Costa Mesa, a vibrant city in the heart of Orange County, California, is known for its cultural diversity, thriving arts scene, and proximity to some of Southern California’s most iconic beaches. With a population of approximately 107,245 and a bustling economy driven by retail, professional services, and healthcare, Costa Mesa has become a desirable place to live, work, and play. However, its economic landscape has a profound impact on the local rental market, shaping everything from rental prices to housing availability. In this blog post, we’ll explore how Costa Mesa’s economy influences the rental market, delving into key economic drivers, demographic trends, and their ripple effects on renters and landlords alike.
The Economic Backbone of Costa Mesa
Costa Mesa’s economy is diverse and dynamic, with several key sectors underpinning its financial health. Retail trade, bolstered by the presence of South Coast Plaza—one of the largest shopping centers in the United States—employs a significant portion of the city’s workforce. Professional, scientific, and technical services, along with healthcare and social assistance, also play major roles, reflecting a workforce engaged in both specialized and community-oriented roles. This economic diversity creates a stable job market, attracting professionals, families, and young adults to the area.
The city’s median household income, around $103,891, is on the mid to lower end compared to other Orange County cities, yet it supports a high employment rate. This balance suggests that while Costa Mesa may not have the highest earners in the region, its job opportunities are plentiful and varied. However, the cost of living in Costa Mesa is approximately 53% higher than the national average, driven largely by housing costs, which directly impacts the rental market.
Rising Rental Prices: A Reflection of Economic Strength
One of the most noticeable effects of Costa Mesa’s economy on the rental market is the high cost of renting. As of early 2025, the average rent for an apartment in Costa Mesa hovers around $2,650 per month, with studio apartments starting at approximately $2,000 and two-bedroom units reaching upwards of $3,300. Single-family homes for rent can command monthly costs as high as $5,500. These figures place Costa Mesa’s rental market 60% above the national average, making it one of the more expensive cities in the U.S. for renters.
This price surge is closely tied to the city’s economic vitality. A strong job market attracts new residents, increasing demand for housing. With 60% of Costa Mesa’s housing units occupied by renters, the competition for available rentals is fierce. The low vacancy rate, currently around 3.4%, further exacerbates this demand, giving landlords the upper hand to set higher prices. For example, neighborhoods like Westside Costa Mesa and Downtown offer relatively affordable one-bedroom apartments at around $2,200, while areas like North Costa Mesa District see averages closer to $3,500 due to their proximity to desirable amenities.
The economic influx from retail and tourism, particularly around South Coast Plaza, also drives up property values, which in turn influences rental costs. As commercial areas thrive, nearby residential zones become more desirable, pushing landlords to capitalize on the demand by raising rents. Additionally, the city’s high population density—approximately 6,790 residents per square mile—creates a sense of scarcity in the housing market, further inflating prices.
Seasonal Economic Fluctuations and Rental Demand
Costa Mesa’s economy experiences seasonal fluctuations that ripple into the rental market. Spring and summer months, particularly March through August, see heightened activity in both real estate and rentals. Families often move during this period to settle before the school year, and tourism peaks, bringing temporary workers and visitors who seek short-term rentals. This seasonal demand pushes average rents higher, with summer months seeing averages around $2,700 for a one-bedroom apartment.
In contrast, winter months bring a slight slowdown. With fewer people moving and less competition for rentals, landlords may offer more negotiable terms or maintain stable prices to attract tenants. However, the overall high demand in Costa Mesa means that significant price drops are rare, even in the off-season. This pattern reflects the city’s consistent economic activity, which sustains rental demand year-round, albeit with slight variations.
The Impact of New Developments and Infrastructure
Costa Mesa’s economy is also shaped by ongoing infrastructure projects and new developments, which have a direct bearing on the rental market. The completion of multifamily projects like the 400-unit Halcyon House in 2023 contributed to a temporary spike in vacancy rates, but strong absorption quickly stabilized the market. These developments add to the rental inventory, but they often cater to higher-income renters, with modern amenities that justify premium prices.
New commercial developments, such as expansions around South Coast Plaza or improvements in transportation infrastructure, enhance the city’s appeal, drawing more residents and increasing rental demand. However, these projects can also lead to gentrification in certain neighborhoods, pushing out lower-income renters as property values rise. For instance, areas like Eastside Costa Mesa, once relatively affordable, now see one-bedroom rents averaging $2,650, reflecting the economic uplift from nearby commercial growth.
