Stein was trying to replace tenants who’d left for different states, or who jumped at discounted leases in long-elusive areas like San Francisco’s Marina District. In one memorable case, he recalled, a new tenant broke a lease before finishing unpacking.
“A day into it they’re like, ‘We’re moving to Tahoe,’” Stein said. “That’s a pandemic story.”
But that was then.
As of February, San Mateo rents have shot up nearly 17% from the same time a year ago, to a median $2,370 for a one-bedroom apartment and $3,220 for a two-bedroom, according to new data from Apartment List. It was the biggest local annual leap in Bay Area rents, which analysts say are poised to keep climbing this spring and summer as white-collar workers are urged back to offices at least part time.
Rents in San Francisco are up almost 16% from February of 2021, to a median $2,340 for a one-bedroom apartment and $2,710 for a two-bedroom, Apartment List found, based on an analysis of Census data and trends among rental listings on its site. Several other Bay Area suburbs and commuter hubs also saw major price increases in the past year, including Union City (15%), Berkeley (13%) and Redwood City (13%).
“We’re really kind of officially in the beginning of the busy rental season,” said Rob Warnock, a San Francisco-based senior research associate at Apartment List. “The sort of desperation that property managers had to fill vacant units, that’s probably, if not already gone, on its way out.”
Still, Warnock said, the Bay Area is unique in that it’s the only major metro area where prices have yet to reach pre-pandemic levels. In the San Francisco and San Jose metro areas, rents remain about 5% below March 2020 rates — a stark contrast from lower-cost cities that morphed into pandemic destinations, like Miami, where prices jumped 25% in the past two years, to a median $2,098 for a two-bedroom apartment. A lack of local laws limiting rent increases has led to local reports of some longtime tenants seeing huge overnight rent hikes in smaller towns like mountainous Asheville, N.C., where rents have soared 33% since coronavirus lockdowns began.
Rents in California, however, were already among the highest in the nation before the pandemic. In some areas farther from the coast, like Sacramento and Southern California’s Inland Empire, prices have already surpassed March 2020 levels. In the Bay Area, the renewed ascent of prices comes as concerns about inflation and global economic turmoil collide with expiring pandemic eviction protections, highlighting a widening gap between renters in different jobs and income brackets.
Another recent Apartment List analysis found that, as of 2019, nearly 30% of residents with jobs that could not be done remotely — retail clerks, food service workers, construction workers and others — were severely “cost burdened” by housing, meaning that more than 30% of their incomes went toward housing costs. That’s compared with 19% of residents in remote-friendly fields like IT, accounting and office administration, raising big questions about who may be forced to stick around as prices rise.
“Do you have the ability to work remotely and reduce your housing costs dramatically,” Warnock said, “or are you more geographically tethered to a place?”
In Stein’s experience listing rentals for mom-and-pop landlords scattered from Menlo Park to Daly City, which range from $1,900 studios to large $9,000 homes, competition is still not as intense as before the pandemic. Tech workers have been trickling back to the Peninsula for months, he said.
Some applicants’ recent rental histories list extended Airbnb stays in Hawaii, Cancun or Europe, Stein said. While it’s still more of a renter’s market than in the past, both prices and demand are on the rise.
“As soon as you post something, people will be calling,” Stein said. “But it’s not like it was in the dot-com phase or other run-ups. People do take their time.”
While rising rents are good for business, Stein said he worries about longer-term trends like bigger real estate investors buying up homes and a lack of affordable options for vulnerable tenants on the Peninsula. For years, he’s heard stories about local firefighters commuting in from Reno.
Amid the familiar housing anxiety, Gov. Gavin Newsom this week rolled out a long-awaited plan to drastically increase the amount of new housing being built in the state. By 2030, the state will direct local governments to build 2.5 million new homes, with at least 1 million of those set aside for low- and middle-income residents. That’s fewer than the 3.5 million homes Newsom previously said he would push the state to construct by 2025, but more than double previous state targets.
Though many Bay Area cities have a long history of missing state housing targets with few consequences, officials said that extreme pressure on both renters and would-be homeowners has forced the state to take a harder stance and enact new penalties.
“California’s 2.5 million unit target is no longer a paper exercise,” according to the new report. “It’s an expectation for the zoning, permitting and construction of real, new housing units.”
Lauren Hepler is a San Francisco Chronicle staff writer. Email: lauren.hepler@sfchronicle.com Twitter: @LAHepler
Article source: https://www.sfchronicle.com/sf/article/Bay-Area-rents-approach-pre-COVID-levels-16976010.php
