Inflated land prices aren’t an unintended consequence. They were the expected outcome.
By Lisa Sinclair
San Diego’s housing strategy is built on a simple premise: rezone large swaths of the city to increase the housing supply until everyone can live where they want, and pay a rent they want to pay.
It’s a simplistic version of supply and demand that ignores the one factor that matters most— land value.
When governments increase the number of units that can be built on a property, they increase the value of that land. That is basic economics that everyone can understand.
In fact, during the implementation of the 2005–2006 Downtown Community Plan, officials warned that increasing density would drive up land prices, decreasing affordability. (Journal of San Diego History, Spring/Summer 2025, pp. 61-63):
“If we do add the FAR [allowed building capacity] automatically upfront, most of the time the ones who benefit from it the most are the landowners who are selling the land, because the buyers… the developers buy based on the FAR they are allowed to develop.” —Nancy Graham, 2006 Executive Director of CCDC
Rising land costs set the baseline for every future project and every future property sale: developers pay more to acquire land, projects must justify higher costs, and the resulting housing is priced accordingly, mostly at the higher end of the market.
Supporters argue that spreading land costs across more units lowers the cost per unit. That may sound true, but in practice, the added development potential is priced into land across the entire market. The result is higher land costs citywide, not lower housing costs.
These dynamics apply to the single-family home market as well.
The city pushed its upzoning policies so aggressively— especially with near-unlimited ADUs on single-family lots— that it eventually had to scale back.
But by then, the effect was already built in. That added development potential had already been priced into land values, pushing up rents, raising the cost of entry for new buyers, and helping explain why home prices in San Diego remain elevated relative to other cities.
With the Mid-City Communities Plan Update underway, the same pattern continues: upzone large swaths of single-family neighborhoods and frame it as equity and fairness even though the land-value economics will contribute to an ever-widening wealth gap. This is not a YIMBY vs. NIMBY debate. It’s a property-cost problem driven by upzoning that affects all residents.
As a homeowner, I benefit from rising land values, but that is precisely the problem. Upzoning policies reward existing property owners while making homeownership more difficult for the next generation.
San Diego is not making housing more affordable. It’s making land more expensive—and pushing housing costs up with it.
Lisa Sinclair served on the Kensington-Talmadge Planning Group for the past seven years and currently lives in Kensington.
The so-called “NIMBYs” are just people who do not want to realize their gains but actually want to live in their neighborhoods.
And the heirs get the stepped up basis. Reminded me of Darwin Deason who passed with the house on Spindrift on the market for 92.5
I don’t personally have a problem with that. If heirs aren’t using a property as a primary residence, then Prop 13 should not apply.
All of the assertions here are not based on data, just vibes. No cited research at all. I live in Mid-City and am watching rents decreasing. An apartment around the corner went from $2300 to $2100 per month in two weeks because the absentee landlord couldn’t hook anyone with the higher rent. Rents are coming down because of higher density.
Civil service “planners” did not create the land value nightmare that has fueled the homeless and low income housing problem that has overwhelmed us today. Poorly educated and poorly trained elected officials created the problem because they are beholden to the building trades and lobbyists who plaque City Hall on behalf of their building contractor clients. Civil service employees who object face the same fate we are witnessing all across the federal government that objecting to authority means losing your job and career. Place the responsibility where it properly lies. Voters brought anti-planning lobbyists into City Hall at our expense.