Shortage of Land in San Diego

[Doofrat]

Does anybody have any type of info about how much land there is to build on? It seems like a long shot, but maybe some agency estimates this?

Also, everybody talks about how San Diego has all these high tech jobs, but how many are there really? It makes no sense that an average house is priced as if all three million people in San Diego have a high tech high five figure jobs.

I do alot of mountain biking around San Diego, and from that perspective, it looks like there is plenty of land to build on. I understand that alot of land is under some type of restriction, but I see these large areas all over San Diego that one could place quite a few units on. In Carmel Valley, you see where they’ve built these huge developments over a previous field, and they have tons more to grade and scrape.

Also, isn’t the amount of land really inconsequential? What I mean is that if you can only build x number of housing units due to space limitations, then business will only locate y number of businesses in that region.

[sdrealtor]

I have a friend that owns one of the most respected engineering firms that does land planning/subdivisions for the major developers. I asked him whether the shortage of land was real or not. He said that with all the unusable land due to habitat, zoning regulations, dedicated open space and topography that there is very little land left for large subdivisions. Most of what will and can be built is already entitled and within a decade or so we will be left with nothing more than small to medium sized infill neighborhoods.

I respect him and no reason to doubt his comments. Based upon them, I believe there is a real shortage of buildable land.

[powayseller]

Interesting stuff, sdr. I think all this open space is Preserve. With all the butterfly laws in CA, it would be hard to build anything, anywhere.

As far as the jobs data, I am on the auto-email list from the San Diego Department of Labor, courtesy of Cheryl Mason. She’s an amazing person. She told me that there is no new job growth in SD, and mostly it’s been in real estate stuff and retail. No promise of new jobs coming down the pike. When I spoke to her in May, there was still hope of Homeland Security funding, but that didn’t materialize. She said there could be some jobs related to new port construction, or maybe biotech would take off again. So don’t believe all those government projections, they are BS.

Anyway, the Excel file has all the jobs data by industry back to 1992. I can look up any industry that far back. That is the payroll survey, i.e. they get the data by asking large employers about the payroll. So they miss start-ups and private contractors, which is where the realtors and many loan officers and contractors are found. This data is hard to interpret, because it is grouped by industry. If you are a janitor for a law firm, your job is under “Legal”. Back to the point: high tech industry.
Professional and Business Services has 211,000 employees. In this group, is Scientific Research and Development (includes biotech?) of 25,100; Telecom has 15,400 but this category includes carriers, resellers, and Other, so I’m not sure if the engineers are here or in PBS.
Real Estate and Leasing has 30,700.
Retail has 145,500

This is most recent press release that Cheryl Mason e-mailed me.

State of California June 16, 2006
EMPLOYMENT DEVELOPMENT DEPARTMENT
Labor Market Information Division Contact: Cheryl Mason
8977 Activity Rd., Suite A (858) 689-6544
San Diego, CA 92126

SAN DIEGO-CARLSBAD-SAN MARCOS METROPOLITAN STATISTICAL AREA
(SAN DIEGO COUNTY)
San Diego adds 5,300 jobs over the month; 17,500 jobs over the year

The unemployment rate in San Diego County remained stable at 3.7 percent in April and May 2006, and below the year-ago estimate of 4.1 percent. This compares with an unadjusted unemployment rate of 4.6 percent for California and 4.4 percent for the nation during the same period.
Between April 2006 and May 2006, nonfarm wage and salary employment in San Diego County rose by 5,300 jobs to reach 1,302,500 jobs.
• Construction recorded the largest increase (up 1,800 jobs), with growth occurring mostly in specialty trade contractor services where many electricians, carpenters and other trades are classified.
• Leisure and hospitality added 1,300 as employers continued to ramp up staffing for the summer tourist season. Accommodation and food services expanded by 800 jobs and arts, entertainment and recreation expanded by 500 jobs.
• Trade, transportation and utilities grew by 1,000 jobs, with 60 percent of the gain in retail trade.
Between May 2005 and May 2006, total nonfarm employment was up by 17,500 jobs, an increase of 1.4 percent.
• Leisure and hospitality recorded the largest increase (up 5,100 jobs). The job gains were concentrated in accommodation and food services.
• Construction grew by 4,300 jobs, with most of the increase occurring in the specialty trade contractors sector.
• Educational and health services added 2,800 jobs since May of last year. Approximately 85 percent of the job growth occurred in health services, primarily in offices of doctors and other health practitioners.

[PD]

SDR’s source said that the space for large subdivisions would be used up in a decade or so. A decade or so is not right now. People are claiming there is a current shortage, which would explain the rise in prices as a function of scarcity. In my opinion, the rise in prices was initially a natural part of the cycle that then went wild with super low interest rates. Maybe the NEXT cycle will have prices go wild because of scarcity.

Further, when buildable land truly becomes very scarce, we will probably see it become easier to build on land that is currently being protected. There will be political pressure for more housing.

[barnaby33]

Or more realistically, more density of building. When you can’t build out, you build up.

Josh

[lindismith]

What I mean is that if you can only build x number of housing units due to space limitations, then business will only locate y number of businesses in that region.

Great questions!

I’d like to know if this is actually a true statement? I’m interested to know how a city or county decides to add businesses areas? Do we have any Urban Planners on here?

My own thinking is that if the cities were actually properly planning around growth, they would have allocated more business areas in North County because of the impact on traffic congestion. But, that hasn’t been the case…. Can someone enlighten me?

[powayseller]

I only know about Poway: their general plan is to keep all their open space, all 13,000 acres (?). Poway has the most open space of any city in the County, and has turned away all developers, while Chula Vista embraced them. Poway gets lots of revenue from the auto dealerships on Poway Rd, and the Poway Industrial Park on Scripps Poway Parkway. All that can happen in Poway is infill projects, on various vacant lots.

