GlobeSt.com: How is apartment-development expansion likely to happen in San Diego?

Miramontes: There are pockets of development around San Diego. You're naturally going to see development where this is open land, but because San Diego is land constrained to the South with Mexico, to the north with Camp Pendleton, to the west with the Pacific Ocean and to the east with the mountains, you will see a lot of development in infill locations here. There are areas where gentrification can occur as well, and many structures that are not being utilized to their highest and best use can be redeveloped. There are also a few pockets of development in the South Bay, in the Otay Ranch area—there's booming development down there on the multifamily side—and also in the East Village of Downtown. We will see continued development in the Mission Valley area, and there may be a whole lot of development if Qualcomm Stadium is no longer there. Also, in North County, along the I-15 corridor, there are many units coming down the pike. There's mixed-use development specifically in Pacific Highlands Ranch, and Vista has been a hotbed of development—Vista is not the Vista we all remember; it's a very dynamic and growing economy. because of that there is a lot of commercial development going on, including multifamily.

GlobeSt.com: Which submarkets here are likely to feel the in-migration from the city into the suburbs in the multifamily sector?

Miramontes: In San Diego, I would say Mission Valley, UTC, Carmel Valley, Carlsbad and Vista will see multifamily growth. But this growth is small compared to the overall need for multifamily housing in the county.

GlobeSt.com: Is the affordability issue being addressed? If so, how?

Miramontes: I think the affordability issue is being addressed, but probably not to the extent it needs to be. If local communities worked side by side with developers more often, I think each party can get what they're looking for. Developers would be more included to build affordable units instead of paying in-lieu fees, and if the processing of their developments could be accelerated, it could save them money and put them into projects that have affordable elements. They have to sit at the same table very early in the process. It's difficult for builders to build affordable housing or build anywhere in the city. Time and money spent on entitlement takes away from dollars they could send on more affordable units in market-rate projects.

GlobeSt.com: What else should our readers know about the San Diego multifamily market?

Miramontes: This is a highly sought-after market, with tight supply and high demand, and this continues to be the case. We have a dynamic market that draws institutional and private investors.

SAN DIEGO—If the entitlement process were more streamlined, developers would have more resources to spend on building affordable multifamily units, JLL's EVP Darcy Miramontes tells GlobeSt.com. The multifamily sector here, however, is not suffering. A recent JLL report revealed that San Diego's multifamily trade volume in 2015 was $2.61 billion, according to PPR, outperforming the historical average of $1.75 billion.

The future for this sector also looks bright: JLL's report revealed that the Trolley expansion in the next five years will connect Downtown to UTC via the UC San Diego Blue Line, expanding opportunities for transit-oriented developments. The homeownership rate here is at a historical low of 50.7%, nearly a 50/50 split between owning and renting, and the National Association of Realtors ranked San Diego the second most-expensive for-sale home market out of the 25 largest US metro areas—behind only San Francisco.

There are barriers-to-entry for renters in this market, though: JLL reports that Zillow ranked San Diego the fourth most-expensive rental market out of the 25 largest US metro areas. But the employment market is keeping pace, with San Diego adding 27,000 jobs over the past 12 months, bring unemployment down 80 bps.

GlobeSt.com spoke exclusively with Miramontes about apartment development here, the affordability issue and the suburban submarkets here that are likely to see multifamily growth.

GlobeSt.com: How is apartment-development expansion likely to happen in San Diego?

Miramontes: There are pockets of development around San Diego. You're naturally going to see development where this is open land, but because San Diego is land constrained to the South with Mexico, to the north with Camp Pendleton, to the west with the Pacific Ocean and to the east with the mountains, you will see a lot of development in infill locations here. There are areas where gentrification can occur as well, and many structures that are not being utilized to their highest and best use can be redeveloped. There are also a few pockets of development in the South Bay, in the Otay Ranch area—there's booming development down there on the multifamily side—and also in the East Village of Downtown. We will see continued development in the Mission Valley area, and there may be a whole lot of development if Qualcomm Stadium is no longer there. Also, in North County, along the I-15 corridor, there are many units coming down the pike. There's mixed-use development specifically in Pacific Highlands Ranch, and Vista has been a hotbed of development—Vista is not the Vista we all remember; it's a very dynamic and growing economy. because of that there is a lot of commercial development going on, including multifamily.

GlobeSt.com: Which submarkets here are likely to feel the in-migration from the city into the suburbs in the multifamily sector?

Miramontes: In San Diego, I would say Mission Valley, UTC, Carmel Valley, Carlsbad and Vista will see multifamily growth. But this growth is small compared to the overall need for multifamily housing in the county.

GlobeSt.com: Is the affordability issue being addressed? If so, how?

Miramontes: I think the affordability issue is being addressed, but probably not to the extent it needs to be. If local communities worked side by side with developers more often, I think each party can get what they're looking for. Developers would be more included to build affordable units instead of paying in-lieu fees, and if the processing of their developments could be accelerated, it could save them money and put them into projects that have affordable elements. They have to sit at the same table very early in the process. It's difficult for builders to build affordable housing or build anywhere in the city. Time and money spent on entitlement takes away from dollars they could send on more affordable units in market-rate projects.

GlobeSt.com: What else should our readers know about the San Diego multifamily market?

Miramontes: This is a highly sought-after market, with tight supply and high demand, and this continues to be the case. We have a dynamic market that draws institutional and private investors.