No matter how you slice it, San Diego is an expensive place to own a home.

A new index from the University of San Diego's real estate school uses unique ways to track homeownership costs — exclusively using renter income and breaking down the cost of household expenses across metro areas — but the conclusion is still what locals have come to expect.

The San Diego metropolitan area, which includes all of San Diego County, was the fifth-most expensive place to own a home in the nation's 50 largest metro areas, the index said. The Los Angeles metro area was the most costly, followed by the metro areas of San Jose, San Francisco and New York. Data was based on the first three months of the year.

The new Housing Affordability Index from USD's Burnham-Moores Center for Real Estate is different from a classic affordability study because it pegs everything to renter income. Developers of the index use renters' income because they say homeowners benefit from "embedded benefits," such as lower mortgage rates, property taxes and (usually) a lower purchase price.

By using rental income, it ties data to the cost for a new homeowner — who is probably renting right now — and figures out what monthly costs would be for everything from taxes to electric bills.

Norm Miller, co-developer of the index and professor emeritus at the university, said that current homeowners in many cases have property taxes half of what they would be for a new buyer. Part of that is because of Proposition 13, which limits annual property tax increases to 2%.

"The situation for an existing owner is so much of an advantage in California," he said.

Miller and index co-author, Rhode Island-based data scientist Ian Kennedy, conclude the cost of homeownership in San Diego is better in some aspects compared to other parts of the nation.

The index said San Diego County renters, with a median household income of $81,521, would spend 86.8% of annual income on a mortgage, taxes and expenses if they purchased a median priced property now. It could be worse: Los Angeles renters would be spending slightly more than 100% of income to own a home there, 98% in San Jose, and 91% in San Francisco.

Here's how the San Diego County data breaks down:

• New owners can look to spend 2.1% of annual income on insurance. That's lower than some other parts of the U.S. For instance, it would be 5.5% in Miami, where flood insurance costs have seen a significant rise.
• The tax bill would take up 11.6% of annual income, lower than 13.3% in San Jose and L.A., but much more than Birmingham, Ala., where it is 2.3%. Property taxes are based on the price of a home, so tax burdens in California (as opposed to long-term owners with Prop. 13) will have higher burdens to start.
• Utility bills would take up 3.7% of annual income, which may come as a surprise because San Diego often tops studies for highest per kilowatt-hour rates. However, the index uses data for how much people are actually paying for electricity and household gas. The gist is that even though our rates are high here, our weather doesn't warrant spending all year on heating or air conditioning. The index said the area where people are paying the most in utilities was the place with the lowest property taxes: Birmingham.
• Homeowner association fees for a new home would take up 4.6% of annual income. That's not the cheapest (less than 1% in St. Louis, San Antonio and Austin) but less expensive than many East Coast markets, which often have older housing supply and need more upkeep. HOA fees took up 13.5% of annual income in New York and 10.1% in Providence, R.I.

Developers of the index intend to update it on a quarterly basis.

Article By Phillip Molnar