I asked the City Assistant Manager, “Well, where will all the people live? Population is increasing”.

He answered, “Not in Poway. We don’t want to get any bigger”.

So, it becomes someone else’s problem… That doesn’t seem right to me. If our population keeps increasing, where will they live?

The County also has a general plan. Where I lived before off Highway 67, the area was zoned agricultural from Ramona to Lakeside. Minimum 4 acre lots. That entire area could be used for housing, but is not zoned for it, and the County has refused to change the general plan. The area is full of Preserves.

If you want to know more, talk to the planners at the County, and ask them where they think the increasing population will live. What does SANDAG think? This has puzzled me for some time. Will Chula Vista keep growing? Or Temecula? Will we keep building more highways so people can keep driving? This won’t work when we have $100 or $200 oil.

[lindismith]

Agreed.

It’s not only where will they live, but to address the initial question: where will they work???

How they will get to work, is hopefully via a comprehensive, environmentally-friendly mass transit system. I’d love to see a streamlined bullet train running down the center of I-5! There has been some talk of that, but don’t know what the latest is. Most likely it is just wider lanes on existing freeways though….

I tried to research the quantity of tech firms in SD last night, but could find no succinct data last night. I sent some emails out to friends, but so far no one has responded.

[Carlsbadliving]

As a land planning consultant in San Diego County, I feel compelled to chime in. Yes, it’s true we are running out of buildable land. Many cities within SD County will reach “buildout” within the next 10 to 20 years.

However, in my opinion, this is not a reason for the current run up in prices. It’s an argument made by many in the real estate profession but it’s not yet affecting prices.

There are many current reasons why it’s difficult to build in San Diego County (most of them biological) and that definitley does effect current prices. This is one of the reasons that San Diego real estate will always be more expensive than other parts of the country.

Another reason is that most people feel compelled to oppose any new development (after their house has been built of course). This just makes it harder and more costly to build.

And as PD mentioned political pressure will only increase as we approach buildout. The State is already putting pressure on individual cities to increase densities. They threaten to not approve the Housing Elements of city’s General Plans if enough isn’t done to increase the density of projects. So this may become an issue as we approach buildout but if it does, there will still have to be some sort of balance between wages and housing prices.

My own thinking is that if the cities were actually properly planning around growth, they would have allocated more business areas in North County because of the impact on traffic congestion. But, that hasn’t been the case…. Can someone enlighten me?

A couple of things here: One is that city’s grow very slowly. Many cities around a large metropolitan area like downtown San Diego start out as bedroom communities as land near the city core is developed. Then slowly, retail and all the services follow.

Many of the cities in SD County grew relatively on their own until all cities were forced to draw up a General Plan that defined all land in the City. Also, the City and/or County are not developers. There still must be some sort of demand for a use and the property owner must have the means or willingness to meet that demand. Obviously in hind sight it would have been nice to have huge employment centers in North County, but growth doesn’t always work that way.

[lindismith]

Carlsbadliving,
Thanks for those answers.

Another question: can you tell me why we only build on the top of canyon areas now? We always seem to just bulldoze the top, and then squeeze in as many units as possible on the flattened area, instead of building up and down the sides of canyons? Is this to save money on putting in more roads? Or, what? Do you know what I’m talking about?

[sdrealtor]

I dont believe the land shortage was a major factor in the price run up either. I just wanted to point out that the land shortage is real and will impact us in the near future. In valuing a stock you look at future earnings. Similarly, looking at real estate values you have to look to the future when analyzing values. Looking at homes in an area where future buildable land is in short supply might not explain the current run up but it could certainly act as a buffer in the next several years to falling prices preventing the 50% drop some believe in and limiting it to 20% or so.

[Carlsbadliving]

It’s actually increasingly difficult to build in any areas of a canyon now. Some cities have ridgeline ordinances that protect the top of canyons and hills from being built. Canyons would typically also have way too many biological impacts and hillside ordinances, making them virtually unbuildable. Most of the remaining areas to build in a city like Carslbad are disturbed or been used for agriculture. These carry less impacts and make it more feasible to build.

We’re actually lucky (or unlucky for some people I guess) that a good portion of the County was built long before the strict land planning policies of today. Many of those beautiful canyon subdivisions and hilltop/bluff homes are no longer feasible.

[sdrealtor]

Carlsbadliving,
You are a definite asset to this board, please stick around. Its reat to have someone knowledgable about land use on board.

People drive down the freeways and look at that beautiful undisturbed ridges/canyons and dream about the views from the home they would love to build there without understanding that city/county government rules make that impossible.

[PD]

There is plenty of land available in places like Ramona. If the 67 was turned into a freeway, there would be a huge boom out there. The city is very opposed to development but things change. My house in Ramona had a view of miles and miles of undisturbed land.
People in LA live in Riverside and commute 2 hours each way. When land is scarce, they will just build further out. Although we are bordered by Mexico and the ocean, we can still expand eastward.

[anxvariety]

My friend has 2.5 acres he’s selling in Bonsall.. his property backs up to a HUGE lot.. I asked him who owned the lot and his repsonse was.. some kid(30) named Kash Vessels? and he’s supposedly the largest VACANT LAND owner in San Diego county.. I guess his dad, Frank “Scoop” Vessels, owned some LA racetrack, sold it, and bought most of the land in Bonsall making him the largest land holder in San Diego county(I haven’t confirmed this, and I’m not sure my friend has either).

Anyone know anything about this? How much land do they own?

[Author]

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