Rents are down slightly from this point last year, according to Rent.com, but that doesn't mean they're affordable.
Average rent for a studio apartment in San Diego is more than $2,300. For a two bedroom the average raises to $3,700.
The San Diego County Board of Supervisors is trying to tackle the issue with a new initiative looking at the impact private equity is having on housing costs.
The board approved a series of actions at a meeting July 16. The county wants to know exactly how many condos, townhouses and single-family homes are owned by commercial entities and in what part of the county they're in.
It also looks at whether there's a legal remedy — litigation — to pursue against corporate landlords in response to allegations of price-fixing, price-gouging and tenant harassment.
District 3 Supervisor Terra Lawson-Remer said at the meeting the actions are necessary because of the effect it's having on prices.
"(They're) buying up vast numbers of homes, driving up prices and making it nearly impossible for local families to afford housing," Lawson-Remer said. "We're talking about mega corporations, global corporations, private equity firms ... we're not talking about small mom-and-pop investors."
Representatives for local property managers spoke against the measure, saying it was a waste of county resources and that there are already regulations on the books to deal with unfair and illegal pricing and tenant treatment.
Private equity firm Blackstone is the target of much of this critique. The firm acquired about 5,600 local rental units in 2021 and, according to tenant union the Alliance of Californians for Community Empowerment, has raised rents significantly since.
Blackstone told KPBS it charges tenants, on average, 20% less than the San Diego market average.
Michael Reher, an assistant finance professor at the Rady School of Management at UC San Diego, said research suggests rents do increase after investors take over, but that's because they improve the properties.
"A lot of the increase in rent prices comes through what we might think of as an improvement in quality," Reher said. "So, a lot of institutional investment in housing is associated with reductions in crime rates and rehabilitation of the depopulated properties and various other measures of housing quality as well."
But because of the type of housing institutional investors buy and improve are often "lower quality," Reher said, people who can't afford higher rents are affected.
Tenant groups said software used by corporate landlords to determine rent prices amounts to price-fixing and have filed suit.
Even as rents go up, Reher's skeptical there's a significant impact on the overall cost of housing.
"I'm sure it has some effect," Reher said. "Rental costs in San Diego have really surged (but) is this the dominant driver of it? I mean ... probably the answer is no."
While private equity might own eye-popping numbers of rental units in San Diego, it's a small percentage of the market.
Blackstone owns fewer than 1% of San Diego's rental housing units, a company representative said.
When it comes to detached single-family homes, institutional investors own fewer than 5% locally, Reher said.
There's one policy prescription that research shows does help bring down housing costs, Reher said.
"The prevailing consensus, I think in the research community is (that) removing any constraints on (the) building of new housing is kind of like one of the most important things that can be done for improving housing affordability, rather than limiting investment by particular kinds of institutions in existing housing," Reher said.
New housing isn't addressed specifically in the county's new initiative, but in a statement, Lawson-Remer said it's issuing more building permits.
"San Diego County issued more housing permits last year than any year since 2005," Lawson-Remer said. "We’re in the process of building 10,000 new affordable units on County-owned land (and) we’ve streamlined the permitting process for new construction."
