Mayor Todd Gloria warns of $258 million budget gap, pledges housing, homelessness action

Mayor Todd Gloria told the San Diego City Council and the public on Jan. 15 that the city faces a significant fiscal shortfall after voters rejected Measure E and outlined steps to close the gap while sustaining progress on housing and homelessness.

"Its defeat means that we as a city face a $258,000,000 budget deficit this upcoming fiscal year, about 12% of our current $2,100,000,000 operating budget," Gloria said, calling the gap a test that will require "responsible stewardship of every dollar and clear-eyed decisions." He said the city previously closed a $170,000,000 shortfall with "surgical cuts and one-time measures" and that this year will require structural solutions rather than temporary fixes.

Gloria said he has already taken immediate steps to curb spending, including freezing hiring "for all but the most essential positions," stopping nonessential spending and ordering a wholesale review of city office leases to pursue cost savings. He directed department directors to "craft their budgets for next year not by simply tweaking last year's budget but totally rethinking their operations" so the city can preserve service levels with fewer resources.

The mayor framed the fiscal plan alongside his administration's housing and homelessness record. He said reforms and executive orders to speed permitting are producing results: "We've sped up permitting on 33 projects with more than 3,500 new homes, and we have another 3,500 in the pipeline right now," and that the city completed permit reviews in an average of "just 8 days" on those projects. He added that San Diego "more than doubled" annual permitting in 2023 to nearly 10,000 new homes and that preliminary numbers for the most recent year show about 8,500 new-home permits.

On affordable housing, Gloria said the city invested $90,000,000 in former redevelopment funds to help affordable projects and credited that effort with nearly 2,000 new affordable apartments across the city. He also cited the Homekey program conversion of an extended-stay hotel into 160 homes and said the city's Homekey portfolio now includes six projects with more than 600 homes.

Gloria reiterated that addressing homelessness requires regional cooperation. "The City of San Diego cannot continue to shoulder the response to this region's homelessness crisis alone," he said, urging the County of San Diego to deliver behavioral-health services and criticizing a county delay in implementing a state law meant to improve access to care. He said city-funded outreach and shelter programs "have served more than 25,000 people and successfully placed nearly 4,700 of them into housing." He also announced that the city will "open a new safe parking site at at h barracks as well as other new shelter facilities."

The mayor discussed operational changes and partnerships to stretch public dollars, citing a corporate partnership that provided lifeguard vehicles and saved "almost $4,000,000," and asked staff to reconsider long-standing rules (for example, seasonal restrictions on coastal paving) to save time and money.

Gloria closed by stressing both the difficulty and opportunity in the year ahead: "We are going to add conquering our structural budget deficit once and for all to our list of accomplishments," and he urged the council and regional partners to work together on the city's priorities.

The address concluded without a formal council action; the mayor's immediate directives included departmental budget rework, hiring freezes for nonessential positions, and additional operational reviews.