Where to Buy a Home in the City of San Diego

By Sean Canning

San Diego has been called the City of Neighborhoods. As a practicing architect in San Diego, I look at the future of these neighborhoods from a modern urban planning perspective.

Which is San Diego’s next up-and-coming neighborhood? Where should you buy property? Where should you build your dream home? Which neighborhood is right for you?

Read on to see the results of this analysis.

Key Takeaways

• San Diego is known as the City of Neighborhoods, each with its unique characteristics and potential for development.

• Property values in San Diego are generally higher in the North/West regions and lower in the East/Southeast regions.

• The California Coastal Zone presents additional permitting challenges and costs for developments.

• Neighborhoods like Golden Hill, Sherman Heights, Grant Hill, and Logan Heights offer more affordable property options and are prime for development.

• Future development in San Diego is likely to expand North or East/Southeast due to permanent natural and man-made boundaries.

Buy land. They're not making it anymore! - Mark Twain

Let’s not tiptoe around it, San Diego is super expensive right now. So the development I’m recommending is a long-term investment.

This speculation considers the next 1-3 decades of ongoing development, including additional density radiating from the downtown core of the City (which I believe is inevitable).

There are so many variables to this equation, but for the purpose of discussion, I’d like to focus on the most basic given concepts: (1) buildable land, (2) property value, and (3) easy access to obtain a regulatory approval for development. The comparison of these specific components of development is a very architectural way of looking at the future of San Diego.

Understanding Neighborhood Development

Location Matters

A 1-mile, 2-mile, and 3-mile diameter from the center of Downtown San Diego. As the population increases, some urban sprawl is inevitable.

One of the first things that must be understood when considering a property for development is the location. This should be done both on a macro-scale and a micro-scale.

Topography is easy to overlook on a flat map but could mean the difference of a hip, walkable community. San Diego has plenty of natural land formations like canyons and cliffs, which divide neighborhoods from each other. Highways also divide the city in a more manmade way.

These obstructions can allow pedestrian passage with a bridge/tunnel, overpass/underpass.

Permanent Boundaries

The waterfront, Balboa Park, and the San Diego Airport are permanent obstructions to development. These will funnel future development North or East and South East.

Major boundaries would be the San Diego Bay, Balboa Park, and the San Diego Airport. All of these are important/historical to the region and will be preserved into the future. Downtown San Diego cannot expand into these areas - it has to expand to the adjacent neighborhoods to the North and to the East to Southeast.

• Little Italy (to the North)

• Bankers Hill (to the North)

• Golden Hill (to the East/Southeast)

• Sherman Heights (to the East/Southeast)

• Grant Hill (to the East/Southeast)

• Logan Heights (to the East/Southeast)

• Barrio Logan (to the East/Southeast)

Once these neighborhoods gain density, the next set of neighborhoods could begin to densify (South Park, North Park, Hillcrest, and Mission Hills).

Property Value Considerations

After location, the next thing any reasonable person would be concerned with is the cost. When comparing the mean listing price (info provided by Trulia.com), it’s obvious that property value increases North towards La Jolla. Conversely, the lowest property value is to the East and Southeast.

There is another component that is often overlooked by home buyers looking to develop their properties: the dreaded Coastal Zone (generally everything West of Route 5). Projects in this area require a complicated Coastal Development Permit, which requires applicants to submit additional documentation and make presentations to the community.

These permits cost thousands of dollars more and can be held up for years - all without a guaranteed outcome. Most developers prefer to mitigate their risk (the tighter the budget, the better to avoid this risk).

Entry-Level Neighborhoods for Development

This narrows the selection down to these ‘entry-level’ neighborhoods:

• Golden Hill (to the East/Southeast)

• Sherman Heights (to the East/Southeast)

• Grant Hill (to the East/Southeast)

• Logan Heights (to the East/Southeast)

Because of the central location of Balboa Park, as population increases downtown has to expand in one of these two directions: to the North or to the East/Southeast which is about twice the size.

Property buyers will have to make a binary decision; expensive development or less expensive development.

The Entire Analysis in a Single GIF

The opportunity is ripe for young home buyers to scoop up some of the most affordable homes in San Diego + then build a 2nd one behind it. Developers will likely target the larger industrial properties in Barrio Logan or along Commercial St. for neighbored mixed-use developments.

If you have any questions about this information, or would like to set up a consultation for architectural design of a property in these neighborhoods please reach out.

Frequently Asked Questions

What Qualifies a Neighborhood as Up-and-Coming in San Diego?

An up-and-coming neighborhood in San Diego is typically characterized by increasing property values, new developments, and an influx of amenities and services. Areas like Golden Hill, Sherman Heights, and Logan Heights are seeing these changes due to their proximity to downtown and relatively affordable property prices.

Why Is the Coastal Zone a Challenge for Development?

The Coastal Zone requires a Coastal Development Permit for new projects, which involves additional documentation, community presentations, and higher costs. This process can take years and has no guaranteed outcome, making it riskier and more expensive for developers.

How Do Permanent Boundaries Affect Development in San Diego?

Permanent boundaries like the San Diego Bay, Balboa Park, and the San Diego Airport limit where downtown can expand. As a result, future development is funneled towards the North and East/Southeast neighborhoods.

What Are the Key Factors to Consider When Buying Property in San Diego?

When buying property in San Diego, consider the location, property value, and regulatory environment. Understanding topography, neighborhood boundaries, and the Coastal Zone can help you make an informed decision.

Why Are Some Neighborhoods in San Diego More Expensive Than Others?

Property values in San Diego vary based on location, proximity to amenities, and development potential. Areas closer to the coast and North of downtown, like La Jolla, have higher property values due to their desirability and limited availability.

What Is the Benefit of Investing in East/Southeast San Diego Neighborhoods?

Investing in East/Southeast neighborhoods like Logan Heights and Sherman Heights offers more affordable property options and significant development potential. These areas are poised for growth as downtown expands.

How Do I Know If My Property Qualifies for Development?

To determine if your property qualifies for development, check its zoning and any specific regulations that apply. Properties in commercial, multi-unit residential, and single-unit residential zones may qualify for ADUs or new dwelling units, but specific rules vary.

Can I Rent Out a Property Developed in These Neighborhoods?

Yes, properties developed in these neighborhoods can typically be rented out. However, ADUs must be rented for long-term use (30+ days), and short-term rentals like Airbnb are not permitted for ADUs.

How Does Topography Affect Property Development in San Diego?

Topography can influence the walkability and accessibility of a neighborhood. Natural land formations like canyons and cliffs, as well as manmade structures like highways, can create physical barriers that impact development.

What Are the Long-Term Benefits of Developing Property in San Diego?

Long-term benefits of developing property in San Diego include potential appreciation in property value, increased rental income, and contributing to the city’s growth. Investing in up-and-coming neighborhoods can offer significant returns over time.

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