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Apartment rents rise in Oakland, San Francisco, San Jose

Sat, 20 Oct 2012 19:18:14 +0000

Apartment rents in the Bay Area’s three biggest cities continue to rise, with Oakland seeing a huge surge, probably fueled by renters priced out of San Francisco crossing the bay.

“Oakland is the less expensive alternative to San Francisco,” said Sarah Bridge, president of RealFacts, a Novato company that collects information on rents at large, professionally managed apartment complexes. “It’s an urban core and offers some of the same amenities on a small scale, and is still about $800 (a month) less expensive than San Francisco. It’s a spillover from the growth occurring in San Francisco.”

The average asking rent at buildings with at least 50 units in Oakland hit $1,925 in the third quarter, up 19 percent from the same time last year, RealFacts said. That figure averages rents for units ranging from studios to three bedrooms, but the trend is just as pronounced for each size. One-bedroom apartments, for instance, were asking $1,761, a 20.1 percent increase from a year ago, RealFacts said.

San Francisco’s already sky-high rents continued climbing, with a new average asking of $2,768 at big complexes, up 7.6 percent from a year ago. San Jose saw a 9.6 percent increase to an average of $1,845, RealFacts said.

Apartment hunters on both sides of the bay are reeling from sticker shock.

Matt and Jennifer Renner are moving back to the Bay Area after a few years living in Brooklyn and Boulder, Colo. They’re seeking a two-bedroom in Oakland for about $1,900, Despite both having stable employment, good credit and excellent references, the pickings are slim.

“In the four years we’ve been gone, it’s staggering how much the rents have gone up,” Matt Renner said. “We considered looking at San Francisco, but the rental market there was crazy, comparable to Manhattan.”

Big increases in 4 years

In 2008 when they were last here, it was a different story, he said. “I was in a three-bedroom, really nice house in the Lower Haight for $3,000 a month,” Renner said. “My wife had a nice one-bedroom in a safe neighborhood in Oakland for $875 a month. Now that’s almost doubled.”

In San Francisco, what passes for good news is that the trajectory for rent hikes appears to be slowing, which might mean the market is close to saturation.

“It’s not as if San Francisco is going to experience a rent drop, but I think it’s gone as far as it can go,” Bridge said. She said she thinks San Francisco is following a pattern set by East Coast cities such as New York and Washington, which saw rapid price appreciation and now appear to have maxed out the increases.

“It’s not a demand issue; there would be more people willing to rent an apartment (in San Francisco). It’s affordability,” she said. “There aren’t that many high-paying jobs that (landlords) can just keep raising the rents to ridiculous levels.”

People who are apartment- hunting in San Francisco continue to report that it’s a blood sport.

‘Massive changes in wealth’

Bo Lu, co-founder and CEO of FutureAdvisor, which offers online financial advice, is moving his seven-person Seattle startup to San Francisco to be closer to the talent pool and the startup community.

He and his girlfriend, Marlo Struve, hired real-estate agent Wendy Willbanks, who runs an “apartment concierge” company called She Moves You, to help them look. After four intensive days of touring more than a dozen units, they signed a lease on a two-bedroom in the Castro for $3,200 a month, including parking.

“The cost was enormous in both time and money,” he said. His theory about the escalating rents takes a macroeconomic view of the tech boom.

“Many startups like mine are replacing humans with computers,” he said. “Whenever you take an industry that used to employ tens of thousands and instead employ a few hundred engineers, you end up with massive changes in wealth. Engineers are being paid a lot, so they are bidding up these insane prices.”

Willbanks, who sees plenty of units in her capacity as an apartment scout, said the rent increases are astounding.

“It’s just insane; $3,000 a month is a mortgage payment,” she said. “Some of the square footages (for that) are horrendous. These places are 600 to 900 square feet, and they’re charging three grand a month.”

Target for investors

The escalating rents make Bay Area cities increasingly attractive targets for large-scale real estate investors.

