San Diego County rents are expected to rise through 2029, but a recent boom in apartment construction helped make the county more affordable than neighboring Orange County, according to a University of Southern California forecast released Tuesday.
The USC Lusk Center for Real Estate's Casden Real Estate Economics Forecast projects average annual rent growth of 1.5% in San Diego County through 2029.
San Diego County's average rent was $2,592 in June and is forecast to reach $2,707 by June 2029. Its vacancy rate, which was 6.31% in June, is expected to fall to 4.9% as recently built units are absorbed.
The report said San Diego County added about 16,000 apartments since late 2023, roughly twice the new supply added in Orange County during that period. As a result, average San Diego County rents are about 7% below Orange County's, according to the forecast. Orange County's average rent was $2,792 in June.
"Housing cannot be affordable unless we have plenty of it," said forecast author Moussa Diop, an associate professor of real estate at the USC Sol Price School of Public Policy.
The report credited increased density and San Diego's Complete Communities initiative with helping the county respond to housing demand. It also said recent construction was not limited to luxury apartments, with midrange Class B units making up about 34% of recent deliveries.
"San Diego and the Inland Empire show that there is still hope for affordability, but meaningful gains take time and sustained development," Diop said.
The forecast cautioned that new housing deliveries are expected to slow, which could threaten San Diego County's affordability gains.
Across Southern California, the report projects annual rent growth of 1.4% in Los Angeles County, 1.9% in Orange County, 2.2% in Ventura County and 2.4% in the Inland Empire.
The forecast cited persistent inflation, elevated interest rates and high construction costs as obstacles to future housing development.
"Southern California's housing shortage is a problem we created, but it is also a problem we can solve," Diop said.
