The incredible shrinking apartment: San Diego’s average unit now 827 square feet

San Diego’s average new apartment size is now 827 square feet, a 16% reduction over a decade, said a new study from RentCafe. It is the eighth largest drop in the nation out of 100 cities.

America’s Finest City has limited space for residential building, making the reduction a function of reality. However, the average national size for a newly built apartment — 908 square feet — increased by 4 square feet over the past year.

RentCafe said national data showed studios, one-bedrooms and two-bedrooms were reducing in size from 2021 to 2023, but developers have recently begun increasing sizes. While experts say that is largely a function of responding to renter demands, the most space-constrained markets aren’t necessarily following the national trend.

Nathan Moeder, a San Diego housing analyst with London Moeder Advisors, said the high cost of labor, construction and land in California make it difficult to build larger. He said rent per square foot has a better return for studios and one-bedrooms, than larger two- or three-bedrooms.

“It forces a developer to squeeze down unit size, as small as they can go, while still being profitable,” Moeder said.

He argued California’s average apartment size will go against the national trend because of statewide laws that require plans for new housing, called the Housing Element. Those requirements mainly factor in the number of units, not types. Moeder has written and spoken out against state housing laws for years, arguing they should look at the type of housing — not just how many units are being built.

In 2016, The San Diego Union-Tribune studied average apartment sizes and found they were getting bigger. At the time, one of the reasons given was, coming out of the Great Recession, it was still difficult for potential homeowners to afford buying a place so they needed to continue renting. Developers responded by increasing the number of two-bedroom units.

Moeder said the same phenomenon is happening now at the national level, with higher mortgage rates and still-high home prices. It may be more cost effective to rent in the short term or easier to not fight it out in bidding wars during a national housing shortage, even if you have the money. Between 2018 and 2022, the share of households with annual incomes of more than $750,000 that rented rose to 10.5%, according to census data crunched by the University of Minnesota and analyzed by The Wall Street Journal.

At the same time, college graduates, those who can’t afford a home or large apartment, or people relocating here because of a job also look to the small-apartment market. That may be true, Moeder said, but it’s also possible we’re building too many tiny apartments when the economic reality is San Diego families may have no choice but to jam into studios or one-bedroom units.

While San Diego’s apartment construction has continued at a strong pace, for-sale residential construction has decreased. There were 50 active for-sale residential developments in March across the county, a mix of single-family homes, townhouses and condos, said market researcher Zonda. That’s compared to more than 143 at the same time in 2019, and is the lowest number of developments in records going back a decade.

The RentCafe study looked at city data (not county or metro area) from research firm Yardi Matrix between 2015 and February 2024. San Diego’s apartment size might be shrinking at one of the fastest paces, but it doesn’t have the smallest new units.

Seattle topped the list for the smallest new apartments at an average 649 square feet. It was followed by Portland (668 square feet), Queens (702 square feet), Brooklyn (708 square feet) and San Francisco (716 square feet). San Diego’s 827-square-feet new apartments ranked No. 76 on the smallest list out of the 100 cities.

Two Florida cities topped the list for biggest new apartments. The average size in Tallahassee was 1,350 square feet and in Gainesville, 1,222 square feet.

One of the buildings with the smallest new apartments in San Diego is the Sasan Lofts complex, which opened in 2024, on the edge of the Mission Hills and Hillcrest neighborhoods. The building has 54 studios, averaging 300 square feet, said real estate tracker CoStar, with an average monthly rent of $2,105. The building recently won an architecture award at San Diego Architectural Foundation’s Orchids and Onions event.