By Phillip Molnar | 4:36 p.m.June 9, 2016 | Updated, 8:21 p.m. | June 10, 2016
A white tea fragrance fills the air in the lobby of Broadstone Balboa Park.
The low light from antique light bulbs illuminates a rolling “railroad” library, fine handmade furniture, various white flowers displayed throughout and elevators adorned by trestles built to resemble San Diego’s suspension bridges.
At night, residents sip beer on Broadstone’s rooftop lounge in Bankers Hill, sitting around a gas fireplace while music plays through a built-in system, with views as far as Cabrillo National Monument.
The apartment complex is just one of many high-end buildings competing for renters in San Diego County while charging roughly $3,000 a month in rent or more. And given demand, experts predict more high-end units are coming as housing costs continue to rise.
Rent hit an average $1,618 a month in March, sending high-end units into eye-popping territory. But the reasons people decide to rent these luxurious units are varied and not always because they have a hefty income.
Mary Ann Sandersfeld, 72, was the 10th person to move into Broadstone last year. She has a two bedroom, two bath apartment with balcony views of Fifth Avenue and Balboa Park.
She has had a long successful career, spending years working in the medical profession before going back to school and starting her own financial services business (which she eventually sold).
After a knee replacement and issues with her other knee, she needed a place that didn’t require a lot of stairs and was easy to get around. Sandersfeld knew she did not want to deal with the hassle of a condo, from fees to association disputes, or burden her family with selling a home after she died.
So, she sold her three-story townhouse in South Park for $468,000 and moved to Bankers Hill.
“This is what I was looking for,” she said Wednesday in her apartment. “It’s close to my doctor’s office, close to (Balboa) Park and close to the Old Globe.”
Broadstone is the fourth-most expensive apartment complex in San Diego County with studios from $1,799 to $3,200, one bedrooms from $2,500 to $3,600, and two bedrooms from $3,549 to $6,400.
Russ Valone, president of MarketPointe Realty Advisors, said millennials are a target audience for high-end rentals.
“The burden of (student) debt is a big one,” he said of some millennial renters. “They don’t have the down payment necessary to get into (buying) a home, but they have the income to live in an upscale community, so they opt for that.”
Additionally, Valone said some millennials might make enough money to get into a house or condo but they aren’t eager to get a mortgage because they might move.
He said that paying for the project (land, building and regulation costs), and a lack of space for apartments, means builders are loading up on amenities and community spaces.
“You’re trying to command 40 to 50 percent more in rent than your 15 or 20-year-old housing stock within the area that you’re at,” Valone said. “So, you have to add more to the apartment to make it more appealing.”
Of the top 10 most expensive apartment complexes, two are in Bankers Hill, two in Little Italy and two in Carlsbad, according to MarketPointe Realty Advisors. The others are in East Village, Grantville, Torrey Hills and Carmel Valley.
All were built in the last eight years, with the exception being Signature Point in Carmel Valley in 2002.
The most expensive complex is Bluwater Crossing in Carlsbad. It was built in 2009, has 66 units and is owned by a limited liability company managed by Pacifica Real Estate Services. Fifteen of the units are townhomes and the rest are mixed-use live and work lofts.
Townhomes range from $2,985 to $3,250 a month at Bluwater. The lofts, which have two-floor apartments and a bottom floor that can be used as a store front or office space, range from $3,835 to $4,675 a month.
Nic Biancamano, acquisition director for Pacifica Enterprises, said the complex was designed to compress the work-live movement in one small area.
Renter Glenn Berry runs his business, Design for Science, on the first floor of his unit and lives with his wife and two 9-year-old miniature labradoodles, Jack and Beatrix, on the top floors.
He said he is able to write off the whole first floor of his apartment as a business expense so his rent so it more like $2,500 a month.
“If I were to go out there and find a house for $2,500 a month, it’ll be a dump or too small,” Berry said.
Because some renters use first-floor units as store front, the complex feels a bit like an outdoor mall. It boasts a skin care business, jeweler, finance company, audio video business, fitness studio, photography studio, cookie store and dance shoe store.
Salon Studio Ciseaux owner Tiffany Levesque said she doesn’t use living upstairs as an excuse to slack off.
“I’m a consummate professional,” she said. “I don’t go up there until 7:30 at night.”
What it means for renters
San Diego renters may be tempted to panic at the prices of high-end apartments but experts say it will take the pressure off the competitive rental market, which has seen rents increase nearly 3 percent year-over-year and vacancy plummet to 2.46 percent.
Debbie Ruane, senior vice president of the San Diego Housing Commission, said the more apartments that are available to rent, the better — even if they are the high-end downtown variety.
“We think that any type of supply contribution is good right now,” she said. “We’re happy to see cranes in the sky and it is important to add housing where the work is . . . downtown is where the services are and the transit is. It’s refreshing to see construction moving again.”
The pressure to get the most money out of a development will continue to push high-end construction, said Robert Vallera, senior vice president of Voit Real Estate Services.
He said a site for apartment construction in University Town Center that opened two months ago has already received 27 offers.
While most experts typically agree more construction of any apartments is a good thing, Lynn Reaser, chief economist for Point Loma Nazarene University, said the housing market is mostly focused on only two categories because of pressure to build high-end and money being allocated for subsidized affordable housing.
Gov. Jerry Brown introduced a plan Thursday to allocate $400 million in low-income housing subsidies in the next fiscal year. But, lawmakers still need to approve the plan.
“The middle part is what we need, and what we’re not seeing,” Reaser said.