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Housing On Merit's Jennifer Litwak: 'We're Trying To Fill A Need That Is Going Completely Unaddressed'

With a housing crisis in full swing, some of San Diego’s developers have made it clear that home renters and buyers in the county are not the only ones thinking about how to access more affordable housing.

San Diego State of the Market
Allen Matkins' Timothy Hutter, Malick Infill's Andrew Malick, Housing on Merit's Jennifer Litwak, Sudberry Properties' Marco Sessa, Baldwin & Sons' Shawn Baldwin and Sunroad Asset Management's Dan Feldman

One local developer, in particular, has big ideas for the future. Jennifer Litwak is the executive director of Housing on Merit, a nonprofit that co-develops and manages affordable housing projects. The organization has  a socially and fiscally minded approach and is focused on developing innovative housing solutions that may come across as radical at first glance.

Litwak recently expanded on some of the ideas discussed during Bisnow’s Word on the Beach: San Diego’s State of the Market event concerning affordability and potential solutions for the city and county.

She challenged assumptions that there is a decent amount of affordable housing options in San Diego County or that enough are currently being built. One of the largest impediments to creating affordable housing lies in permitting, which Litwak said costs 40% of any development project.

Housing Affordability San Diego
Four levers can narrow the affordability gap

“The median income in San Diego is $53K. That would mean that an affordable home price is $225K, assuming you follow the standard breakdown of 30% of someone’s income goes towards housing. $593K is the median home price in San Diego County, so how is that affordable?” Litwak said.

“So, let’s say you make the median income and your house costs $600K, that means $240K of that, or 40%, is just permitting fees. Off the bat, your permitting fees already amount to more than what you can spend on your house."

For Housing on Merit, the goal is reaching natural affordability without housing credits, tax credits or bonds. The organization’s strategy lies in a multifaceted approach that includes reducing permitting fees and focusing on, “what goes on top of the dirt, since the price of the dirt will always be at a premium,” Litwak said, referring to the likelihood that land prices in California will continue to be high.

This means investigating and testing innovative housing, including container, 3D-printed, modular, portable and micro-homes, many with eco-friendly components that encourage recycling to cut down on environmental impact while cutting costs.

San Diego Affordable Housing
Housing on Merit's example of possible affordable housing

“We want to showcase the different housing typologies and make them accessible to the public to look, touch and feel. For low-income communities, in particular, it’s important for the end user to agree that they could see themselves living there. For some, container housing, for example, is radical. Same with the micro-housing conversation. There are lots of people opining on whether or not it’s liveable and, to me, I don’t think those opinions matter. The end user is all that counts. So, we want to say, ‘Come, look — it’s 250, 350 SF. Can you live here?’”

To answer that, Housing on Merit co-sponsored the Alternative Housing Solutions event in October. The multiday gathering explored how accessory dwelling units, modular construction and tiny homes can help address San Diego’s homelessness and housing affordability crisis. The event featured tiny home exhibits, which attendees could tour.

Litwak said it was an engaging and successful experience, one that brought developers and elected officials to the table to start the conversation about what can be done to alleviate San Diego’s housing woes. She said San Diego Councilman Scott Sherman was particularly receptive.

Housing on Merit is eyeing purchasing land in the East Village to continue developing housing prototypes.

“We want to go to a place where the issue of individuals lacking a home is important and prevalent. The East Village is the hotbed of people without a house. We think building a project there will really start to address a multifaceted issue — the city and county can put money into addressing social issues, that’s great, but in our opinion, the end result needs to be housing and actual homes,” Litwak said.

Litwak said addressing affordable housing issues in the same neighborhood where new luxury high-rises are consistently being built makes sense.

“We’re not in competition with the luxury guys,” Litwak said. “There’s more than enough supply and demand in San Diego to meet everyone’s needs. Plus, if we can help to solve the social issues in the neighborhood, their prices go up. It’s a value-add for everyone.”

In various conversations Housing on Merit has had with San Diego-area developers, including luxury builders, Litwak said everyone she spoke with said they were on board. But she reserves special criticism for local government, which she categorizes as opaque and thinks is bolstering a narrative that brands San Diego as elitist and suitable only for upscale buyers.

Jennifer Litwak
Housing on Merit Executive Director Jennifer Litwak

“Historically, they don’t like change, they’re resistant. So it’s not necessary to have substantial conversations with them at this point. First, we need the land purchase, then we need to develop a housing typology and continue having conversations with those in the industry. Then we can think about discussing with government,” she said.

Overall, Litwak said arguments for affordable housing can win out from a fiscal and economic perspective.

“What I think about the type of projects we’re developing is that they are very attractive from a fiscal standpoint. I hope the city recognizes that, gets behind it and champions it, because it makes whatever dollar they put into the issue go further,” Litwak said. “The city only has so much money, it’s a finite resource. If they’re choosing what they have to do year over year — say, to put 60% into a rental home and 20% into vouchers — well, a shipping container multifamily project makes funding go so much further.”

Next on the docket for Litwak and Housing on Merit is making the Affordable Housing Solutions event a permanent exhibit that changes over time according to different housing needs and innovations.

“We’re not saying anything else needs to change concerning current development in San Diego,” Litwak said. “Affordable housing people, keep doing what you’re doing. Luxury guys, keep doing what you’re doing. There’s a growing widening gap at the bottom and that’s where we’re trying to step in. We’re trying to fill — infill — a need that is going completely unaddressed."