4 Rental Market Shifts Every San Diego Landlord Must Understand Right Now
Owning rental property in San Diego has always required sharp attention to market conditions and local regulations. But the landscape heading into 2025 and 2026 looks noticeably different from the landlord-friendly environment many owners got used to just a few years ago. Vacancy rates are climbing, new laws are reshaping your responsibilities, and the cost of a single compliance mistake has never been higher.
Whether you own a single-family home in Chula Vista, a condo near Balboa Park, or a small multifamily building in North Park, the following four shifts deserve your full attention.
Jeff Cairncross Property Management helps local property owners stay ahead of exactly these kinds of changes, so let's break down what is happening and what it actually means for your bottom line.
1. San Diego's Rental Market Is Becoming Increasingly Competitive
Not long ago, San Diego landlords could practically fill a unit overnight. In 2021, the county's multifamily vacancy rate sat at a remarkably tight 2.6%, giving landlords enormous leverage. Fast forward to today, and that number has climbed to somewhere between 5.4% and 5.8%, thanks largely to a flood of new supply. More than 10,000 new rental units are being delivered to the market between 2025 and 2026.
What does this mean for you? Renters now have choices, and they know it. Rather than competing fiercely for your unit, prospective tenants are comparing amenities, pricing, and concessions across multiple listings. Landlords who are not actively marketing their properties, pricing them strategically, and screening tenants efficiently are sitting on vacancies longer than ever.
A professional San Diego property management team conducts precise rental analysis and deploys aggressive, multi-channel marketing to minimize the time your unit sits empty. In a concession-driven market, that expertise is not a luxury. It is a financial necessity.
2. AB 628 Has Raised the Bar on Habitability Standards
California's Assembly Bill 628 has quietly shifted a significant legal burden onto landlords. Under this new law, if your property is marketed as having a kitchen, you are now legally required to provide and maintain a working stove and refrigerator. This applies to any lease that is newly signed, amended, or extended.
Here is where it gets risky: if a tenant's stove or refrigerator breaks and you fail to repair or replace it within 30 days, that tenant gains a powerful legal defense against eviction for non-payment of rent. The old strategy of writing appliance maintenance responsibilities into the lease or providing equipment "as-is" no longer holds up under the expanded definition of habitability.
Keeping up with maintenance calls, coordinating licensed local vendors, and ensuring your units meet current habitability standards requires systems that most independent landlords simply do not have in place. Professional property managers build those systems so that small appliance issues never snowball into costly legal disputes.
3. Day-1 Tenant Protections and the Single-Family Exemption Trap
San Diego's Residential Tenant Protections Ordinance is one of the more consequential local regulations many landlords still do not fully understand. Under this ordinance, tenants are granted "Just Cause" eviction protections starting on Day 1 of their tenancy. If you need to end a lease for a no-fault reason, such as an owner move-in or a major remodel, you are required to pay the tenant a relocation assistance fee equal to roughly two months of rent.
Many owners of single-family homes and condos assume they are automatically exempt. The critical detail: that exemption only applies if your lease contains highly specific, legally prescribed written notices. If you are using an outdated lease template, or if those disclosures are missing or incorrectly worded, you lose the exemption entirely and become subject to the full ordinance.
This is not a technicality that lawyers invent after the fact. It is a straightforward requirement that trips up independent landlords every single year in San Diego. Professional property managers maintain current, legally compliant lease templates and ensure every required disclosure is in place before a tenant ever signs.
4. Getting Your Rent Increases Right Under AB 1482
California's Tenant Protection Act (AB 1482) caps annual rent increases for covered properties at 5% plus the local Consumer Price Index. In San Diego County, that currently translates to a maximum allowable increase of 8.8%, based on a local CPI of 3.8%.
The challenge is that many landlords either miscalculate the allowable increase or misidentify whether their property is even subject to the cap. Generally, properties older than 15 years that do not qualify for specific exemptions fall under AB 1482. Raising rent by even a fraction of a percentage point above the legal limit can expose you to significant financial penalties and tenant lawsuits.
A knowledgeable property management team tracks CPI changes, monitors exemption criteria, and calculates exactly how much you can legally raise rents each year, ensuring you capture every dollar you are entitled to without crossing into legally dangerous territory.
Navigating San Diego's rental market in 2025 and 2026 requires more than good instincts. It requires current regulatory knowledge, reliable maintenance systems, compliant lease documentation, and strategic pricing, all working together at the same time.
Final Thoughts
If you are managing your property on your own, the odds of missing one of these four critical areas are higher than most landlords want to admit. Working with an experienced local team eliminates that risk entirely.
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Jeff Cairncross Property Management
Frequently Asked Questions
Is my single-family rental covered by San Diego's Just Cause eviction rules?
It depends on your lease. Single-family homes and condos can qualify for an exemption, but only if the lease includes specific, legally required written notices. Without those disclosures, the full local ordinance applies.
What happens if I raise rent above the AB 1482 cap?
Exceeding the annual cap, even slightly, can result in financial penalties and tenant-initiated lawsuits. In San Diego County, the current maximum allowable increase is 8.8%.
How does a property manager help during a high-vacancy market?
A professional manager uses rental market analysis, multi-channel property marketing, and tenant screening to minimize vacancy time and attract qualified renters quickly, protecting your cash flow even when competition is high.
Does AB 628 apply to my existing tenants?
AB 628 applies to leases that are newly signed, amended, or extended. If your current lease is amended or renewed, the new appliance maintenance requirements come into effect.
How do I know if my property is covered by AB 1482?
Properties generally covered are those older than 15 years that do not meet specific exemption criteria. A property management professional can assess your specific situation and ensure you stay compliant.
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