
No. I can only offer a visceral response because I do not fully appreciate how much promotion the…Read the Article Here

October 31, 2024 – Former President Donald Trump has raised the possibility of doing away with income taxes. Trump said the nation could return to the economic policies of the late 19th century, The New York Times reported, when there was no federal income tax.
SDUT’s Question:
Would getting rid of, or significantly reducing, federal income taxes work?
Gary London’s Answer: 
No. Now don’t get me wrong. I would welcome income tax reform rather than the manipulated, confusing and…Read the Article Here

October 24, 2024 – San Diego is launching a new effort to encourage construction of townhouses and row homes that blend better into existing neighborhoods than high-rise housing.
SDUT’s Question:
Is San Diego on the right track with its townhouse plan?
Gary London’s Answer:
Yes. But it’s far too premature to comment on the specifics, as this proposed study is still in the…Read the Article Here

October 17, 2024 – San Diego County’s inflation rate fell to 2.5% in September, its lowest in more than three years. The region’s inflation rate was 1.7% to start 2021 before the big runup in prices.
SDUT’s Question:
Will San Diego County’s inflation rate drop below 2% in the next 12 months?
Gary London’s Answer:
No. If inflation does drop further, I am not so sure that is a good thing. An economy that approaches deflation is a…Read the Article Here

October 10, 2024 – Energy company Constellation announced last month it aims to restart the nuclear plant at Three Mile Island amid growing energy demand. Three Mile Island, home of the infamous 1979 partial meltdown, is not the only nuclear site with a possible second life.
SDUT’s Question:
Was California too quick to abandon nuclear power?
Gary London’s Answer: 
Yes. The nuclear business is in a quiet but steady renaissance owed to the need for clean and reliable alternative energy sources. In addition to…Read the Article Here

October 4, 2024 – Downtown San Diego’s business community is putting pressure on the City Council to clear homeless encampments and one plan involves giving the mayor more power to handle the problem.
SDUT’s Question:
Should the San Diego City Council give Mayor Gloria emergency powers?
Gary London’s Answer:
Yes. I am instinctively in the camp that supports efforts to implement programs more efficiently to…Read the Article Here

September 25, 2024 – The Federal Reserve voted to cut rates by a half point recently, its first reduction in four years, instead of a more traditional cut of a quarter point, or 25 basis points.
SDUT’s Question:
Did the Federal Reserve go too far with its half-point reduction?
Gary London’s Answer:
No. It’s time to declare victory over inflation. Inflation levels have been dropping this year, and prices are also starting to drop in…Read the Article Here

September 19, 2024 – The San Diego County Board of Supervisors passed a measure recently aimed at bolstering safety regulations for future battery energy storage facilities in the county.
SDUT’s Question: 
Should San Diego County act quicker on battery storage concerns?
Gary London’s Answer:
Yes. Battery storage is the ideal land use for obscure parts of the county without serious traffic or…Read the Article Here

September 12, 2024 – U.S. presidential candidates Donald Trump and Kamala Harris have both suggested removing taxes on tips as part of their economic plans.
SDUT’s Question:
Should we remove taxes on service and hospitality tips?
Gary London’s Answer:
No. The upward ascendance of tipping shifts the responsibility of compensation from employers to…Read the Article Here

September 5, 2024 – The dream of a rail system, or a people mover, connecting to San Diego International Airport seems further away than ever.
SDUT’s Question:
Will San Diego’s airport ever get a light rail connection?
Gary London’s Answer: 
Yes. This appears to be a good example of “planning paralysis,” where policy makers just can’t get their act together to…Read the Article Here

August 29, 2024 – Berkeley is likely to pass a new law in October that would get rid of its previous zoning law, passed in 1916, and allow up to three story apartment buildings on single-family lots in most of the city.
SDUT’s Question:
Would communities in San Diego County benefit from a Berkeley-style zoning change?
Gary London’s Answer:
Yes. San Diego is a bustling, urban city unlike the sleepy coastal town of 100 years ago, which, incidentally, was when…Read the Article Here

