Need to find a subletter in the Bay Area this summer? Good luck

Summer in the Bay Area usually brings a flood of interns, students and new workers who fill spare rooms and snatch up months-long Airbnb vacancies.

But this year, the coronavirus pandemic has upended the once-hot Bay Area housing market and kept people at home, leaving landlords bereft — and some renters on the hook for payments from subletters who never showed.

Karishma Gokhale, who lives with three roommates in an apartment in downtown San Francisco, has been searching fruitlessly for a subletter to take over the remainder of her lease. Before, it took only two weeks at most to fill an empty spot in her apartment. But this time is different.

Gokhale signed a new lease agreement at the beginning of March, putting her on the hook for rent through March 2021. For now, she and another roommate, who would also like to leave, plan to keep paying rent.

“So essentially we could leave if we paid a lease break fee, but then the rent would fall onto our roommates,” she said.

Michelle He, who recently graduated from UC Berkeley, is living alone in her two-bedroom Berkeley apartment and has struggled to find subletters to fill the extra space. If she cannot find roommates soon, she said she may break her lease and return to the loft in the house where she used to live with her parents.

That’s an increasingly common choice. A survey from the San Francisco Apartment Association estimated that 7.5% of renters in San Francisco have broken their leases in the past three months, an unprecedented number. Lease-breakers are legally responsible for rent until a landlord can find new tenants, according to state law, though not all may enforce this and a few places, including Solano County, have made an exception for coronavirus-related departures.

Other renters had planned to have summer subletters fill their apartments before they moved to the Bay Area — a common tactic in the housing-poor region — but are struggling to find takers. Recent college graduate Michael Bass and his roommate signed a year-long lease for an apartment in San Francisco’s North Beach neighborhood, intending to sublet the three-bedroom place for July and August to interns or college students. They have found mostly radio silence in their calls for tenants — a reflection of how most internships have been canceled or gone remote.

“We had a very strong conviction that it would work out in April, but that quickly went sour. Very quickly,” Bass said.

He and his roommate likely will remain on the hook for those summer months of rent and are now considering an earlier move to the Bay Area so the apartment does not go unused.

Companies in the business of short-term rentals are also having difficulties. Airbnb laid off a quarter of its workforce in May, and Sonder, another hospitality company headquartered in San Francisco, had major layoffs in March.

”There’s been a lot who have just kind of disappeared, mailed in the keys, and just vacated, sometimes with furniture left there,” said Sarah Yaussi, vice president of business strategy for the National Multifamily Housing Council, which does research and advocacy for the apartment industry.

Some management companies have terminated their contracts for short- and mid-term rentals, according to Eric Baird, managing director of a listing site called ReLISTO that offers rental units in the Bay Area. Baird said his company plans to move away from short-term rentals for now.

“If there’s any time to rent long-term, this is it,” he said.

Jackie Tom, who rents out a furnished apartment for 30-day-plus periods and uses the money to help pay for her daughter’s school, has been unable to find a short-term renter despite cutting prices and offering more amenities than usual.

“The furnished market overall is pretty slow, to the point where I’m considering leasing my unit downstairs in my house long-term,” she said, noting she observed similar trends in two businesses she runs.

Previously, “I didn’t always want to have someone living downstairs from me,” she added. “But given the change in the environment, it’s always nice to have extra income to pay for my daughter’s school.”

The slack summer demand from students and interns likely will evolve into a more serious problem for the rental market as a whole in the fall if students do not return, according to Krista Gulbransen, executive director of the Berkeley Property Owners Association. UC Berkeley has said that its fall semester will take place mostly online — and many property owners and rental managers around schools and colleges are beginning to wonder if they should instead offer their units to longer-term tenants, especially nonstudents, Gulbransen said. If landlords adjust, students returning in a year might have a hard time finding housing that fits their time frames and price ranges, she added.

“The summer’s just shot. So for someone to go longer than the summer on a vacancy just to see if the students come back in January is probably not realistic and doable,” Gulbransen said.

