By Shannon Handy / CBS8 / July 7, 2026
San Diego’s apartment vacancy rate has surged to a record 6.1 to 6.2 percent, driven largely by a boom in new construction. This figure surpasses the previous record of 5.7 percent set during the Great Recession in 2009 and reflects a dramatic increase from 2.6 percent in 2021, according to Josh Ohl, senior director of marketing analytics for the real estate tracker CoStar.
The increase is primarily attributed to a significant influx of new apartment units, with around 5,000 new units added in 2024, followed by another 5,600 in 2025. This year alone has seen about 4,000 new units enter the market. Ohl noted the steady uptick in vacancy rates, which has mirrored the growing supply of apartments. “It’s definitely been ticking up steadily for probably about the last four straight quarters,” he said.
Despite the increase in available units, average rents in San Diego have not decreased. In fact, according to Zumper’s June rent report, San Diego remains the 10th most expensive rental market in the U.S., with one-bedroom rents increasing slightly from the previous year. However, some landlords are responding to the higher vacancy rates by offering incentives to attract renters. Erik Anderson, senior managing director with global real estate firm Newmark, mentioned that landlords have begun offering perks like “four to eight weeks free” rent.
Anderson also highlighted a trend known as “concession hopping,” where tenants move between buildings to take advantage of the best deals. He anticipates vacancy rates will begin to normalize over the next 12 to 18 months as both the influx of new residents and new construction stabilize. However, San Diego’s building boom is far from over, as the city faces a requirement to plan for over 100,000 new housing units by 2029 amid ongoing housing shortages in California. “We’re still only like 30% through that of what we’re supposed to deliver,” Anderson remarked.
Anderson explained the construction boom we’re seeing now actually started during Covid during a time when interest rates were low, demand was high, and local and state laws allowed for more construction in dense areas.
“We had this perfect storm five years ago, where tons of people flocked, tons of money came to San Diego to start building apartment buildings, and so we’re now just starting to see that pipeline really come through, because building in San Diego takes a long time, in California in general,” said Anderson.
“Despite the increase in available units, average rents in San Diego have not decreased.”
Huh, it was supposed to do the opposite, what went wrong ?
“… the city faces a requirement to plan for over 100,000 new housing units by 2029..”
Right here we see the problem – who is requiring us to create over 100k new housing units in the next 3 years ? That is insane !
It’s a nice idea to set goals and try to reach them, but for a locality to be “required” by the State is simply tyranny. I know, it’s a word that gets overused, but the M-W definition is “oppressive power exerted by government”. Doesn’t that describe exactly what the State is doing in forcing us to meet its absurd housing goals set from afar ?
How would it sit with Californians if Trump pre-empted California housing laws, and overrode all of the recent YIMBY legislation ?
Yet this is exactly what has transpired in the past several years, only on the smaller scale of State government versus local government.
Perhaps there is no legal way to challenge these laws, I don’t know, but certainly there are other ways to resist and push back, with the most basic one being VOTE !
Gloria, the City Council, and that Board of Sups all defer to the Party Line without resistance. This Party Line emanates not from Sacramento, but instead from the San Francisco political machine that has been building since the 1960s.
Instead of local representation that responds to the needs of the local citizens – we are ruled by puppets whose strings are pulled from far away by the likes of Scott Wiener and his YIMBY minions. We are not San Francisco and we don’t WANT to be San Francisco !
Can’t San Diego find a way to stand up to this intra-state imperialism ?
If you don’t like what is happening, please, get out there and vote !
Less than half of all registered voters voted in the 2022 election. Newsom won by 2M votes out of 10M votes cast. Over 10 million people simply did not vote !
Starting with the Mayor and going all the way up to the Governor we need to vote these people out and prevent their clones from stepping in (Gloria and Newsom are both termed out)
Building more housing and therefore putting downward pressure on rental and home values is important. The younger generations need the same kind of housing affordability options that the older generations had. I do not think it should be the state’s priority to make rental vacancy so tight that landlords can charge ever esclating soul-crushing rents on our youth.
Every single young person I know is happy to see more rentals being built and is giving them for *once* some kind smidgeon of hope, and I welcome it. Sacremento needs to force the municipalities to build. Local homeowners should not have a god-given right to extract economic rents from future generations by forcing no where near enough to be built. We needed more housing decades ago, but the next best time is now.
Adam – I don’t like to be merely critical, but your comment makes no salient points and simply indicates a superficial level of thinking that gives rise to so many poorly informed opinions, opinions that try to take the place of facts.
*”The younger generations need the same kind of housing affordability options that the older generations had.”
Where do you get this principle from ? Has any generation had “the same kind of housing affordability options” that the previous generation had ? Are cars as easily bought today as they were a generation ago ? This simply makes no sense and seems to merely be a lament that life it is not as you like it.
*”I do not think it should be the state’s priority to make rental vacancy so tight that landlords can charge ever esclating soul-crushing rents on our youth.”
Why should this be the State’s business ? What Constitutional principles, State or Federal, dictate that the State should be involved in rent statistics ? “Soul crushing” ? If it’s really crushing your soul, why have you not considered less expensive options ? My soul is not crushed because I can’t live in La Jolla.
*”Every single young person I know is happy to see more rentals being built and is giving them for *once* some kind smidgeon of hope, and I welcome it.”
