San Diego focuses on housing construction despite budget deficit

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California Construction News staff writer

Despite a looming $258 million budget deficit, San Diego is doubling down on efforts to tackle its housing crisis, with plans to significantly increase home construction in the coming years. In his 2025 State of the City Address, Mayor Todd Gloria outlined how the city intends to navigate financial challenges while continuing to prioritize housing, homelessness, and infrastructure needs.

Over the past year, San Diego has seen a remarkable rise in housing permits, with nearly 10,000 new homes permitted in 2023, nearly doubling the average number of permits issued annually over the last two decades. The city’s strategic policy changes, such as streamlining the permitting process, have been key in facilitating this surge, ensuring quicker approval for developers.

“We’ve made it a priority to cut through red tape and accelerate the construction of homes our residents need,” said Mayor Gloria. “Through executive orders and our Housing Action Packages, we’ve shown that we can meet the challenges of a tough economic climate while delivering more housing to San Diegans.”

Building on these gains, the city is now looking to incentivize the construction of affordable housing for first-time homebuyers. In 2025, the city will launch a new program focused on developing starter homes—row homes, townhomes, and condos—providing more opportunities for homeownership at a time when high interest rates and inflation have made housing affordability more challenging.

“The construction of starter homes is a critical part of our strategy to address the housing affordability crisis,” Mayor Gloria said. “By supporting this segment of the market, we aim to give San Diegans more affordable pathways to homeownership and help revitalize neighborhoods across the city.”

The announcement is a welcomed step for the construction industry, which has faced hurdles in recent years. Despite national challenges, including inflation and rising interest rates, San Diego’s proactive housing policies are positioning the city as a leader in developing solutions to meet the housing needs of its growing population.

Juan Garcia, president of the San Diego Builders Association, noted, “The mayor’s leadership in speeding up the permitting process has been a game-changer for builders. We’re seeing more opportunities to deliver the homes that San Diego desperately needs, and his commitment to incentivizing starter homes will provide much-needed options for homebuyers in the region.”

While financial constraints remain a key issue, the city is confident in its ability to continue making progress in areas like housing, infrastructure, and homelessness reduction. By focusing on these critical needs, San Diego aims to ensure its growth is sustainable and inclusive.

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