Anna Kramer is a San Francisco Chronicle staff writer. Email: anna.kramer@sfchronicle.com Twitter: @anna_c_kramer

Article source: https://www.sfchronicle.com/business/article/Need-to-find-a-subletter-in-the-Bay-Area-this-15358812.php

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Bay Area rents plummeted in June: See the biggest drops by city

Bay Area apartment rents continued to drop in June as the coronavirus kept most offices closed and layoffs mounted.

One-bedroom rents fell compared to the prior year in 27 of 31 Bay Area cities tracked by Zumper, a real estate listings website. The biggest drops were concentrated in major Silicon Valley tech hubs, including Cupertino, the home of Apple; Mountain View, where Google is headquartered; and Menlo Park, Facebook’s hometown. Those cities have some of the region’s highest rents. Emeryville was the only East Bay city that saw a double-digit drop.

San Francisco’s one-bedroom rents plunged 11.8%, the highest drop on record and the biggest among major U.S. cities. The city remains the most expensive in the country.

Widespread work-from-home policies are pushing tenants to reconsider whether continuing expensive leases is worth it. Many tech companies including Facebook and Google are allowing workers to stay home until the end of the year. “People are definitely taking this time to move out of San Francisco,” said Crystal Chen, marketing manager at Zumper, though she said many are still staying in the Bay Area.

 Bay Area rents plummeted in June: See the biggest drops by city

Zumper data shows that downtown San Francisco, South of Market and Hayes Valley saw some of the biggest drops in rent, while demand increased in outer neighborhoods like the Sunset, Richmond and Lakeshore. Tenants not having to commute downtown and access to more outdoor space makes those areas more desirable, Chen said.

The number of listings have risen about 25% in San Francisco compared to the previous year, meaning renters have more options. Chen said her friends have successfully renegotiated rent at a lower rate and she urges prospective tenants to push for lower rents and more incentives, which can include gift cards or free parking.

In contrast, Oakland rents rose in June, which Chen attributed to renters looking for a less expensive option compared to San Francisco. The city is also seeing thousands of new apartments being completed in the downtown area, which have higher listing prices than older buildings.

Hundreds of thousands of unemployment claims in the Bay Area during the coronavirus make it harder for people to stay in the region.

“I was expecting a significant drop in rents and a big jump in vacancy rates. Unemployment hits the rental market much harder than it hits the for-sale market,” said Patrick Carlisle, chief market analyst in the Bay Area at real estate brokerage Compass. “Tenants paying the highest rents in the nation decamp quickly if their jobs disappear — to cheaper areas or back to mom and dad — and that is what is happening now.

The calculations are based on median rents for one-bedroom apartments listed in June compared to the previous year.

Cupertino: -15.7% to $2,680

Mountain View: -15.1% to $2,930

Emeryville: -13.8% to $2,490

Menlo Park: -13.5% to $2,830

Santa Clara: -12.9% to $2,570

San Francisco: -11.8% to $3,280

Palo Alto: -11.1% to $2,800

Union City: -10% to $2,150

Milpitas: -9.5% to $2,560

San Ramon: -9% to $2,010

San Jose: -8% to $2,300

Richmond: -6.7% to $1,810

San Bruno: -6.5% to $2,870

South San Francisco: -5.4% to $2,470

Redwood City: -5.3% to $2,850

Sunnyvale: -5.2% to $2,560

San Mateo: -4.3% to $2,660

Daly City: -4.3% to $2,430

Fremont: -2.3% to $2,150

Alameda: -2.3% to $2,110

Vallejo: -2.1% to $1,380

Dublin: -2% to $2,420

Hayward: -1.6% to $1,900

Berkeley: -0.8% to $2,380

East Palo Alto: Rent was unchanged at $2,030

San Leandro: Rent was unchanged at $1,850

Walnut Creek: Rent rose 1.3% to $2,290

Concord: Rent rose 2.3% to $1,760

Oakland: Rent rose 4.5% to $2,300

Campbell: Rent rose 4.8% to $2,200

Livermore: Rent rose 15.1% to $2,060

Roland Li is a San Francisco Chronicle staff writer. Email: roland.li@sfchronicle.com Twitter: @rolandlisf

Article source: https://www.sfchronicle.com/business/article/Bay-Area-rents-plummeted-in-June-See-the-biggest-15383584.php

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San Francisco rental prices continue to plummet

When rents for one-bedroom apartments in San Francisco dropped by 9.2% year over year in June, it was the biggest dip in three years, according to Zumper. Now, the company’s July report has just been released and it’s breaking new records.

