U.C. San Diego is surrounded by a lot of (relatively expensive) housing options. San Diego has become a booming telecommunications center. A lot of this growth has happened in Sorrento Valley - yes one exit north of campus on the 5. This means that apartment rentals have gotten more scarce and more expensive in the areas around campus (UTC, La Jolla, Sorrento Valley).
Alternately, you can live a bit further away, either to get closer to the beach, get closer to culture (other than what's on campus), or to pay less in rent.
The housing nearby in the UTC area is mostly condominiums and apartments. Most of the complexes near school are large (300 apartments/townhouses, usually as a large number of two or three story buildings).
Average Off Campus Rental Rates in San Diego (2002-2003)*
$450-$520………………..Rooms in private homes
$450-$600………………..Room Rental (own room with other students)
$2000 and up…………….Four/five bedroom house
*Rental estimates may be out-of-date.
The Clairemont and University City area is immediately south of UTC and offers housing at significantly better prices. It's not a terribly exciting are to live in, however. Likewise with Mira Mesa, UTC's neighbor to the East. It's possible to bike (although it's pushing it a bit), or there's a bus line.
The Hillcrest area tends to have cheaper housing (the best I've heard was a one bedroom apartment for $450 or so) and the area is more urban. There's more traffic, a better nightlife, better services (grocery stores, restaurants, coffee houses) nearby, more crowded conditions, etc. Hillcrest is also on the shuttle line to campus, with about a 20 minute bus ride. North Park, University Heights, and Normal Heights are fairly similar. Hillcrest is well known as San Diego's gay district, although there's a lively mix. Between the shuttle line and the culture, this area is pretty popular with students.
Many students also live in Pacific Beach. Prices are cheaper than near campus, but maybe a bit more than Hillcrest. Pacific Beach has horrendous traffic problems. It also has a very student-like atmosphere. Garnet, the main drag, has a number of nightclubs, bars, etc. Ocean Beach is somewhat similar but more chill; a bit further but a bit cheaper. Both are places near the beach that are actually geared towards students. There is a bus line to campus from Pacific Beach, although many people end up driving.
Downtown La Jolla is also an option. Places tend to be nice, and it's right near the beach. However, in general it's more expensive than the UTC area.
Up the coast you have some of the coastal communities. Del Mar and Solana Beach are both gorgeous little towns not all that far up the 5 from UCSD. Prices should be about comprable with the UTC, possibly slightly cheaper. Even though they're close, the traffic from there to campus is usually bad.
The housing office has a lot of useful information. When looking, you may also way to check out listings in some of the local media.