Renting a House in San Diego just got More Expensive

Renting a house in San Diego just got more expensive.

Rent for single-family homes in San Diego is up 10 percent in a year.

The cost to buy a San Diego single-family home is out of reach for many, but renting one isn’t easy either.

The median rent for a three-bedroom house in the first quarter of 2022 is $3,400 a month in San Diego County, according to Attom Data Solutions. That is an increase of 10 percent in a year. San Diego metro area — which includes all of San Diego County — had the 12th highest monthly price in the nation, ahead of places you might expect to cost more: Washington, D.C., Honolulu and nearby Orange County.

Renting single-family homes has become a big business for institutional investors, but the focus for those companies is mainly in the South and Southeast. Corporate landlords are estimated to own 1.5 percent to 2 percent of single-family homes in the United States, according to the National Rental Home Council and other industry watchers. Housing analysts say that isn’t enough to sway prices in a heated housing market, but it hasn’t stopped considerable criticism of Wall Street firm’s nabbing up properties.

In an interview with 60 Minutes on investor purchases, Gary Berman, CEO of Toronto-based corporate landlord Tricon Residential, said the American Dream of owning a house has now changed.

“Well, if we think the American dream is embodied in a suburban home with a yard and a white picket fence — then I think we’re making the American dream much more accessible,” he said. “You can rent the American Dream.”

Berman’s comments were shared widely on social media and criticized as being out of touch and greedy. He has sought to clarify his comments, telling the Toronto Star that his company is fixing homes that are in bad shape and giving an opportunity to live in a house, something that many people would otherwise not be able to afford. Tricon now owns about 30,000 single-family homes in the United States.

Tricon does not have any rentals available in San Diego and it does not own any properties in the region, according to property records. That is in line with a larger trend of investors avoiding costly Southern California.

Qualification requirements for renting the home are a household gross income of three times the monthly rent, no record of evictions, no felony convictions and a “favorable credit history,” the company said.

Actually getting a rental could be difficult. Lucinda Lilley, president of the Southern California Rental Housing Association, said the countywide vacancy rate is 1.25 percent for all rental types. She said single-family rentals are popular, but it’s important to remember all rental types are in high demand — not just houses.

Lilley is also the vice president of FBS Property Management, which manages roughly 425 single-family rentals in San Diego County. She said there is no vacancy, with all homes rented out.

“As soon as we list it, it’s rented. Seriously,” she said. “That’s why we need to make sure it is completely move-in ready. Because people want to move in quickly.”

Nathan Moeder, a local housing analyst, said San Diego’s main problem is not corporate landlords, but a lack single-family homes. He’s been a longtime critic of homebuilding locally, and throughout California, which seeks to maximize the number of housing units with apartments.

He said it’s understandable that denser development is needed because of dwindling land options. Yet he said the statewide push for more housing units — with no distinction of what kind — ignores the fact that a lot of people still want to live in a traditional, single-family house.

“We are building the wrong type of housing. Period,” he said.

Moeder, a principal with real estate analysts London Moeder Advisors, said families renting single-family homes — at significant cost — is evidence that California policy should encourage different types of housing.

“You are forcing families into one-bedroom and studio units,” he said.

The last big year for single-family home construction in San Diego County was 2004, during the housing boom, when 9,555 were constructed, said the Real Estate Research Council of Southern California. In the last 10 years (2011 to 2021), the region has averaged 2,896 single-family homes built annually.

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Nationwide single-family home prices by county
Some of the most expensive rental markets feature familiar names across New York and California. Rates are based on three-bedroom single-family homes.

1. (New York) Suffolk County: $18,000 a month (down 10 percent year-over-year)
2. (New York) New York: $9,500 (down 17 percent)
3. (Florida) Collier County: $7,000 (up 35 percent)
4. (New York) Westchester County: $4,900 (up 9 percent)
5. (California) San Francisco County: $4,750 (up 1 percent)
6. (California) San Mateo County: $4,195 (down 7 percent)
7. (New York) Nassau County: $4,000 (up 14 percent)
8. (California) Los Angeles County: $3,800 (up 6 percent)
9. (California) Santa Clara County: $3,725 (up 1 percent)
10. (Connecticut) Fairfield County: $3,500 (up 3 percent)
11. (California) Alameda County: $3,495 (up 9 percent)
12t. (California) San Diego County: $3,400 (up 10 percent)
12t. (Massachusetts) Middlesex County: $3,400 (up 6 percent)
13. (Virginia) Arlington County: $3,400 (up 5 percent)
14. (California) Orange County: $3,395 (up 4 percent)
Data Source: Attom Data Solutions