August 21, 2024 – Vice President Kamala Harris, as part of her presidential run, pledged recently to spur construction of 3 million new housing units in her first four years.
SDUT’s Question:
Could a Harris administration spur construction of 3 million new housing units?
Gary London’s Answer:
No. Federal funding and tax relief help, but the shortage of housing is a local and state issue. San Diego can build more housing by…Read the Article Here

August 14, 2024 – Global stocks took a hit recently amid fears that the U.S. economy was faltering. A weaker than expected jobs report, with a rising unemployment rate, was enough for some investors to come to their own conclusions about a coming recession – even if many economists didn’t share the same concerns.
SDUT’s Question:
If there’s a U.S. economic slowdown, will it be a hard or soft landing?
Gary London’s Answer:
Soft. The weakening of the key indicators is economic music to my ears. It is the outcome the Feds…Read the Article Here

August 13, 2024 – A food-focused shift for 7-Eleven is coming to the U.S., mimicking its success in Japan, and items are already showing up in Southern California.
SDUT’s Question:
Can 7-Eleven change its U.S. image and become more like the stores in Japan?
Gary London’s Answer: 
No. I didn’t even realize that the sushifying of American convenience stores was a thing. A few years back,…Read the Article Here

July 31, 2024 – City leaders have yet to come to terms on a 30-year lease agreement to convert the empty warehouse at Kettner Boulevard and Vine Street into a large homeless shelter, as proposed by Mayor Todd Gloria.
SDUT’s Question:
Should San Diego lease the Kettner and Vine warehouse for a homeless shelter?
Gary London’s Answer:
No. This is a purely real estate analysis response. I am not weighing in on whether this is the…Read the Article Here

July 25, 2024 – San Diego has proposed new rules recently to crack down on pedicabs, which some officials say can be a nuisance. A City Council committee proposed new rules that would completely ban amplified music on all pedicabs and require written pre-trip fare agreements before all passenger trips.
SDUT’s Question:
Should San Diego crack down on pedicabs?
Gary London’s Answer: 
Yes. Sunshine is always the best policy regarding pricing. The city should make and enforce some…Read the Article Here

July 18, 2024 – San Diego Comic-Con organizers revealed recently that they will stay through 2026 but say rising hotel prices and too few affordable rooms could stymie plans to remain here for years to come.
SDUT’s Question:
Is it fair for Comic-Con to demand that downtown hotels offer large blocks of discounted rooms in return for staying in San Diego?
Gary London’s Answer: 
Yes. Sounds like a negotiating tactic to me that will likely resolve closer to 2025. “Enticing” people to come to San Diego is not…Read the Article Here

July 12, 2024 – The owner of the 24-story office tower at 600 B St. is on the brink of losing the building as the lender seeks to recoup more than $83 million in unpaid debt. It is likely the property will be sold at auction later this year or returned to its lender, Western Alliance Bank, property records show.
SDUT’s Question:
Is 600 B St. the first of many downtown office buildings to default?
Gary London’s Answer:
Yes. The downtown office market is experiencing historically high vacancy rates, now exasperated by…Read the Article Here

July 3, 2024 – National home prices have risen nearly 50 percent since the end of 2019 and several analyses say homes are substantially overvalued.
SDUT’s Question:
Does overvaluation of homes make homeownership a risky move?
Gary London’s Answer:
No. Markets are cyclical. History has shown that every successive market peak …Read the Article Here

June 27, 2024 – Leaders of San Diego County’s public transit system balked at a proposal recently that would have potentially reduced its estimated $80 million annual budget deficit. The board of the Metropolitan Transit System rejected a proposal that would have cracked down on fare jumpers on the San Diego Trolley — something the agency says is costing them about $1 million a month.
SDUT’s Question:
Is operation of the San Diego Trolley sustainable without a crackdown on fare evasion?
Gary London’s Answer:
 Yes. I think the bigger issue is how operation of the trolley is sustainable…Read the Article Here

