Bay Area Rents on the Rise Again After Brief "Cooling Off" Period
A real estate analytics firm has some good news for Bay Area landlords — and bad news for tenants: Rents began rising again last year after a brief “cooling off period” in late 2016.
“The Bay Area region should register one of its best rent performances since at least mid-2016,” the Texas real estate analytics firm RealPage wrote in a new report for the real estate industry.
In a trend likely to fuel an already supercharged fight over rent control in California, landlords in San Jose, San Francisco and Oakland began raising asking prices again last spring and continued to increase rents in lease renewals for existing tenants. Monthly lease transaction data show “improved momentum” for apartment operators and investors, according to the report, echoing predictions of an upswing last month by the real estate data firm Yardi Matrix.
But for tenants unable to keep up with escalating rents, the conditions feel anything but improved.
“It’s totally backwards,” said Charitie Bolling-Tosuner, a third-generation San Franciscan whose family faces eviction from the two-bedroom Bayview area rental house they have lived in for more than a dozen years — and once hoped to buy — because they can’t afford the $5,700 rent. Bolling-Tosuner is a member of Alliance of Californians for Community Empowerment, one of the groups behind the rent control ballot initiative.
“For us, for people who actually work small-paying jobs and are trying to work here in the city, it’s hard for us,” she said.
San Jose is leading the nation in rent hikes, with a jaw-dropping 52.4 percent increase since 2010, according to the firm. Oakland and San Francisco were close behind, with increases of 51.1 percent and 48.6 percent, respectively, during that time period. The report found that the current uptick will be more modest than in previous years, but that low unemployment and continued job growth will keep rents high.
Rent for an average one-bedroom apartment costs $2,460 in the San Jose metropolitan area, $3,400 in San Francisco, and $2,100 in Oakland, according to a recent analysis by the real estate website Zumper.
California lawmakers and pro-housing activist groups have been pushing for more housing development as a way to shore up supply and lower the costs for renters. But the new inventory — while double the Bay Area’s average rate in recent years — is not expected to be great enough to have much of an effect on the market, RealPage concluded.
Meanwhile, rent-control proponents are gathering signatures for a November ballot initiative to repeal Costa Hawkins, a statewide law banning certain types of local rent control, such as price controls for condominiums, single-family rentals and apartments built after 1995, when the law was passed.
Democratic lawmakers have also proposed bills this year to expand renter protections, such as giving tenants more time to challenge evictions and creating a statewide law establishing a set of valid reasons that can be used to evict tenants.