San Diego's Rental Market: Thousands of New Units Set to Transform the City

Author:  SANCO Development

Published: 2:00 PM PDT September 1 , 2024

Updated: 1:46 PM PDT August 30, 2024

San Diego County is on the cusp of a significant shift in its housing landscape, with thousands of new rental units scheduled to be completed by the end of 2024. This wave of construction is part of a broader national trend, where apartment development is hitting record levels. According to a recent study by Rent Café, developers are set to complete over 518,000 rental units nationwide this year—a historic high and a 9% increase from 2023. For San Diego, this surge in construction couldn't come at a better time.

Addressing the Housing Crisis

The housing crisis in San Diego is no secret. With soaring home prices and a rental market that has struggled to keep up with demand, the need for new housing is critical. Doug Ressler, Manager of Business Intelligence at Yardi Matrix, emphasized the importance of increasing supply to tackle the root cause of the problem: a severe shortage of available housing. This current boom in construction, which began three years ago, is a direct response to this need. However, with rising inflation, higher interest rates, and increased construction costs, there's uncertainty about how long this pace can be sustained.

New Developments Across the County

San Diego County is set to welcome 3,226 new rental units by the end of the year. The City of San Diego will see the bulk of this growth, with 2,016 new units coming online. Oceanside and Chula Vista will also experience significant increases, with 369 and 414 new units, respectively.

Chula Vista's Mayor John McCann is optimistic about the impact of these new developments on the local housing market. Recognizing the urgency of the situation, the city has streamlined its building permit process to make it easier for developers to get projects off the ground. "We are in a housing crisis whether it’s renting or buying a new home; there’s not enough supply," said Mayor McCann. The city's efforts to digitize the permitting process aim to reduce delays and ensure that new housing projects can move forward quickly and efficiently.

Looking Ahead: A Mixed Forecast

While Rent Café's analysis points to a slowdown in new apartment construction in major cities like San Diego and Chula Vista over the next five years, Escondido is expected to see a significant uptick. The city is projected to experience a 66% increase in new apartment construction, bucking the trend of other large cities in the region.

This upcoming influx of rental units offers a glimmer of hope for those struggling to find housing in San Diego. However, the challenges of affordability, rising costs, and future economic uncertainties mean that the journey toward resolving the housing crisis is far from over. As these new units come online, they will play a crucial role in shaping the future of San Diego’s housing market and the overall livability of the region.