June 20, 2024 – Things aren’t looking great for downtown’s 1.7 million-square-foot Research and Development District from San Diego-based life science real estate developer IQHQ.
SDUT’s Question:
Should IQHQ switch to general office space, not life sciences?
Gary London’s Answer:
Yes. Two key takeaways: 1) This is not for us to decide. The owners…Read the Article Here

June 7, 2024 – Last month, San Francisco-based startup OpenAI released its newest artificial intelligence model, GPT-4o (the “o” is for omni), which seems to be a leap forward in how the technology can be applied to real-world tasks, including many that human workers are currently paid to do.
SDUT’s Question:
Are San Diego jobs at risk from AI?
Gary London’s Answer: Yes.
Some jobs are certain to be eliminated. But history suggests…Read the Article Here

May 31, 2024 – The San Diego City Council voted last week to replace its existing neighborhood group in the Uptown area with a new group that describes itself as younger, more renter-focused and less resistant to development.
SDUT’s Question:
Is the new neighborhood group a positive for the Uptown area?
Gary London’s Answer: Yes.
The revitalization of planning groups is necessary given the changing…Read the Article Here

May 23, 2024 – The San Diego City Council recently voted to raise developer fees to cover additional city workers, new technology and other efforts.
SDUT’s Question:
Did the San Diego City Council make the right move increasing developer fees?
Gary London’s Answer: No.
Permit costs and delays are serious impediments to the efficiency and costs of …Read the Article Here

May 17, 2024 – The Biden administration quadrupled tariffs on Chinese electric vehicles this week in order to protect American automakers.
SDUT’s Question: Is raising the tariff on Chinese EVs a good move?
Gary London’s Answer: No. And for a host of reasons, including 1) competition usually leads to …Read the Article Here

May 10, 2024 – Labor unions are pushing for the city of San Diego to mandate a $25 hourly minimum wage for service workers
SDUT’s Question: Should the San Diego City Council take up the $25 service worker minimum wage?
Gary London’s Answer: No. But not because I am philosophically opposed to higher wages. It’s mandated government intervention that is…Read the Article Here

May 3, 2024 – Mortgage rates hit their highest point this year, 7.52 percent, last week. The Econometer panel considers its impact.
SDUT’s Question: Is a 7.52 percent interest rate enough to slow San Diego home price growth?
Gary London’s Answer: No. Home prices continue to rise principally because of a supply deficiency. High interest rates do matter because…Read the Article Here

April 26, 2024 – California’s Supreme Court has agreed to weigh in on controversial new rules that slash the financial incentive for people who install rooftop solar on their homes.
SDUT’s Question: Should California’s Supreme Court overturn new rooftop solar rules?
Gary London’s Answer: Yes: This approach to energy efficiency is wrong. Solar paneling costs have come down but…Read the Article Here

April 19, 2024 – Officials with the U.S. central bank have telegraphed plans to cut interest rates this year, but stubborn inflation is shifting expectations
SDUT’s Question: Will the Federal Reserve still cut rates this year?
Gary London’s Answer: Yes. But likely later in the year. The current inflation rate, while dramatically lower than last year, seems…Read the Article Here

April 12, 2024 – Earlier this month, California fast-food workers started earning a $20 an hour minimum wage.
SDUT’s Question: Is the negative effect of the $20 fast-food minimum wage overblown?
Gary London’s Answer: Yes. The wage increase will undoubtedly raise fast-food costs. Consumers are more likely to…Read the Article Here

April 4, 2024 – Sea World San Diego hit a peak attendance of nearly 4.6 million in 2012 and 2013, but it’s never come close to reaching that level again
SDUT’s Question:  Will SeaWorld ever get back to its peak attendance of more than a decade ago?
Gary London’s Answer: No. The killer whale problem is a residual negative for them. Many families haven’t…Read the Article Here

March 29, 2024 – Nearly 31,000 more people left San Diego County than moved here between July of 2022 and July of 2023
SDUT’s Question: Will San Diego County see similarly high volumes of people moving out next year?
Gary London’s Answer: Yes. This is now a trend owed to the cost and scarcity of housing suitable for young families of…Read the Article Here