Ivanhoé Cambridge, the real estate subsidiary of a major institutional fund manager in Quebec, has spent more than $600 million in the past year buying apartment complexes from Cupertino to San Jose, totaling 2,300 units. It plans to build a high-end, 648-apartment complex in San Jose in partnership with Shea Properties, breaking ground in the spring with occupancy in about 2 1/2 years.

“We like the dynamic of the employment base. We like the fact that there are natural barriers to entry in the area,” said Sylvain Fortier, president of the residential division. “We like the combination of more tenants in an environment where new supply may not meet demand. We are seeing market increases on rents that are (already) fairly substantial. That will not continue forever, obviously.”

Managing expectations

Lu, the Seattle entrepreneur who is moving his company here, said he knows his employees will confront similar challenges when they house-hunt.

“When I get back, I will tell my team to manage their expectations,” he said. “In Seattle you can get a 700- or 800-square-foot place with parking in a nice neighborhood with a view of the water for $1,000 a month. They should budget time, be patient and expect prices that we’ve never seen before, even though we live in a metropolitan area. This is an order of magnitude beyond what I’ve ever seen.”

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/business/article/Apartment-rents-rise-in-Oakland-San-Francisco-3961019.php

Rents rise in SF, Oakland, San Jose

Fri, 19 Oct 2012 07:14:23 +0000

Apartment rents in the Bay Area’s three biggest cities continue to rise, with Oakland seeing a huge surge, probably fueled by renters priced out of San Francisco crossing the bay.

Apartment hunters on both sides of the bay are reeling from sticker shock.

Big increases in 4 years

In San Francisco, what passes for good news is that the trajectory for rent hikes appears to be slowing, which might mean the market is close to saturation.

People who are apartment- hunting in San Francisco continue to report that it’s a blood sport.

‘Massive changes in wealth’

“The cost was enormous in both time and money,” he said. His theory about the escalating rents takes a macroeconomic view of the tech boom.

Willbanks, who sees plenty of units in her capacity as an apartment scout, said the rent increases are astounding.

Target for investors

The escalating rents make Bay Area cities increasingly attractive targets for large-scale real estate investors.

Managing expectations

Lu, the Seattle entrepreneur who is moving his company here, said he knows his employees will confront similar challenges when they house-hunt.

Carolyn Said is a San Francisco Chronicle staff writer. E-mail: csaid@sfchronicle.com

Article source: http://www.sfgate.com/realestate/article/Rents-rise-in-S-F-Oakland-San-Jose-3961019.php

Rental competition fierce in SF’s market

Wed, 09 May 2012 14:18:05 +0000

Michael Austin and Emily Morrison aren’t highly paid tech workers. He’s an actor with a day job as an administrative assistant; she’s an arts teacher at CalShakes. Newly engaged, they’ve been seeking an apartment in San Francisco to move into together.

“We started combing Craigslist, and when we filtered by the neighborhoods we want and our maximum price of $2,000 for a two-bedroom, there is almost nothing,” Austin said. “It was just shocking to me.”

They broadened their search to the East Bay. Even there, “You show up at an open house and it’s really intimidating,” he said. “There are 20 other couples already ready to apply.”

They decided to “get creative and get off the Craigslist merry-go-round,” he said, posting their search on Facebook and placing their own Craigslist “apartment wanted” ad. A Facebook friend shared a tip on an Oakland apartment that may work out for them.

Their story is typical of San Francisco’s overheated rental market, where well-compensated tech workers are flocking to desirable neighborhoods, driving up prices and locking out those who aren’t big earners. The chichi areas, which also are closest to convenient transit, are hardest to break into. And the competition is spilling over into the East Bay.

“The Bay Area is growing in an extraordinary, unprecedented way,” said Sarah Bridge, owner of Novato’s RealFacts, which tracks apartment prices nationwide at buildings with 50 or more units.

“It has to do with job growth,” she said. “It’s a gold-rush mentality where the best and the brightest come to the Bay Area. The trend is for Gen Y folks, which is mostly what employers are hiring, and that particular generation has a preference for the urban core.”