New estimates said one-bedroom rent is down 11.8%, which beats the previous month’s record of largest decline ever for the city.

Article source: https://www.sfgate.com/realestate/slideshow/San-Francisco-rental-prices-fall-june-11-percent-204756.php

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San Francisco sees record-breaking drop in rent prices amid pandemic, according to Zumper data – KGO

SAN FRANCISCO (KGO) — If there’s one silver lining amid the coronavirus pandemic, it’s that renters in the Bay Area may be able to save some money right now.

The average cost of renting a one-bedroom apartment in San Francisco was 11.8% lower in June 2020 compared to the same month last year, which is the largest year-over-year drop the city has ever seen, according to data collected by apartment rental site Zumper.

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Other Bay Area cities saw even bigger drops, Zumper CEO Anthemos Georgiades tweeted: down 15.1% in Mountain View, 13.5% in Menlo Park and 15.7% in Cupertino.

To be clear, the cost of renting in the Bay Area is still expensive. Very expensive. Zumper lists the average one-bedroom rent in San Francisco at $3,280 a month – the priciest big city listed.

There’s some evidence that as rent drops in major cities like San Francisco and New York, it could be driving up prices in “satellite cities.” For example, the cost of rent in Sacramento was up about 5% last month, says Zumper.

RELATED: Gov. Newsom extends state eviction moratorium through September

See the company’s full July rent report here.

Article source: https://abc7news.com/realestate/sf-rents-see-record-breaking-price-drop/6288920/

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SF real estate groups sue city over pandemic eviction law they say goes ‘too far’

A collection of real-estate industry and landlord groups have filed a lawsuit seeking to block a new city ordinance that prevents landlords from evicting tenants due to back rent or penalties accrued during the coronavirus health emergency.

The lawsuit — filed by the San Francisco Apartment Association, the San Francisco Association of Realtors, Coalition for Better Housing and Small Property Owners of San Francisco Institute — seeks to overturn the COVID-19 Tenant Protection Ordinance that Mayor London Breed signed into law Friday.

The housing industry is also seeking an order to immediately suspend the law, which permanently prohibits a residential landlord from pursuing an eviction for nonpayment of rent due to the pandemic.

The real estate industry groups said that the ordinance “violates constitutional and state law, conflicts with Gov. Gavin Newsom’s Executive Order on preemption and evictions, and, as drafted, will ultimately lead to more evictions as tenants are falsely led to believe that they can just stop paying rent.”

San Francisco Apartment Association Executive Director Janan New said the group’s members have been proactive in working with tenants unable to pay their rent because of the pandemic, often reducing rent and working out payment plans.

“But this ordinance goes too far,” she said. “No housing provider wants to evict, but by taking eviction for nonpayment of rent off the table, this ordinance will make it impossible for mom-and-pop landlords to collect the unpaid rent that they rely on for their mortgage, property taxes, maintenance and utilities.”

Supervisor Dean Preston, who sponsored the legislation with other board members, called the lawsuit “disgraceful but not surprising.” He said that many individual landlords have been working with their tenants but that “these associations have their own agendas.”

“In the midst of a pandemic, when people need to come together, it is outrageous that these real estate profiteers would go to court to promote mass evictions,” Preston said.

The real estate industry groups said that property owners also have been severely damaged financially by the pandemic, losing rent on both residential and commercial spaces. While about 97% of San Francisco tenants have continued to pay some rent during the pandemic, more than half of commercial tenants stopped paying altogether after their businesses were shuttered.

Noni Richen, president of the Small Property Owners of San Francisco Institute, said the law would allow renters to live “rent free from March 2020 to potentially September and beyond — and property owners would have no legal recourse to recoup unpaid rent.”

“Small owners are particularly hard hit by renters who cannot pay. We need the courts to intervene,” she said.

J.K. Dineen is a San Francisco Chronicle staff writer. Email: jdineen@sfchronicle.com Twitter: @sfjkdineen

Article source: https://www.sfchronicle.com/bayarea/article/San-Francisco-real-estate-groups-sue-city-over-15377029.php

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