March 22, 2024 – San Diego approved a plan last week to spend up to $4.5 million for a study to see how much single-family homes should be charged for trash and recycling services.
SDUT’s Question: Is $4.5 million for a San Diego trash study too high?
Gary London’s Answer: Yes. Before spending the money, maybe policymakers should be asked if…Read the Article Here

March 15, 2024 -President Biden introduced several plans at the State of the Union targeting big businesses and the wealthiest Americans
SDUT’s Question: Is President Biden on the right track with his tax increase proposals?
Gary London’s Answer: Yes. SOTU proposals are always an aspirational candy store and are tempered over time and…Read the Article Here

March 7, 2024 -The Port of San Diego unanimously approved a new master plan last week that will increase the density in the land it controls
SDUT’s Question: Is the Port of San Diego on the right track with its new master plan?
Gary London’s Answer: Yes. This is a long-awaited master plan, which triumphs in its articulation of a variety of…Read the Article Here

March 1, 2024 -China will be sending two pandas to the San Diego Zoo, possibly as soon as this summer, five years after Beijing took the beloved creatures out of San Diego.
SDUT’s Question: Will pandas returning to San Diego Zoo have a notable impact on the tourism industry?
Gary London’s Answer: Yes. I remember standing in line for a glimpse of the pandas. It was one of San Diego’s most…Read the Article Here

February 23, 2024 -An audit said San Diego roads get a “fair” rating with a score of 63. That compares San Francisco at 74, Phoenix at 70 and Los Angeles at 67
SDUT’s Question: Does San Diego need to increase its road repair funding?
Gary London’s Answer: Yes. The roads are a mess. The only question is, how to fund the repairs? Assuming existing…Read the Article Here

February 16, 2024 -Disney, Fox and Warner Bros. Discovery are proposing a new sports streaming service to capture fans who are abandoning cable TV packages.
SDUT’s Question:  Will a Disney and Co. sports streaming service be a step in the right direction for consumers?
Gary London’s Answer: Yes. Hopefully consumers will be the beneficiaries from the cable vs. streaming wars. It’s not just…Read the Article Here

February 9, 2024 -Proponents say a tax is necessary to pay for updating the city’s outdated 20th century stormwater system
SDUT’s Question: Does San Diego need a water quality tax to help with flood prevention?
Gary London’s Answer: Yes. As a concerned citizen I obviously want our infrastructure to be state of the art, and people…Read the Article Here

February 2, 2024 -Super Bowl advertisement space had sold out in November and it cost as much as $7 million for a 30-second ad during the game
SDUT’s Question: Are Super Bowl advertisements worth the money?
Gary London’s Answer: Yes. The answer is self-evident because advertisers pay the biggest rates of the programming year. There are…Read the Article Here

January 26, 2024 -City officials said historic preservation complaints often stop potentially beneficial projects for San Diego
SDUT’s Question: Should San Diego change historic preservation rules?
Gary London’s Answer: Yes. Current historic rules run counter to how our city’s neighborhoods can thrive and reinvent. There are…Read the Article Here

January 19, 2024 -Newsom’s budget plan would pull more than $13 billion from the reserves and include an additional $8.5 billion in spending cuts.
SDUT’s Question: Is Gov. Newsom on the right track with his budget plan?
Gary London’s Answer: Gary did not participate this week. Read the Article Here

January 12, 2024 -The new owner of 180 Broadway in downtown San Diego will convert the office building into a residential and hotel property. Will others follow?
SDUT’s Question: Will San Diego see more office buildings converted to residential?
Gary London’s Answer: Yes. We have entered a new era of permanently increased vacancies in commercial assets. Resulting lower valuations will…Read the Article Here

January 5, 2024 – San Diego in ’24: Experts predict higher home prices and more
SDUT’s Question: What economic indicator will you monitor most closely in 2024?
Gary London’s Answer: Vibes: There are two fundamental economic persuasions. The first is the data-driven types like inflation,…Read the Article Here

 

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