Even the sunshine isn’t free in San Diego — it comes with the hefty price tag attached to life in a place with ample sun and waves all year round. The ballooning cost of living in America’s Finest City pushed San Diego up to the ninth most expensive city in the country this year, according to new data.
San Diego has for years been one of the most expensive cities in the U.S. But the city’s surging cost of living, which ticked up this year to be nearly one-and-a-half times the national average, is fueling its rise in the rankings.
San Diego outpriced Boston this year after being ranked as the country’s 10th most expensive city to live in last year, according to The Council for Community and Economic Research’s quarterly Cost of Living Index.
San Diegans are no stranger to shelling out the big bucks to be by the beach. But the typical culprits — the city’s steep housing market and huge commute costs — aren’t the only expenses squeezing San Diegans’ wallets this time around.
If you’ve noticed that eating out, buying groceries and shopping for everyday essentials has recently been taking a heavier toll on your wallet, you wouldn’t be alone.
This year, spiking grocery, restaurant and retail prices have hit San Diego harder than many of the nation’s premier cities — meaning that San Diegans are surrounded by high costs on all sides.
San Diego’s sunshine tax
San Diego may be known for its sunny beaches and laid-back surf culture, but the city is in the midst of an ongoing affordability crisis as residents grapple with one of the most expensive housing markets in the nation and other skyrocketing expenses.
It’s a clash that locals have nicknamed the “sunshine tax,” or the price they pay for life in a sunny paradise.
The Cost of Living Index, which was released at the end of May, calculated San Diego’s sunshine tax based on housing, utilities, transportation, health care, grocery and other retail prices in the city from January to March. Along with San Diego, the index calculated the cost of living in hundreds of other U.S. cities — from New York to Oklahoma City.
Sunshine taxes drove up the cost of living in all of the top 10 most expensive cities, including in San Diego. All 10 cities were concentrated on the Pacific and Atlantic coasts, or — in Honolulu’s case — an island paradise.
To contrast, America’s heartland housed all 10 of the most affordable places in the country.
Manhattan unsurprisingly nabbed the title of the priciest place in the U.S., but California was the state with the most cities in the top 10. In the rankings, San Diego was outpriced by San Jose, San Francisco, and neighboring Orange County and Los Angeles.
High retail prices driving up cost of living as rent dips
Sky-high housing prices and lengthy commutes are typically the costliest expenses squeezing San Diegans’ wallets and worsening the city’s cost of living crisis. This year, however, climbing everyday costs have also hit San Diegans hard — even as inflation has cooled nationwide.
Orange juice now costs a dime more, parmesan cheese a quarter more and ground beef a dollar more on average from last year.
They’re all part of the basket of everyday expenses that San Diegans are continuing to shell out more for than many other Americans in the country’s premier cities.
Grocery prices in San Diego were among the highest in the country this year in the Cost of Living Index, outpricing cities like Los Angeles and Boston.
Prices in San Diego surged along with the rest of the country in January, according to the Bureau of Labor Statistics’ Consumer Price Index, which measures inflation.
But even as prices cooled nationwide by March, San Diego’s CPI continued to rise and hit its highest point in a year. Prices have stayed high in the city ever since.
The increase was mainly driven by rising grocery, restaurant and utilities costs — the new culprits contributing to San Diego’s cost of living crisis this year.
Those high prices are also some of the key factors pushing San Diego up the most expensive cities list, even as data indicates that the eye-popping rent in America’s Finest City has recently trended down.
After months of surging rent, the Cost of Living Index found that average rent for an apartment in San Diego this year dipped down by 0.8% from last year to $3,127 a month.
But even as rent cools, high everyday prices may be offsetting the gains.
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