Good afternoon, City Council President LaCava, Members of the City Council, City Attorney Ferbert, our dedicated City employees, and my fellow San Diegans:

Before I begin, I’d like to take a moment to acknowledge and extend our condolences to our neighbors in Los Angeles and surrounding areas.

As you know, they continue to battle truly catastrophic wildfires that are devastating communities and I want to express our city’s profound gratitude to all the firefighters and emergency personnel – from around the world including our very own San Diego Fire-Rescue crews – who are putting their lives on the line to protect communities.

L.A. – we’re with you, we’re rooting for you. Please stay safe.

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My Fellow San Diegans:

It is an honor to come before you today to deliver my fifth State of the City Address as the 37th Mayor of our great city.

Over the past four years, we have worked together to tackle our city’s biggest challenges – the ones long ignored, often considered insurmountable and left unaddressed by past administrations.

Together, we made the bold decisions, confronted the tough issues, and refused to let the obstacles of the past define our future.

In doing so, we have made progress – not always perfect and rarely easy – but progress that moved San Diego forward.

In a normal year, much of this address would be spent highlighting the progress on our four major priorities for the City: keep you safe, reduce homelessness, fix the damn roads, and build more housing.

And there’s certainly plenty to talk about and to celebrate.

How crime is down -- homicides reduced by nearly 30%, sexual assaults down by 12%, robberies down 10% and car thefts by 20%.

How our firefighters, lifeguards and paramedics responded to an incredible 188,000 emergency calls last year – a new record.

How we’ve resurfaced a full quarter of our entire road network in the last four years.

How the City’s credit rating increased in June from AA to AA+ -- the second-highest rating available.

How we’ve more than doubled homeless shelter options, with recent data showing our efforts are finally turning the tide.

But, this year, I want to primarily focus on the work ahead.

Because while our persistence has yielded many achievements to celebrate, the stark financial reality we face today will be a true test of our resolve.

As you know, Measure E – our proposed sales tax measure that the voters of this city considered this past November – did not secure enough support.

Its defeat means that we as a city face a $258 million budget deficit this upcoming fiscal year -- about 12% of our current $2.1 billion operating budget.

This comes on the heels of the $170 million shortfall we faced last year, which we closed through surgical cuts and one-time measures.

While we had hoped that Measure E would give us the ability to finally align our ongoing resources with desired service levels and make big investments in our infrastructure needs…

As Mayor, I have heard -- and I accept -- the will of the voters.

And, instead, we must find another way to continue delivering on the core priorities that matter most to San Diegans.

Doing so with a quarter-billion-dollar deficit will be an immense challenge.

One that demands responsible stewardship of every dollar and clear-eyed decisions about our priorities.

One that will force tough conversations, and even tougher decisions by many of us in this room.

That is why, today, I chose to speak to you not from a stage in a grand theater, but from Council Chambers inside San Diego City Hall.

Because it is here where the policies that shape our city’s future are debated, crafted and decided.  
And it is here where these difficult conversations will occur, and solutions to this challenge  take shape.

So while, yes -- this is an immense challenge we’re facing, it is also something else: immense opportunity.

Opportunity to refocus and reimagine the public work we do and opportunity to revisit and re-evaluate how we operate and the services we provide.

I believe you want a city government that makes the most of what we have, prioritizes the basics, and delivers results.

And in that, we must acknowledge a fundamental truth: We can no longer do things a certain way simply because that’s how they’ve always been done.

The task ahead, as I believe you -- the voters -- have directed us, is to right-size our city budget – not just for this year, but for the long-term.

It means matching up our resources with our priorities and making hard choices, including reducing or eliminating some city services.

And, we have already begun this work.

I have taken immediate steps to cut spending -- freezing hiring for all but the most essential positions, stopping non-essential spending, and making other mid-year adjustments   to put us in a better position to start the next fiscal year.

I am conducting a wholesale evaluation of the City’s office space leases.

Where it’s cost-beneficial, we will terminate or renegotiate leases and consolidate space to use square-footage more efficiently and save taxpayers money.

I've also asked Department Directors to craft their budgets for next year not by simply tweaking last year’s budget, but totally rethinking their operations to  preserve the highest level of service possible within a smaller resource allocation.  

This approach is really no different from what you would do if your family was facing tough times.

We adjust, we get creative, and we make the most of what we have.

And I have   faith in our city employees to rise to the occasion.

Because time and again, they’ve demonstrated their ability to tackle complex challenges with creativity and determination.

Take housing, for example – a crisis decades in the making that has not only threatened our economy, but also the very fabric of our community.

It’s caused so many to wonder whether they have a future here.  

Families have felt pushed out.

Children growing up hundreds of miles away from their grandparents.

Employers are struggling to attract and retain the talent they need to be successful.

If we are going to be a truly great city, that all of us can live in, we have to continue to build more housing.

Period. Full stop.

From my first day in office, I’ve worked to make this city more pro-housing.

I directed our Planning Department to think boldly and cut through the red tape that slows down construction and drives up costs.

Within six months, we passed the first of two packages of major reforms to make it easier to build a wide range of housing types.

