San Diego Establishes $8.5 Million Fund for Affordable Housing Preservation

San Diego is taking steps to safeguard its existing affordable housing stock with the establishment of a new $8.5 million preservation fund. The San Diego City Council recently approved the initiative, which is designed to prevent “naturally occurring affordable housing” (NOAH) and deed-restricted units from transitioning to market-rate properties.

The fund will provide financial backing for proposals seeking to maintain the affordability of these crucial housing units long-term. Groups interested in accessing these funds can submit their proposals to the city council or the Housing Authority for consideration.

Preserving Affordable Housing Stock

A 2020 study by the San Diego Housing Commission highlighted the pressing need for such a fund. The study estimated that over 13,000 existing housing units in the city could lose their affordability status by 2040. Of these, approximately 4,200 are deed-restricted units that may see their affordability restrictions expire, and 9,250 are NOAH units vulnerable to market forces.

The new fund aims to directly address this projected loss by enabling interventions that keep these units accessible to lower and middle-income residents. Potential uses for the fund include combining it with other financial sources to acquire and preserve affordable housing properties, or to support rehabilitation efforts that maintain affordability requirements.

The initiative reflects a growing recognition among cities of the challenge posed by the dwindling supply of affordable housing. As housing costs rise, naturally occurring affordable housing—units that are affordable due to market conditions rather than government regulation—becomes increasingly important for maintaining diverse and inclusive communities. However, these units are often the first to be redeveloped or renovated into higher-cost housing.

Key Facts

Impact on Housing Affordability

The establishment of this fund is a proactive measure by San Diego to mitigate the impacts of rising housing costs. By targeting existing units, the city aims to preserve housing options for a range of income levels, potentially stabilizing neighborhoods and reducing displacement. This approach complements efforts to build new affordable housing by ensuring that the current stock remains available.

The success of the fund will likely depend on the volume and quality of proposals received, as well as the city’s ability to leverage these funds effectively with other investment sources. The Housing Commission’s study provides a clear indication of the scale of the challenge, suggesting that this $8.5 million commitment is a significant, but likely initial, step in a larger ongoing effort to ensure housing affordability in San Diego.

Source: Planetizen News (https://www.planetizen.com/news/2026/07/137913-san-diego-establishes-85m-affordable-housing-fund)