San Diego is facing an unprecedented housing-affordability crisis. While San Diego leaders often champion more housing supply, the city has become increasingly hostile to the housing providers responsible for building, operating and maintaining homes for thousands of local families. In effect, San Diego has become a city that is pro-housing in rhetoric, but increasingly anti-housing provider in practice.
A healthy rental market forms the foundation of the broader housing ecosystem. It serves as the essential first rung on the housing ladder. For young professionals, working families and those aspiring to homeownership, renting provides a critical pathway to stability and opportunity.
A diverse rental market enables mobility and helps ensure that people at every stage of life have access to housing that meets their needs. A healthy housing market depends on a healthy rental market, and efforts to increase housing supply cannot succeed while undermining the very providers responsible for rental housing.
The unintended consequence of overregulating the rental market is that tenants ultimately pay the price. In a city already facing a severe affordability crisis, piling on additional mandates and legal risks does not create more housing opportunities. It constrains them.
As the cost and complexity of providing rental housing increases, tenants face fewer available homes, stricter screening standards and greater competition for the units that remain. Policies intended to protect renters can end up making it harder for them to find and keep an affordable home. This shift has been years in the making.
The city’s 2020 eviction moratorium placed significant financial strain on the rental industry, particularly small property owners who were left maintaining properties and mortgage costs despite not receiving monthly rent from tenants. Since then, the city has layered on additional restrictions, most notably the Residential Tenant Protection Ordinance, which goes beyond state law with costly relocation mandates and rigid just cause requirements.
There has also been a restrictive childcare ordinance, algorithmic pricing ban and residential tenant utility fee ordinance. Additionally, the City Attorney’s Office launched the Housing Protection and Civil Code Compliance Unit, which operates as a proactive enforcement arm.
Many of these changes have also advanced with limited public visibility, creating a cumulative operational burden that is only now becoming clear. Individually, these measures are framed as protections. Collectively, they signal that San Diego is becoming a legally high-risk environment for providing housing.
By stacking local regulations on top of California’s already-stringent laws, the city is increasing legal exposure, driving up costs and discouraging both new development and the continued operation of existing housing.
Legal risks are especially challenging for small, independent housing providers, many of whom lack the resources to navigate an increasingly complicated regulatory environment. As compliance burdens continue to mount, many choose to leave the market altogether, further shrinking the supply of rental housing available to San Diegans.
The City Council is now considering another round of regulations that would further limit the tools housing providers rely on to operate rental housing. Misleadingly titled the “Rental Price Gouging, Fee Exploitation and Cost Transparency Ordinance,” the proposal would ban some fees and cap others for essential and optional services.
Specifically, the proposal bans fees related to habitability, such as pest control and valet trash services. It also caps all optional fees at 5% of the total monthly rent. Optional services like parking, pets and storage must all fit under this cap combined. For example, on a monthly rent of $2,500, the total for all optional fees would need to be less than $125 per month.
Additionally, it weakens incentives for on-time rent payments by restricting late fees and expanding grace periods. Finally, it requires that housing providers accept tenant-provided screening information rather than reports independently verified by third-party screening agencies.
These provisions shift more financial and operational risk onto housing providers while limiting their ability to verify applicant information, promote on-time rent payments and recover legitimate operational costs.
By weakening these fundamental safeguards, the ordinance increases exposure to fraud and nonpayment. Rather than improving affordability, these policies risk pushing it further out of reach. Being truly pro-housing means supporting the entire housing ecosystem, including the providers who build, operate and maintain rental homes. Increasing affordability requires policies that encourage investment, preserve existing housing and expand opportunities for renters.
Housing providers steward the essential first rung on the housing ladder. Undermining their ability to provide rental housing ultimately undermines the entry-level housing that a healthy market depends upon. Until San Diego recognizes the essential role housing providers play in the housing ecosystem, its affordability goals will remain difficult to achieve.
The City Council should think twice before implementing its latest anti-housing provider ordinance.
Woods is vice president of local public affairs for the California Apartment Association.