San Diego 101: Why is it so hard to build housing? | Geography, Demographics, Red Tape, Cost and Politics Block Critical Home Construction

San Diego Housing Crisis: 

Executive Summary

San Diego's housing crisis represents a complex convergence of geographic limitations, demographic growth pressures, and entrenched political resistance that continues to prevent the construction of desperately needed homes. Our analysis reveals that despite modest recent reforms, the region remains fundamentally constrained by century-old zoning laws, powerful NIMBY opposition, and unique geographic barriers that limit development options to building "east or up."

Bottom Line: More than three-quarters of San Diego's residential land remains zoned exclusively for single-family homes, while only 13 percent allows multi-family housing, creating an artificial scarcity that drives prices beyond reach for working families.

Geographic Reality: Hemmed In on All Sides

Unlike sprawling cities such as Phoenix, San Diego cannot simply build outward due to Mexico to the south, the Pacific Ocean to the west, and Camp Pendleton to the north. This geographic constraint forces development into two problematic directions: eastward expansion into fire-prone areas with longer commutes, or upward densification that faces fierce local resistance.

The city's unique topography further complicates development. Urban neighborhoods frequently "back up to canyons and wetlands," making the definition of suitable "infill housing" locations particularly challenging for planners and developers.

Demographic Pressures: Growth Without Housing

Population Dynamics

San Diego's metropolitan area grew by 12,909 people in 2024 to reach 3.29 million residents, marking the strongest population growth since the pandemic. However, this growth pattern reveals concerning trends:

• International migration brought 24,226 new residents, while domestic migration showed a net loss of 23,934 people
• Working families are being forced out due to high housing costs, while new immigrants typically fill entry-level positions
• The region's population remains below its 2020 peak of 3.3 million

Economic Mismatch

The fundamental problem stems from a jobs-housing imbalance that has persisted for decades. The region consistently adds more employment opportunities than housing units, creating upward pressure on prices. San Diego's median household income of $104,321 and per capita income of $62,546 cannot keep pace with housing costs in many neighborhoods.

Political Barriers: The NIMBY Factor

Zoning Ossification

San Diego's zoning laws have barely changed since the first ordinance passed in 1923, which functioned as "a thinly veiled mechanism for racial segregation". This historical legacy continues to shape development patterns, strongly favoring single-family homes over apartments and townhouses.

Recent controversies highlight ongoing political tensions. Southeast San Diego residents successfully campaigned to remove a discriminatory zoning footnote that allowed higher density development only in their neighborhoods, which they viewed as unfairly targeting communities with higher proportions of Black and Latino residents.

NIMBY Resistance Patterns

Opposition to new housing projects follows predictable patterns across the county. El Cajon permitted fewer than 10 new homes per 1,000 residents—the lowest rate in San Diego County—with Mayor Bill Wells stating that neighborhoods with larger lots "shouldn't be forced into building denser housing".

Conversely, Chula Vista permitted 38 new units per 1,000 people, the highest rate countywide, due to available open space and diverse housing types. This stark contrast demonstrates how local political will directly impacts housing production.

Construction Challenges: Costs and Regulations

Escalating Construction Expenses

Multiple factors have dramatically increased building costs:

• Supply chain disruptions and labor shortages
• High interest rates limiting development financing
• New apartments charging "well above average, with some hitting $3,000 a month" due to high construction costs

Regulatory Complexity

Building regulations, while necessary for safety and community planning, have become impediments to affordable housing production. Specific challenges include:

• Parking minimum requirements adding tens of thousands to project costs
• Double stairwell requirements that increase expenses without improving safety
• Lengthy permitting processes subject to legal challenges

Recent Reform Efforts: Mixed Progress

CEQA Overhaul

California enacted sweeping changes to the California Environmental Quality Act (CEQA) in 2025, exempting urban "infill" housing projects under 20 acres from environmental review requirements. This represents the most significant reform to the 55-year-old law.

Local Innovations

San Diego has emerged as a statewide model for streamlined permitting, with one expert noting that "if the entire state functioned like San Diego, the committee wouldn't be necessary". The city issued permits for roughly 10,000 new homes in 2023, double its previous five-year average.

