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San Diego Landlords Offer Rent Concessions as Vacancies Rise

With rents plateauing and vacancies rising, San Diego landlords are offering concessions, like up to 2 months of free rent, to attract tenants.
San Diego Landlords Offer Rent Concessions as Vacancies Rise
  • San Diego’s multifamily market is now concession-driven, with landlords offering up to two months of free rent.
  • Average rents in San Diego County are $2,491 per month, with annual growth nearly flat at 0.5%.
  • The county’s vacancy rate is 5.2%, the highest since 1Q20, with Downtown San Diego reaching an 11.2% vacancy rate.
  • Even high-end luxury apartments are providing concessions, signaling a market-wide shift.
Key Takeaways

San Diego’s multifamily market has shifted dramatically, with more landlords offering more concessions to attract renters, as reported in GlobeSt.

By The Numbers

According to CoStar data, the average rent in the county was $2,491 as of early September, while rent growth has slowed down to just 0.5% annually. 

Meanwhile, vacancy rates have climbed to 5.2%, the highest level since the onset of the pandemic, driven by an affordability squeeze for many tenants.

This is a sharp contrast from the rapid growth seen in 2022, when average rents surged by 13%—a jump typically seen over several years. 

This rapid increase, coupled with rising living costs, has led to greater financial pressure on renters, forcing landlords to adjust by offering incentives such as free rent or reduced rates.

Common Concessions

With affordability becoming a primary concern for renters, concessions are now a widespread tool used by landlords across San Diego. 

Lucinda Lilley, an apartment specialist and former president of the Southern California Rental Housing Association, noted that renters are more willing now to forgo location and amenities in exchange for lower rents. 

According to a report in the San Diego Union-Tribune, concessions such as up to two months of rent-free living are being offered at some of the county’s newest and priciest apartment buildings.

This is particularly evident in luxury markets like Downtown San Diego, where the vacancy rate has surged up to 11.2%. In the heart of the city, a recently completed 431-unit apartment tower, with an average rent of $4,803 per month, is now offering up to two months of free rent to lure in tenants.

Following Suit

Outside of Downtown, high-end markets like the North Shore Cities, which include Del Mar, Encinitas, and Solana Beach, have also felt the need to provide incentives. 

In these areas, the average rent is $3,537, and vacancy rates are at 5%. A notable 252-unit complex that opened in 2018 is now offering up to one month of free rent.

In the La Jolla/UTC area, known for its luxury apartment communities, similar trends have emerged. A high-end development completed in 2022, where rents average $5,147 per month, is offering up to two months of free rent on select units. 

This reflects the overall trend of even the most expensive apartments offering concessions as the market adjusts to weaker demand.

Holding Firm

While many parts of the county are shifting toward concession-driven strategies, not all markets are following suit. 

The South I-15 corridor, which includes Sorrento Valley, Miramar, and Mira Mesa, has maintained relatively strong demand. 

In these areas, where the average rent is $3,017 per month and the vacancy rate is lower at 4.3%, no concessions have been reported, indicating demand remains stable compared to other parts of the county.

What’s Next?

The multifamily market in San Diego is clearly in transition, with landlords adjusting to a flattening rent curve and growing vacancy rates. 

While concessions are now the norm in many high-end areas, other parts of the region, like the South I-15 corridor, remain relatively strong. 

As affordability continues to weigh on renters, the future of San Diego’s multifamily market will likely depend on how quickly the cost of living can align with wage growth and whether new developments can fill the gap in demand for more affordable housing options.

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