Q: Are rising rents in San Diego County bad for our economy?

Kelly Cunningham, National University System

Kelly Cunningham

Answer: YES

San Diegans already pay among the highest shelter costs in the nation. On average, San Diego households spend nearly 38 percent of their budget on housing. Rising rent means even less is available for other spending among local businesses. It is daunting for renters to save enough for the down payment to purchase already excessively priced homes. The solution is to build more homes, but hurdles and costs to construction significantly hinder this from happening.


Phil Blair, Manpower

He is not participating this week.

David Ely, San Diego State University

David Ely, San Diego State University, associate dean and professor of finance (EconoMeter panelist from 11/22/2015) ( / San Diego State University)

Answer: YES

The rising rents reflect growing demand for housing outpacing the construction of new rental units. Since this imbalance cannot be eliminated quickly, rental rates are likely to continue to rise for some time, shifting disposal income toward housing and away from other goods and services. Because housing is a major component of living expenses, high rental rates deter businesses from relocating to San Diego and discourage workers from accepting job offers from local organizations.


Gina Champion-Cain, American National Investments

Gina Champion-Cain

Answer: NO

Rental costs are a simple function of supply and demand. Barriers to housing construction have kept rental stock relatively stagnant while demand has increased. A bad formula for renters but not for the local economy. Tenants allocating 40 percent of their income for housing are not present in weak economies. Strength and desirability of our region are confirmed by continued housing demand at ever increasing rental rates.

Alan Gin, University of San Diego

Alan Gin


Answer: YES

High housing costs make it more difficult to do business in San Diego. Businesses have to pay higher wages to attract employees, which raises labor costs. Also a problem is the stress that high rents put on renters, particularly those with lower incomes. Those with low incomes would spend virtually all of any extra money they have on other goods and services. Instead, they have to spend the money on rent, part of which flows out of the local economy.

Gary London, The London Group Realty Advisors

Gary London

Answer: YES


Rising rents reflect the imbalance between supply and demand. We don’t build enough. When we do, over regulation and high construction costs combine with these market forces to cause the increase. Higher rents negatively impact our economy and limit housing opportunities for those of moderate income. It is mostly not about gauging: Profit margins for owners are not abnormally high.

Jamie Moraga, intelliSolutions

Jamie Moraga

Answer: YES

San Diego renters are spending nearly 40 percent of their monthly income on rent. High median rent coupled with the challenge of purchasing a home makes cost of living a significant obstacle to our local economy. Our higher cost of living causes members of the workforce to consider relocating to other cities or not coming to San Diego at all. This can drive up the cost of hiring and retaining a skilled workforce.


James Hamilton, University of California San Diego

James Hamilton

Answer: NO

The key question is why rents are rising. One reason is more jobs and income growth. As people have more money to spend, rents go up as a reflection of a stronger economy. However, another factor in rising rents is regulations that limit our ability to build more homes for new residents to move into. Those regulations may mean a higher quality of life, but there is a price we pay for that.

Gail Naughton, Histogen

She is not participating this week.


Austin Neudecker, Rev

Austin Neudecker

Answer: YES

Rising rents help real estate investors, but hurt the rest of the public. We compete for people like any city: college grads, families, high-tech labor, retirees, etc. Decisions on where to move depend on factors like jobs, cost of living, education, etc. San Diego is already fairly expensive. If rents go up faster than salaries, San Diego becomes less attractive. Ultimately, we should encourage more development and remove barriers that prevent new projects from getting started.

Norm Miller, University of San Diego

Norm Miller


Answer: YES

Yes if you are a renter, no if you are an owner. Yes if you are an employer and rents rise faster than wages as they have been. In general, real estate prices and rents have constrained the economic growth of the economy. Rising rents are a signal that demand is strong but also that our NIMBY mentality has made it nearly impossible to approve and build dense, smaller units that are more affordable.

Bob Rauch, R.A. Rauch and Associates

Robert Rauch

Answer: NO


Rents as a percentage of income are lower in San Diego than in other areas of California and rising rents are being outpaced by higher wage growth by a wide margin. The economy will only become impacted if rental rate increases outpace the level of wage increases. Given the recently passed statewide minimum wage increase of over 8 percent annually over the next 6 years, that will not happen!

Lynn Reaser, Point Loma Nazarene University

Lynn Reaser

Answer: YES

High and rising rents represent a burden for many households, a constraint on spending, and a factor limiting business expansion and job growth. These costs are partially offset by the receipt of rental income flowing to resident landlords and the spur to future building. Households paying two-fifths of their income on rent have less to spend on other goods and services. Companies may have to pay higher wages or opt to expand outside the region.


John Sarkisian, SKLZ

John Sarkisian, Pro Performance Sports

Answer: NO

Rising rents reflect a strong demand for apartments meeting a limited supply. As the rents have increased, it has made it economically feasible for developers to start new apartment construction. New construction creates jobs and economic activity. With building permits for multifamily units at a 10-year high, there maybe a leveling off of increases in 18 months. If local governments would reduce processing costs and building permit fees more units would come to market at affordable rent levels.

Dan Seiver, Reilly Financial Advisors

Dan Seiver


Answer: NO

Renters will pay more, landlords will receive more. The real net gain for San Diego will come if rising rents encourage more building of both apartments and single-family homes. This long-term supply response could increase housing availability and even make housing more affordable, depending on local policy. What we need to avoid is an unsustainable bubble. Been there, done that.

Chris Van Gorder, Scripps Health

Chris Van Gorder

Answer: YES


While rising rents may be good for landlords and developers, high housing costs are not generally helpful to the overall economy and can actually force businesses to relocate for both cost and workforce reasons. Also, with rents rising faster than wages, workers have less income available to spend within the community, which adversely affects both San Diego businesses and the workers that they employ.