We combed through our Land Development Code to clear away unnecessary hurdles.

Our Development Services Department delivered on the audacious goal I set in two executive orders to speed up housing production, requiring all relevant city departments to review key housing projects in 30 days or less.  

And these measures are working.

To date, we’ve sped up permitting for 33 projects with more than 3,500 homes – and we have another 3,500 in the pipeline.

City staff also far exceeded my 30-day mandate for permit review, completing these approvals in an average of just eight days, when in the past it typically took over six months.

Policy reforms might sound boring, but the results are exciting!

For about two decades, San Diego was permitting, on average, about 4,300  new homes each year.

In 2023, we more than doubled that, permitting almost 10,000 homes.

Preliminary numbers for last year show another 8,500 homes were permitted, even in the face of high interest rates and inflation.

Our progress to build more housing extends beyond just policy changes and cutting red tape.

Through the City’s Economic Development Department, we’ve invested $90 million in former redevelopment funds to help affordable housing projects get across the finish line through our “Bridge to Home” program.

This has resulted in nearly 2,000 new affordable apartments across our city from Rancho Bernardo to San Ysidro.

And, through the State of California’s Homekey program, last year we partnered with the San Diego Housing Commission to convert an extended-stay hotel into 160 homes for people experiencing homelessness.

Today, our Homekey portfolio now includes six projects with over 600 homes.

With all of this, my attention this year will turn to new housing opportunities for the working and middle class…for families with children as well as those potentially looking to downsize.

In the coming months, I intend to announce a new program to incentivize the construction of new starter homes like row homes, town homes, and condos – homes that can bring first-time homeownership opportunities that create generational wealth for San Diegans.

This multi-departmental, all-hands-on-deck approach to our housing crisis I described is just one example of the dedication to improving the lives of San Diegans that I see every day in our City workforce.

The City of San Diego can do hard things – and in 2025, we're going to add conquering our structural budget deficit -- once and for all -- to our list of accomplishments.

Having taken office as a City Councilmember at the start of the Great Recession, I know about balancing budgets during tough times.

However, this time we cannot seek one-time measures that will only serve to prolong the pain for several years.

It is my expectation that we handle this structural deficit this year.

No gimmicks. No Hail Mary passes.

No cavalry is coming to save us.

We can’t wait for yet another revenue measure that might fail.

We certainly can’t count on assistance from the federal government, which under the incoming administration is far more likely to burden us than to help us.

Steep cuts will be necessary. But I also want to be clear that I’m not interested in just slashing our way to a balanced budget.

Instead, we will reimagine how we operate – examining every service we provide and how we can make the most of our public assets.  

We will need to ask fundamental questions in the weeks and months ahead:

Why are we doing it this way? And is there a better way?

For example:

Why does the City prohibit street paving in coastal areas during the summer? Could changing this save time and money…?

Why do we pay for landline phones for city workers that few still actually use?

Why do City employees who work a hybrid schedule still need their own office or cubicle?

Why does the City have both a personnel department and human resources department?

We have corporate partnerships that have delivered well for us, like our deal with Toyota to provide lifeguard vehicles saving almost $4 million.

Why not do more partnerships like this?

Again, a reminder: that we can no longer do things a certain way simply because that’s how they’ve always been done.

We’re also going to have to capitalize much more on our existing assets, do more to recover full costs to taxpayers.

City facilities, streets, parking lots and land have great value we’ve discounted or given away for free – and it’s time to reconsider all of this to ensure we can continue to deliver the most critical services.

And, we’re going to seek to shift some of the burdens that do not belong on the backs of City taxpayers – especially when it comes to homelessness.  

I’ve said it before, and it remains true: Addressing homelessness is not solely the responsibility of the City of San Diego!

The City of San Diego cannot continue to shoulder the response to the region’s homelessness crisis alone.

Over the past four years, we have done the work to set-up a homelessness response ecosystem to get people off the street, connected to care, and on a path to housing.

Our City-funded outreach, shelter and family reunification programs, have served more than 25,000 people and successfully placed nearly 4,700 into housing.

Along with all of these efforts comes the imperative to enforce our laws against unsafe and unsanitary encampments.

In San Diego, we took a stand that we will not accept encampments that block sidewalks, forcing children to walk in the street to get to school and making it harder for customers to patronize the businesses that employ our people and power our economy.

Our Unsafe Camping Ordinance is successfully reducing encampments in heavily impacted areas without widespread arrests. It’s working.

Implementing our comprehensive shelter strategy to reduce homelessness is my administration’s No. 1 priority.

And it will continue to be this year.

We will – now, hear me on this – even with our difficult financial picture, we will increase options for people to get off the streets this year!

We will open a new Safe Parking site at H Barracks as well as other new shelter facilities.

Because there are people who are still suffering out on our streets, sidewalks, and canyons each and every night and they need our help.

So, whether you’re a community member or a member of this City Council, understand that we are going to do more, we must do more, and I welcome your partnership to reduce homelessness, not your opposition.

But the responsibility is not ours alone.

Homelessness is a national crisis – up 18% nationwide -- and it’s present in every corner of our region.

