Aside from the amenities mentioned earlier, bike shops and smaller floor plans with cheaper rents are popular amenities, particularly among the Millennial set, the speakers said. Features like dog washes and dog runs are also important. “It's hard to be competitive if you don't allow pets,” said Mulhern.

With the smaller floor plans, “lots of light and air” are a necessity in the units, and many of the smaller units feature only one door to create a more spacious feel, but only slightly taller ceilings work. Wermers said that closet design is important, particularly in the smaller units. In fact, residents often opt for a smaller unit if the closet is better designed and if the design flows well.

Wong asked if rental rates were keeping up with all of these amenities becoming standard, and Mulhern said San Diego has been “late to come to the party” with rental-rate growth. “Last year, we saw between 5% and 6% same-store rent growth in San Diego” while other markets saw greater growth, but “land costs are skyrocketing.” He predicted that the market will see some migration to suburban-environment development as yields continue to thin.

The panelists said the hottest multifamily markets in San Diego in terms of activity are North Park, Mission Hills and Mission Valley—where the jobs are. Wong asked how much longer the multifamily development cycle here can remain on the upswing, and Cox said 20 to 30 years. “The market has good legs.” Wermers echoed that, adding that “every age group wants to live here,” from Millennials through Baby Boomers and empty-nesters.

Cox said the next trend to hit US cities, which is already becoming popular overseas, will be mixed-use vertical development in tower projects, with office and retail on the ground floor, residential above that and hotel use above that. Caterina said that people are now working in amenitized office environments, so they expect the same in their living environment, and Mulhern said certain projects are being created to appeal to “techies or whoever works nearby.”

Adverse attitudes to density and huge impact fees are entitlement issues with which developers need to contend in San Diego, Mulhern said. His firm is working on a late-'70s-era project in Poway that's getting high rents because “no one is building multifamily in Poway. We need to reduce impact fees.” One Paseo is an example of the reality of infill development opposed by local groups.

The panelists said redevelopment has been successful for them, and while transit-oriented projects are desirable, “we don't have adequate mass transit in San Diego, and these projects put stress on the infrastructure here. We need to upgrade the infrastructure.”

In response to questions from attendees, panelists said some of the other issues they are dealing with include projects with removable walls that can be converted into larger units when Millennials start having families, making product that is long lasting to reduce upgrade costs and creating sustainable projects.