Rents jump in Oakland, drop in San Francisco

While many Bay Area residents are continuing to see rising
rents, some local cities are actually registering dips in monthly
rates.

That’s according to Apartment Guide’s new
annual report
on the nation’s rental market, which compared
2019 average prices for multifamily rental properties to the
previous year. Unlike a number of its competitors, Apartment Guide
looks not only at the rental market overall but at various
apartment types, from studios on up. And the Bay Area picture is
decidedly mixed.

Although it remains one of the nation’s most expensive
markets, rents were down across the board in San Francisco. Studios
ticked down a surprising 8.2 percent from 2018 to 2019 to around
$3842. One-bedroom apartments came in 1.2 percent cheaper at about
$4,063, and two-bedroom homes were 11.2 percent cheaper at about
$5,478.

“Prices are getting a little more affordable,” said Brian
Carberry, managing director of Apartment Guide. “It’s still
really expensive to live there, don’t get me wrong.”

Across the bay, the opposite was true. Rents rose in Oakland for
all apartment types in 2019. Studios were 3.3 percent more in 2019
at about $2,839, one-bedroom units were .7 percent more at about
$3,308 and two-bedroom units were 6 percent more at roughly
$4,338.

Merika Reagan has lived in her East Oakland apartment for around
five years. Since her initial two-year lease expired, her landlord
has tried to raise her rent by hundreds of dollars. The
anti-displacement advocacy group ACCE Oakland initially helped her
negotiate a more modest increase, but the monthly rent payments are
still a stretch for the dog walker, pet sitter and trainer.

“I see people being displaced all around me,” the
44-year-old said, adding that the experience disrupted her sleep
and gave her anxiety. “I don’t want to be out there,
too.”

In San Jose, the market varies.

The average studio was 2.5 percent more expensive in 2019 at
$2,669.71, and the average one-bedroom apartment was .9 percent
more, at $3,118.25. But the average two-bedroom unit was 1.6
percent less expensive than in 2018, at $3,685.59.

Fremont, the only other Bay Area city in the report’s round up
of the nation’s 100 most populated cities, also saw a mix of
changes, with one-bedroom apartments going for less than in 2018
but two-bedroom units renting for slightly more.

Whether the softening of prices in some areas is temporary or
indicative of a true downswing, “it’s too early to make that
conclusion,” Carberry said.

Across California, rents for all apartment types have crept up
with two- and three-bedroom units seeing the most significant
increases. In some nearby states that have proven popular with
Californians fleeing the state’s expensive housing market, rents
have ballooned. In Idaho, home to recent hotspot Boise, the cost of
renting a studio has soared more than 32 percent from 2018 to 2019.
Still, at $1,695, renting a studio in Idaho was a steal in 2019
compared to in California where a studio cost $2,430.

Just one California city — Long Beach — cracks the top 10
list of where rents for a one-bedroom apartment are increasing the
most, although no city in the Golden State made the top 10 list of
where rents are declining, either.

Apartment Guide suggests that sluggish apartment construction
across the country in the last decade has put increasing pressure
on the rental market and fueled an uptick in prices, particularly
in the West. And yet the report also acknowledges that places with
low vacancy rates like San Francisco have also seen price
decreases, “indicating that undersupply may now be starting to
loosen its grip on these markets.”

While that might be welcome news for some California housing
advocates, who have heralded Gov. Gavin Newsom’s call to build
3.5 million new homes by 2025, the data suggests that the
apartments being built aren’t necessarily affordable for most of
the state’s residents.

Michael Trujillo, a staff attorney for the Law Foundation of
Silicon Valley, which advocates on behalf of tenants, said the
report doesn’t “really reflect what’s going on for low-income
renters.”

San Jose, he pointed out, has met market-rate housing goals but
failed to add enough affordable housing even as some existing
affordable units are removed.

“That kind of creates an exclusionary market for certain kinds
of people,” Trujillo said.

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According to Apartment Guide, a growing number of renters are high
income and older than 55, and searching for newer apartments with
lots of amenities.

In San Jose, Oakland and elsewhere, developers are building
luxury homes that tenant advocacy groups say are pushing low-income
renters out. Census data released last year
found
that with a number of San Francisco renters relocating to
Oakland for its comparatively affordable rents, longtime Oakland
renters were
being pushed
to Contra Costa County or, in some cases, leaving
the state altogether.

Reagan, the Oakland renter, was born and raised in San Francisco
but eventually moved across the bay.

“I’ve never been able to live there as an adult,” Reagan
said. “It’s impossible.”

Source: FS – All – Real Estate News 1
Rents jump in Oakland, drop in San Francisco