Every single person you know is assuredly a number less than 1,000. When the county has over 3 million current residents, how can the desires of 1,000 be worthy of consideration ?
“Sacremento needs to force the municipalities to build.”
Again, where does the State have the authority to force anything along these lines ? The gist of the Bill of Rights is to protect the citizens from the government, not ask it to ensure we have what we want or to provide our needs. Nowhere does either the State or National Constitution declare that the government shall provide resources if they become scarce or unaffordable, not even for food !
*”Local homeowners should not have a god-given right to extract economic rents from future generations by forcing no where near enough to be built.”
“god-given right” ? Come on, man, this isn’t even good hyperbole. I’m a homeowner, how am I “extracting economic rents” or “forcing no where near enough” housing to be built ? By opposing 17 unit apartments being built on my cul-de-sac ? If you are ever fortunate to own, I think you’ll sing a different tune when someone wants to build something next door to you that drastically alters the characteristics of your street, characteristics that figured prominently in your selection of that domicile in the first place.
Why do you feel compelled to blame home owners for the current situation ? Are you unable to see that the primary roadblock to home ownership is cost, and that the increase in cost for housing in San Diego have very little to do with supply and much more to do with how the value of a property is determined ? Instead of a home’s value being determined by it’s construction, it’s neighborhood, it’s proximity to schools, stores, etc , houses are now valued by “How much money can this make for me ?” A developer can easily outbid a family on a half-acre lot – they have cash and can and do pay up to 50% more than the market value. They make money because they build 14 units of apartments on that half-acre lot. I am referring here to actual, under-construction units, not some theoretical, imaginary scenario, and I can supply addresses if needed (they’ve already been in the news).
*”We needed more housing decades ago, but the next best time is now.
Were you even around “decades ago”, or is this simply something you read that sounded like a good sound-bite ? I bought my first home ever in San Diego in 2000, only 2 1/2 decades ago. It was a condo, and I bought it for $106k. Redfin says it’s now worth $638K, and you want to blame that on local homeowners ? Get real !
As someone else has mentioned – follow the money. Who makes money on a 14 unit building placed on a half acre lot ? Not the neighboring homeowners, I can guarantee that !
You act as if there are no alternative locations to build. How about building your hi-rises and hi-density cracker boxes downtown ? There’s lots of bus and trolley access there, and the skyline is already shot.
Why does your shallow thinking lead you to go after homeonwers – people who have paid out of their own wages – down payments, monthly mortages, home insurance policies and property taxes ?
To cut my message short, “It’s the money, stupid!” The issue of housing is not and never was about vacancies, it was about the inability of people to pay $4,000 to $6,000 a month for decent quarters. Look around and you will find people turning apartments into communes. Time to reduce rental rates or for the City to scrap Midway Rising and turn the property entirely into $1,500 rentals.
Ronald – you are exactly right, it is about the money (I could have lived without the stupid invective).
The key issue to understand is why have the real estate rates gone so crazy in San Diego (and elsewhere) ? No one asks this question.
To give an example, I made my first housing purchase in 2000 – a condo in Clairemont for $106k
Today, redfin estimates its value at $638k ! There’s no way the actual value of that place has increased that much, so how do we account for this ?
Speculation.
Housing is now used as a financial instrument, a means to make money, instead of providing someone with shelter and possibly a place to arise their children.
It’s gone from being your “nest” to being a financial commodity for the wealthy to exploit. Mortgage Backed Securities and other real estate deriviatives (swaps, futures contracts, option calls and puts) have completely disconnected homeowner from lender. And once you start “leveraging”, things start to get really “interesting”.
Remember when the bank called it “investing in the community” ? If you have a mortgage, how many times has it been sold ? I’ve been in my house for 23 years, and the loan has been sold at least 5 times.
Homeowners have never questioned this madness because we “benefit” by the easy cash available through our supposed “equity”. Equity should be amount-borrowed – amount-still-owed, which would be a very slow-growing thing to say the least, but who isn’t seduced by the “make money fast” promise of rising home prices ?
A seemingly unrelated topic has been the taxation of unrealized assets – the so-called “Wealth Tax”. It seems patently unfair – you buy $1,000 worth of a stock, it’s value doubles and now you hold stock that is worth $2,000. But it’s not worth $2,000 until you sell it, until it is sold you have zero additional dollars in your wallet. Why is this being discussed ? Because people feel the rich are exploiting a technique called “buy, borrow, die”. In the above example, you borrow against your stock, theoretically worth $2,000, and thus gain access to some of your profits without paying capital gains tax. There is a simple fix for this – tax any money that is borrowed against an unrealized gain as a realized gain, because that’s what it is – you are getting access to the increased value of the asset.
But you know what this is exactly like ? Home Equity Loans & Lines of Credit. And don’t you think the homeowners will squawk if they start having to pay 15% tax on money take out in a HELOC ? Yet it is this sort of thing that has led us to the current situation, where the value of a house is not based on anything “real”. It’s not based on “supply & demand”, it’s based on speculation as whimsical and unpredictable as pork bellies.
“Communes”?? Define it.
I have lived in these communes, 4-5 people in a two bedroom apartment. I also remember wearing flip flops in the shower…