San Diego has continued to show progress in reaching our Inclusive Growth goals with 2024 median household income experiencing a 29 percent increase since 2019. Despite promising recent growth in annual earnings across the county, San Diego remains one of the most expensive metros in the U.S. By the end of 2024, households needed an income exceeding $235,000 to afford the median-priced home, a threshold that, combined with elevated interest rates, places homeownership further out of reach for most San Diegans.
On average, homeowners faced housing costs of $4,748 per month in 2024, 55.5 percent higher than 2019 costs. Because household income growth has failed to keep pace with the cost of living, the gap between local housing costs and incomes continues to widen despite home prices stabilizing.
Renters face similar pressures. Average rent prices reached $4,039 in 2024, increasing by 8.3 percent over a year and 38 percent over five years. As household income struggles to catch up to increasing prices, 55 percent of renters remain cost-burdened, spending more than 30 percent of their income on rent.
Progress toward the goal
By the end of the decade, EDC estimated the region would need to add 75,000 newly thriving households. To be considered ‘thriving’ in 2024, a renter-occupied household needs at least $84,816 in household income per year, while a homeowner-occupied household needs $139,872 per year.
As of 2024, San Diego has added 38,157 newly thriving households since tracking began—a decrease from 2023 levels. The decline reflects eroding household purchasing power amid continued price pressures on essential goods including housing, groceries, and energy.
Addressing the supply challenge
To increase housing supply, local jurisdictions have made notable progress in streamlining permitting processes. Nearly 15,000 housing permits were approved in 2024, demonstrating continued momentum despite a slight decrease from 2023. However, the number of permits for moderate income housing dropped by 18.8 percent, highlighting the persistent challenge of the “missing middle” and insufficient affordable housing production. Furthermore, permits for low and very low income households dropped 47.4 percent compared to 2023.
Accessory Dwelling Units (ADUs) represented nearly 27 percent of all permits approved in 2024—up from 22 percent in 2023—and 66 percent of all permits approved at moderate level pricing. However, those priced above moderate continue to make up most of ADU permits. While ADUs offer an opportunity to increase housing stock in existing single-family home lots, they’re unlikely to solve the region’s housing crises alone.
Developers cite several obstacles hampering housing production. The multifamily development market has become oversaturated, reducing incentives for new entrants. Current policies favor small units that do little to address the scale of San Diego’s housing needs. Rising construction costs, coupled with high insurance premiums and litigation risks, have the power to prevent projects from ever breaking ground.
At a broader level, California continues to experience a decline in construction employment, with a 1.9 percent annual decrease in 2024. This could be a potential contributing factor to slowed construction in coming years. This is especially relevant in states like California where the construction workforce is particularly reliant on immigrant workers. In fact, 40 percent of the construction workforce is comprised of foreign-born labor, potentially affecting construction-related labor under the current immigration enforcement landscape.
Extended timelines from permitting to groundbreaking further diminish project viability. Addressing these barriers will require better incentives for risk-taking and access to more flexible financing options.
Creative solutions for persistent challenges
Recent announcements signal significant office space vacancies in downtown San Diego. Major real estate firms including the Irvine Co. have been divesting San Diego office towers since 2024, reflecting broader shifts in the commercial real estate market. This challenge presents an opportunity.
Converting vacant office space into housing could revitalize areas where commercial properties no longer contribute meaningfully to the local economy. However, conversion costs can be prohibitively high. In many cases, demolishing outdated office buildings to construct multifamily housing may prove more economically feasible.
Similarly, conversions of single-family home lots into multiple single-family lots could have significant impact on housing affordability. According to LISC’s single family lot size reduction analysis, allowing multiple townhomes on one single family lot could lower home prices by 42 percent. Additionally, if 1.4 percent of the City of San Diego’s current single family lots were allowed to build multiple townhomes on one single family lot, the amount of new property taxes generated would be approximately $450 million each year, just for the County of San Diego. These innovative efforts require streamlined permitting, supportive re-zoning, and infrastructure assessment from local governments.
Identifying which vacant office properties are suited for conversion—or demolition and redevelopment—should be the first step. Addressing San Diego’s supply-constrained market will require strong public-private collaboration and regional strategies to explore innovative solutions at the scale needed to meet the region’s housing demands.
In February 2026, EDC’s Thriving Households Roundtable provided an opportunity to discuss employer-led solutions to these pressing challenges and to hear about innovative initiatives from local leaders such as LISC, cREate Development, and Center for Housing Policy and Design.
Join the movement. Endorse our Inclusive Growth goals.
Bree Burris
Sr. Director, Communications & Community Engagement