Tenant Demographics and Economic Pressures
The economic profile of Costa Mesa’s renters further illustrates how the local economy shapes the rental market. Approximately 40% of renters hold bachelor’s degrees or higher, indicating a professional workforce that values proximity to job centers in Orange County. The largest renter demographic falls in the 25–34 age group (29%), followed by those aged 35–44 (19%), suggesting a young, career-driven population. These renters are often willing to pay a premium for convenience, amenities, and access to Costa Mesa’s vibrant lifestyle, which includes cultural events, dining, and recreational opportunities.
However, the high cost of living creates challenges for many renters. With 47% of Costa Mesa households classified as lower-income, and 29% qualifying for very low or extremely low-income housing, affordability is a pressing issue. The city’s economic strength, while beneficial for job creation, doesn’t always translate to accessible housing. Renters often face “overpayment,” spending more than 30% of their income on rent, which strains household budgets and limits financial mobility.
Policy Responses to Economic and Rental Challenges
Costa Mesa’s city government has recognized the tension between economic growth and housing affordability, implementing policies to address the rental market’s challenges. In August 2024, the City Council approved an Affordable Housing Ordinance aimed at increasing the supply of affordable units. This ordinance encourages developers to include lower-cost rentals in new projects or pay in-lieu fees to fund affordable housing initiatives. Such policies reflect an acknowledgment that the city’s economic prosperity must be balanced with housing access for all income levels.
Additionally, new eviction laws introduced in 2024 provide greater protections for tenants, such as requiring relocation assistance for no-fault evictions. While these measures aim to stabilize renters’ lives, they may have unintended consequences for the rental market. Some landlords argue that stricter regulations could deter investment in rental properties, potentially reducing supply and driving rents higher. Others believe these policies will foster a more equitable market, ensuring that economic growth benefits a broader segment of the population.
The Ripple Effect on Landlords and Investors
Costa Mesa’s economy also influences landlords and real estate investors. The high demand and low vacancy rates make the city an attractive market for rental property investments, with steady returns driven by consistent tenant interest. However, the high cost of property acquisition—median home prices reached $1.4 million in early 2025—means that only well-capitalized investors can enter the market. Rising property taxes and maintenance costs, tied to the city’s elevated cost of living, further challenge smaller landlords, who may pass these expenses onto tenants through higher rents.
On the flip side, the economic stability of Costa Mesa provides landlords with confidence in long-term rental income. The city’s competitive housing market, with homes selling in an average of 41 days, suggests that property values will continue to appreciate, benefiting investors who hold rental units. However, economic uncertainties, such as potential interest rate hikes or shifts in employment sectors, could temper this optimism, prompting landlords to adopt cautious pricing strategies.
Looking Ahead: The Future of Costa Mesa’s Rental Market
As Costa Mesa’s economy continues to evolve, its rental market will likely remain a reflection of the city’s broader financial health. The influx of professionals, driven by job opportunities in retail, healthcare, and tech, will sustain demand for rentals, keeping prices elevated. However, efforts to address affordability, such as the Affordable Housing Ordinance, may gradually diversify the rental landscape, offering options for lower-income residents.
Emerging trends, like the rise of remote work, could also reshape the market. As professionals seek flexible living arrangements, Costa Mesa’s appeal as a vibrant, well-connected city may attract more renters willing to pay a premium for lifestyle benefits. Conversely, if economic pressures—such as inflation or reduced consumer spending—impact retail and tourism, the rental market could see softened demand, giving renters more negotiating power.
Conclusion
Costa Mesa’s economy is a double-edged sword for the rental market. On one hand, its robust job market, cultural vibrancy, and strategic location drive demand, pushing rental prices to some of the highest in the nation. On the other hand, the high cost of living and limited affordable housing create challenges for renters, particularly those with lower incomes. Policies aimed at balancing growth with accessibility, combined with seasonal and demographic trends, will continue to shape the market’s trajectory.
For renters, navigating Costa Mesa’s rental landscape requires careful budgeting and an understanding of neighborhood dynamics. For landlords and investors, the city offers opportunities for strong returns, tempered by the realities of high acquisition costs and regulatory changes. Ultimately, Costa Mesa’s rental market is a microcosm of its economic vitality—a complex interplay of opportunity, competition, and aspiration in one of California’s most dynamic cities.