San Francisco rents rose 15.8 percent in the first quarter of this year compared with the same time last year, to an average of $2,663 for all size units, according to RealFacts. Studio apartments average $2,075, up 16.5 percent in a year. The steepest rise came in one-bedroom, one-bathroom apartments, which are now $2,611 – up 19.9 percent in the past year and up 30 percent from just two years ago.

Growth was also strong in San Mateo County, where units of all sizes average $2,003, a 15.6 percent annual increase, RealFacts said. In Santa Clara County, the $1,857 average rent is a 12.5 percent annual increase. For Alameda County, the $1,519 average rent is up 7 percent – still a big increase compared with other areas of the country.

“When you see markets like Oakland with rental growth, it’s because it has proximity to San Francisco rather than in and of itself doing anything,” Bridge said.

San Francisco is the most expensive metropolitan area in the country for renters, according to a recent report from the National Low Income Housing Coalition, which compared rents to wages. The going rate for a two-bedroom apartment in the counties of San Francisco, Marin and San Mateo requires a $76,200 annual income, the report said. By contrast, the New York metropolitan area, which includes eight counties, requires a $56,950 annual salary.

Even well-paid workers can find it hard to navigate San Francisco’s blood-sport rental market.

That’s spurred the creation of services targeting them. Real estate agent Wendy Willbanks last year decided to become a scout, or “rental concierge,” for apartment hunters, calling her business She Moves You (shemovesyou.com).

“I swoop in and beat the competition,” Willbanks said. “It’s a fast track to jumping them ahead of the long lines of other applicants (and) landing a rental property in San Francisco without wasting time.”

After nailing down her clients’ wish lists, Willbanks sifts through listings and attends open houses, armed with her clients’ credit reports and renter profiles. She photographs and videos the spaces. Some clients, such as people moving from elsewhere in the country, decide on apartments based purely on her scouting.

Article source: http://www.sfgate.com/cgi-bin/article.cgi?f=/c/a/2012/05/09/BU551OD1PL.DTL&tsp=1

Census: Blacks leaving urban core for East Bay suburbs

Sun, 13 Mar 2011 17:21:07 +0000

In early 2008, moving from West Oakland to Antioch was a deal Felicia Duncan couldn’t refuse.

“I had purchased a house, the kind of house I was able to get out there but I couldn’t get here for the price,” said the real estate agent and single mom. She moved into an almost-3,000-square-foot, four-year-old house that would have cost two or three times more in Oakland.

Today Duncan is renting out both her West Oakland and Antioch homes while living in an apartment in Oakland’s Adam’s Point section; she returned in early 2010 because Antioch didn’t offer an adequate public or private education for her daughter, now a sophomore at Oakland’s Bishop O’Dowd High School, and she couldn’t hack the commute.

She’s an exception, in that she came back. Many African Americans quit Bay Area cities for good in favor of lower housing prices, job opportunities, better schools or other draws elsewhere, according to data released Tuesday by the U.S. Census Bureau.

To some extent it’s a statewide phenomenon. The 2010 census “Black or African American alone” category, including black people who don’t identify as mixed-race but including those who also identify as Latino, now accounts for 6.2 percent of California’s total population, down from 6.7 percent in 2000.

The change has been precipitous in the Bay Area’s historically black cities: Oakland’s and Richmond’s black populations each dropped by 23 percent from 2000 to 2010. That means black people accounted for

35.7 percent of Oakland’s population at the decade’s start and 27.3 percent at its end; in Richmond, blacks went from being 36.1 percent to 25.9 percent of the city’s population.

Elsewhere, Berkeley’s black population decreased by 20 percent, San Francisco’s by 19 percent, and East Palo Alto’s by 31 percent.

Many people moved to the suburbs. Antioch, in Contra Costa County’s eastern reaches, saw its black population double while nearby Brentwood’s almost quintupled. Manteca’s black population more than doubled, Tracy’s by 91 percent, Stockton’s by 30 percent. And further inland, Sacramento suburbs such as Carmichael, Elk Grove and Roseville saw significant black population increases.

