More than half of San Diego County renters are burdened by housing costs

More than half of San Diego County renters are burdened by housing costs
Apartments in the San Diego neighborhood of Talmadge are shown on Jan. 2, 2019. Photo by Megan Wood/inewsource

San Diego County is one of the least affordable places to live in America, and renters know it.

In 2017, 57 percent of the county’s renters were considered burdened by their housing costs, meaning they spent 30 percent or more of their income on rent and utilities. The figures come from data recently released by the Census Bureau’s American Community Survey.

The high cost of housing especially affects low- and middle-income families, who have less money to spend on food and other necessities.

The problem is even worse for the 28 percent of renters in the county who spent more than half their income on rent and utilities in 2017. People with higher rent burdens are more likely to skip doctor appointments and avoid paying for medications, and they are less likely to save money.

“Often times home ownership is really the vehicle for wealth creation,” said Frank Nothaft, chief economist at CoreLogic, a housing data company. “So for families who are rent burdened, that means it’s just going to be that much harder for them to save money to eventually buy a house and build wealth.”

San Diego County’s homeowners have fared better since the 2007 recession than its renters. In the early 2000s, housing costs skyrocketed and it was easy for people to take out loans, even if they couldn’t pay them back.

“People didn’t care what their home payments were. … They would buy any house at any price because if they didn’t, that house will become more expensive,” said Mark Goldman, a real estate lecturer at San Diego State University.

In 2005, 50 percent of the county’s homeowners with mortgages were classified as “burdened” by their housing costs, according to Census data. That changed when the recession came.

The Federal Reserve lowered interest rates and home buyers had to prove they had enough income to repay their loans. Housing prices and mortgage rates tumbled. The cost of a 30-year mortgage reached an all-time low in 2012.

Homeowners could refinance their mortgages to these lower rates, cutting the amount they needed to spend on housing each month. By 2017, the number of San Diego County homeowners burdened by their housing costs dropped to 38 percent.

And as homes became cheaper, more people bought them and turned them into rentals.

“During the housing bust years, we just saw a surge in the number of renter households that drove rental demand across the country, that pushed up rent and pushed downward rent affordability,” said Aaron Terrazas, senior economist at Zillow.

Rent burden is as much of a problem now as it was during the peak of the recession. The number of renters is on the rise, and the cost of renting continues to climb. The median gross rent in San Diego County in 2017 was $1,598.

Economists point to the housing shortage as the leading cause of high rents in the county and across California. The not-so-easy solution is to build more housing.

Incoming California Gov. Gavin Newsom wants developers to build half a million homes every year for the next seven years, more than six times what’s being built now.

But San Diego County has been resistant to adding more housing. The county produced 4 percent fewer new housing units in 2017 than it did in 2016.

A central piece of San Diego Mayor Kevin Faulconer’s affordable housing plan was put on hold after labor unions and affordable housing advocates spoke out against it. The plan would have encouraged developers to build homes for middle-income families but included families of four with incomes as high as $120,000.

In November, Faulconer proposed a plan to let developers build new homes without parking spaces if they are within one-half mile of a transit stop.

“I think that the people who were concerned about the cost of housing should be showing up at planning meetings and zoning meetings, and speaking out to encourage higher density and faster approvals to get housing units online,” Goldman from SDSU said.

3 Comments
  1. taxpayer2017 2 weeks ago

    Another more housing density and crowding will solve all problems story. Blame the low wages on the employers and the extra monetary benefit of living in the sunshine that is worth at least $1000 a month in comparative income. In the colder states the rents may be $300 per month less than comparable apartments in San Diego County. The cost of housing is a nationwide issue. Overcrowding puts extreme burdens on water, gas, infrastructure, schools. Need more schools? No problem just put a bond issue on the ballot and if 50% plus one of the renters who are becoming the majority of voters say yes – their rents will increase again. Not enough water to supply the new apartments? No problem – just put a bond issue on the ballot. Once approved the rents will increase again.

  2. Brian McInerny 2 weeks ago

    If the market for homes in San Diego county is already more expensive than any other area how is adding a whole lot more unsustainable dwellings in an arid climate going to solve any problems? The over-development of the region is responsible for all of the problems associated with congestion that we put up with on a daily basis. Building wider freeways and piling up more homes is not the answer. I know a party with a second home that is a condo. They charge a rent that is much lower than most all the other properties in their project. They could ask quite a bit more but are happy to spread their good fortune around. Developers build projects when they can make the most profit. There is no concern for the buyer other than can they pay the mortgage. Our mayor stated that Robertson Ranch had been approved 10 years prior to its development but the builders waited until the profit margin was adequate before moving ahead. It seems the current way of housing growth does not bode well for affordability no matter how you slice it. As time goes by the homeowners who rely on services from people whose income is one quarter of what they make will need to search far and wide to find someone to clean their house. Perhaps this is why we have such an influx of people from other countries looking for work. We have created the monster we are complaining about by living unsustainable lifestyles in 3 to 6000 square foot homes. More of that is not a solution.

    • Addie 2 weeks ago

      Dear Brian,
      You simply have to stop making so much sense. It disturbs the symbiotic relationship between developers and local politicians that has taken so long to reach the point of nearly total mutualism. Don’t you understand that our cities are supposed to be run like businesses to maximize profits for all? Isn’t the country being led by the greatest businessman of all and look how wonderful everything is? When people finally realize that living in a larger home won’t make them any happier, that driving a Subaru will get you there just as good as a Range Rover, then and only then will things change. Personally, I’m not holding my breath. I’ve never been disappointed expecting the least from most of my fellow human beings.

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