And every city in the region – from San Marcos to Imperial Beach – needs to step up.

Because they, too, have vacant buildings that can be converted to shelters.

They, too, have underused parking lots that can accommodate a Safe Parking program.

They, too, have land where they can create a Safe Sleeping program.

They, too, can choose to build more housing.

It’s long past time for all the cities in this county to do their part and not simply rely on you, the taxpayers of this city, to continue to foot the bill.

It is also long past time for the County of San Diego to fulfill its responsibility on addressing homelessness in the region.

Mental health and addiction are often at the core of homelessness.

And behavioral health, mental health, and treatment for substance use disorders are all services that are supposed to be provided by county government.

The City of San Diego does not have a Health and Human Services Agency. But the County does.

They are the government entity vested with the responsibility and the funding for mental health.
I live and work in Downtown San Diego. Every day I see the serious mental illness that acts as a gravitational pull that keeps people on the streets.

The City has done everything within our limited authority to help on this issue.

We took a leading role in lobbying the State of California to pass CARE Court and conservatorship reform.

We did our part to prepare the region to receive new state-funded mental health and detox beds by amending our land use code to make it easier to permit treatment facilities.

Now it’s time for the County to step up and deliver the behavioral health treatment they receive many millions of dollars to get the very sick people living on our streets the care they need.

Over a year ago, the County Board voted to delay implementation of the state law that makes it easier for people suffering from severe mental illness to access life-saving care.

It did little in its one-year delay to prepare for its implementation, and it has yet to take meaningful steps to address the very real shortage of behavioral health care beds.  

And when they fail to live up to their obligations, we are all left picking up the pieces and paying the bills.

It strains our police, paramedics and hospitals. We cannot afford to absorb the impact of their inaction any longer.

My fellow San Diegans: it is my hope that anytime you see a person on the street suffering from extreme mental illness or addiction, that you think of the County of San Diego and ask them: When will they step up to provide the services needed to end this crisis?

There is another entity that also needs to follow through on their role to address homelessness.

Like you, I use our freeways every day and see the growing number of tents and garbage along on-ramps and underpasses. State property.

Like you, I find this unacceptable.

It is dangerous for people living in these encampments, distracts drivers and increases the risk of fires that our residents already know all too well.

The City of San Diego, over the last year, has received on average 300 complaints per month about people experiencing homelessness and severe tent encampments on state property.  

Complaints that we refer to CalTrans because legally, the City of San Diego cannot go onto state property to clear encampments.  

The situation is dire, and we need their help.

So, if the State can’t or won’t address these areas, they should give the City full authority to do this work and fully reimburse us for the costs.

We’re ready to partner and do this work, but we need action now!

I’m so passionate about this because it affects our bottom line at the City.

Every dollar this City spends responding to the lack of action from other cities, the County, or the State is a dollar not being spent on fixing our roads, upgrading our stormwater systems, or supporting public safety.

Even as we face these frustrations and challenges, I want us to take a moment to reflect on what history has taught us.

Some of you may know that I am a student of history.

I was a kid who watched C-SPAN rather than Saturday morning cartoons who majored in History at the University of San Diego.

History shows us that in times of great adversity, there is also great opportunity.

I’m reminded that in the 1990s, our region faced an economic crisis with the contraction of the defense and aerospace industries – the backbone of our economy at the time – leading to widespread job losses and threatening our city’s future.

But unlike so many once-thriving American cities that were pulled under by a struggling industry, San Diego chose a different path.

We re-deployed our resources -- our talent, innovation, and expertise -– and transformed our economy into one that was more diverse, more sustainable, and more resilient.

It wasn’t by accident. It was by design. It was by action.

We leveraged our world-class universities to become a global leader in life sciences, wireless technology, cleantech and other innovation industries.

Now, I see similar opportunity ahead – to choose a different path and turn a moment of great adversity into an opportunity to build something better.

I’m also reminded of my own story, growing up here as a native San Diegan in a family that was not well off, but always found a way to scrape together just enough to keep moving forward.

Who worked hard enough to improve our circumstances and allow this nerdy, brown, gay kid from Clairemont to earn the honor of sitting in this room as a City Councilmember, City Council President, and Budget Committee Chair, and now as Mayor.

That’s why I refuse to be pessimistic about our future.

We are a city of innovators, of dreamers, of doers.

San Diego’s story has always been one of resilience, determination, and reinvention.

And so, this is not the time for retreat!

This is not the time for us to slow down!

It’s time to double-down!

As your Mayor, I will use every day of the next four years to double-down on the priorities that I know matter most to you – and that have been the pillars of my administration:

• Keep you safe;
• Reduce homelessness;
• Build more housing;
• Fix the damn roads and storm channels.

San Diego, I’m here to tell you that no matter what…no matter the obstacles…we are moving forward!

Forward with courage and vision.

Forward to turn our challenges into opportunity.  

Forward to build on our progress.

Forward to be stronger, more resilient, and more responsive to you.

This is our moment to rise, to lead, and to show that even in the face of great difficulty our city will always move forward.

Thank you. May God Bless You, and May God Bless our great city. 

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