Sharp rise in rent expected in San Diego
By Christopher Reyes
San Diego’s beautiful weather, white beaches and fun nightlife make it a city that appeals to nearly everyone. San Diegans pay a premium for these amenities and over the next five years that cost is expected to increase greatly.
For those on a budget, San Diego is an unfriendly rental market. Each year students struggle to find affordable housing that is close to school.
Senior resident assistant Ryan Safar experienced this problem. As an RA, his housing is paid for by the University of San Diego.
“The cost of renting is definitely one of the reasons I became an RA,” Safar said. “One summer I stayed in San Diego and had to share an apartment with six other guys. That’s when I realized how hard it is to make renting work into a student budget.”
Students have trouble affording on-campus housing as well, according to senior Natalie Goering.
“Even on-campus housing is expensive,” Goering said. “It’s cheaper to live in my own room at the beach than share a room on campus.”
Finding affordable housing is soon to become more difficult as rents in San Diego County are expected to rise twice as fast as they have over the past decade, according to Los Angeles-based real estate company CBRE.
From 2004 to 2014 rent jumped a massive 24 percent. By 2019, the average monthly rent is expected to be $1,830. This is well beyond the average student’s budget.
The sunshine tax, a term that refers to the cost of living in an area with nice weather, has driven San Diego to be the fifth most expensive housing market in the nation.
Of the top five most expensive markets, four are in California.
Prices have been driven up in part by a booming national real estate market. Year to date, the real estate sector has performed extremely well, creating a nearly 13 percent return. 2014 has seen a 5.5 percent rise in rent nationally, one of the highest in recent years.
Limited housing has also caused rents to increase as renting becomes more popular. Fewer people can afford home ownership or choose not to buy a home. Even in a strengthening economy, the first-time homebuyer market is weak.
In addition, millennials, a group that includes most USD students, are beginning to move out of their parents’ homes and start renting. San Diego ranks among the most popular destinations for millennials and that trend does not seem to be changing.
There are simply too few vacancies for too many people seeking to rent. Reports have placed San Diego’s vacancy rates as some of the lowest in the nation.
The vacancy rate is expected to hover under 4 percent. A report by commercial real estate services firm Cassidy Turley puts San Diego’s vacancy rate at 2.6 percent, the second lowest in the nation. A normal market is considered to have a vacancy rate of 5 percent. A low vacancy rate drives prices up and makes housing harder to find, a common occurrence for University of San Diego students.
Rent is a problem for students both now and after graduation. As students shed the financial support of their parents and move towards financial independence, rent will become one of the highest, if not the highest, expense they have.
“I want to live in San Diego when I graduate,” Goering said. “I just don’t know if I’ll be able to afford it.”
Should graduates choose to stay in San Diego, they should anticipate rising rental prices as a large part of their budget.