The reason for the flight to the suburbs?

“From what I’ve observed over the past 10 years, I think it’s redevelopment and violence,” said the Rev. Andre Shumake, the Richmond Improvement Association’s president.

Urban redevelopment has not met “the double bottom line” of providing good returns for investors while also benefiting the affected communities, he said. Redevelopment projects often displaced low- and moderate-income African-Americans and “many wind up not coming back, or they couldn’t afford to come back taking their talents and skills elsewhere, and it leaves an incredible drain on the communities and the neighborhoods,” he said.

“The gentrification and displacement is alive and well in Richmond,” he said.

“As it relates to violence, I believe the devastation that many of these families have experienced and continue to experience meant families that could move away did move away to what they believed would be a safer environment.”

Many times, he said, he has heard Richmond residents wish “if only I could just get out of here, take my family somewhere else.”

Some have stayed and organized against crime, he said, while some “decided they were just going to pack up and leave.”

Reggie Moore became Antioch’s first African-American elected leader, a city councilman, in 2006. He said most of the black community’s growth there seems to be in the city’s newer southeast section — an area in which he had advocated for slower, more limited development while serving as a city planning commissioner a decade ago.

Moore said most African-Americans probably moved to Antioch for the same reason he did in 1990, from Hayward. “You can buy a brand-new big home and triple your lot size for less than say a 60-year-old house in Oakland. The weather is warmer, there’s just a lot of opportunity,” Moore said.

Some might have brought their urban attitudes with them, Moore said, and the city has felt some culture shock. Moore said he has witnessed some racial insensitivity, which surprises him given the overall Bay Area’s progressive nature.

“There are times I’ve been taken aback, even shocked,” he said.

A Cal State University academic saw a very old trend in the population shift.

This week’s data reveals market forces that have been shaping America’s cities for 150 years, perhaps exacerbated by the now-burst housing bubble, said Benjamin Bowser, emeritus professor and former chairman of the Sociology and Social Service Department at California State University, East Bay.

“African-American communities have generally been at the bottom of the housing pool in terms of price, cost and generational inheritance,” he said. “After other groups have settled communities and moved on, African-Americans have found that’s where they can buy into.”

Property values in historically black neighborhoods of Oakland, Richmond and other cities dipped to a point where they looked like bargains to more affluent people hoping to live near major urban centers. Many blacks suddenly saw their housing values rise, even if most of the rest of their economic outlook had not improved.

“And all of a sudden someone wants to give them obscene amounts of money for their property. That results in people selling and then taking that money and buying into newer, roomier, ‘better’ properties in their interpretation away from the Bay,” Bowser said. “These are going to be the new black communities for the next couple of decades, and the old black communities will be transitioned into new uses.”

This is producing a model more like European cities such as London and Paris, he said, in which poorer people of all ethnicities live in a ring around the urban center, commuting in to work. Better enforcement of ordinances that require new urban housing development to include space for low- and moderate-income households could ease this, he said, but ultimately “if values go up and you’re sitting on that, you get moved, and you get moved to places where values have gone down. That’s the nature of the market and of the economy.”

Another expert generally agreed with one reason for minorities moving to the suburbs, but cautioned that the housing crisis might be affecting the data.

With Oakland and other local cities hit hard by a foreclosure crisis that occurred during the census count, “that means the population of the community is in flux at that time” and so becomes harder to accurately count, said Steve Spiker, research director for the Oakland-based Urban Strategies Council.

For example, people who have lost their homes and moved in temporarily with relatives or friends might not be fully accounted for, he said.

“There’s a lot of big social churning that’s happening right around the census time so it’s hard to intricately trust the data.”

Staff Writers Paul Burgarino and Lisa Vorderbrueggen contributed to this report. Read the Political Blotter at IBAbuzz.com/politics. Follow Josh Richman at Twitter.com/josh_richman.

Article source: http://www.mercurynews.com/breaking-news/ci_17577468