ADU Controversies

Large-scale accessory dwelling unit (ADU) developments have sparked neighborhood backlash, with some projects adding 126 units across small lots. While these projects help address housing shortages, they've prompted calls for policy rollbacks.

Market Response: Limited Relief

New Supply Projections

Approximately 4,000 new apartments are set to open throughout San Diego County in 2025, matching recent years' production levels. However, most target high-income renters rather than addressing affordability concerns.

Geographic Distribution

Downtown, Bankers Hill, Hillcrest, and North Park have seen the highest concentrations of new housing, following reforms aimed at building in walkable neighborhoods. Meanwhile, major job centers like Sorrento Valley and UTC have seen minimal residential development.

Recommendations for Consumers and Policymakers

For Prospective Homebuyers:

• Consider emerging neighborhoods with planned transit connections
• Explore ADU opportunities for additional income or family housing
• Monitor CEQA reform impacts on project timelines and costs

For Policymakers:

• Accelerate zoning reforms to allow multifamily housing in single-family zones
• Implement stronger tenant protections to prevent displacement
• Expand direct rental assistance programs as a cost-effective alternative to street services

For Communities:

• Engage constructively in planning processes rather than blanket opposition
• Support transit-oriented development to reduce car dependency
• Advocate for mixed-income developments rather than economic segregation

Conclusion

San Diego's housing crisis reflects decades of policy choices that prioritized maintaining neighborhood character over housing affordability. While recent reforms show promise, fundamental changes to zoning laws and community attitudes remain essential for meaningful progress.

The region's geographic constraints make sprawling development environmentally and economically unsustainable. Success will require embracing denser, more diverse housing types throughout the county—a cultural and political shift that extends far beyond technical policy adjustments.

Without substantial increases in housing production, San Diego risks becoming increasingly unaffordable for working families, potentially undermining the economic diversity that has historically fueled the region's growth.

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Sources

1. Voice of San Diego. "San Diego 101: Why Is It so Hard to Build Housing?" July 30, 2025. https://voiceofsandiego.org/2025/07/30/san-diego-101-why-is-it-so-hard-to-build-housing/
2. KPBS Public Media. "San Diego 101: Why is it so hard to build housing?" July 31, 2025. https://www.kpbs.org/news/economy/2025/07/31/san-diego-101-why-is-it-so-hard-to-build-housing
3. Planetizen News. "Which San Diego County Cities Are Building New Housing?" July 29, 2025. https://www.planetizen.com/news/2025/07/135680-which-san-diego-county-cities-are-building-new-housing
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5. The San Diego Union-Tribune. "Affordable housing savior, or neighborhood destroyer? Meet the developer behind San Diego's biggest ADU projects." July 18, 2025. https://www.sandiegouniontribune.com/2025/07/18/affordable-housing-savior-or-neighborhood-destroyer-meet-the-developer-behind-san-diegos-biggest-adu-projects/
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10. OB Rag. "4,000 Apartments Coming to San Diego County in 2025 — But They're Not Helping the 'Affordable Housing' Crisis." April 3, 2025. https://obrag.org/2025/04/4000-apartments-coming-to-san-diego-county-in-2025-but-theyre-not-helping-the-affordable-housing-crisis/
11. The San Diego Union-Tribune. "Is it good for San Diego's population growth to be fueled largely by immigration?" March 28, 2025. https://www.sandiegouniontribune.com/2025/03/28/is-it-good-for-san-diegos-population-growth-to-be-fueled-largely-by-immigration/
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14. The San Diego Union-Tribune. "Did Gov. Gavin Newsom go too far with CEQA reform?" July 10, 2025. https://www.sandiegouniontribune.com/2025/07/10/did-gov-gavin-newsom-go-too-far-with-ceqa-reform/
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17. Axios San Diego. "New push to exempt urban housing from CEQA reignites statewide reform battle." March 31, 2025. https://www.axios.com/local/san-diego/2025/03/31/new-push-exempt-urban-housing-ceqa-reignites-statewide-reform-battle

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San Diego 101: Why is it so hard to build housing? | KPBS Public Media