For renters, the new normal: lower expectations and shrinking apartments

Gabriel Rodarte grew up in San Jose and has worked there for 30 years as a mailman for the U.S. Postal Service.

Making his rounds, he says, “I see it all. I see three families living inside one small apartment, or total strangers who share a room. None of them stay very long; they can’t afford it.”

Neither can Rodarte. He earns nearly $60,000 a year, but his apartments keep getting smaller. Dodging the region’s skyrocketing rents for the last five years, he now rents a room from a friend for $400 a month and feels “trapped. That’s where I’m at — I feel like I’m the working poor. It’s just ridiculous when you can’t afford to live in the place where you grew up.”

A generation of tenants now sees itself as rent-poor, with every last dime doled out for gas, groceries and the landlord. Renters struggle throughout the Bay Area.  In San Jose, the median monthly rent for a two-bedroom apartment is now $2,550, far above the national average of $1,560.  A similar two-bedroom flat can cost even more elsewhere: $3,080 in Walnut Creek and $4,910 in Cupertino, according to a recent report.

As the Bay Area’s economy booms, and as the tech sector continues to expand, this is the new normal for those on the margins: shrinking expectations and shrinking apartments. Nearly 40 percent of working adults in the Bay Area are now “doubled up” with roommates in order to afford rent, according to a study from Zillow.

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Rents in San Francisco and Oakland down at the End of 2017

Continuing the trend we first noticed forming at the end of 2016, asking rents for apartments in San Francisco and Oakland ended the year lower than at the start of 2017.

In fact, based on a comparison of nearly 2,400 listings, the weighted average asking rent for an apartment in San Francisco, including one-off rentals as well as units in larger developments such as Avalon’s new complex in Dogpatch, is currently running around $4,000 a month, which is around 4 percent lower versus the same time last year and roughly 10 percent below a peak in the fourth quarter of 2015.

And the average asking rent for a one-bedroom apartment in San Francisco is currently running around $3,400 a month having crossed the $3,600 mark in 2015.

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Oakland Approves Tenant Relocation Assistance for Owner Move-Ins and Condo Conversions

The Oakland City Council last night approved new financial assistance for renters displaced by certain types of no-fault evictions.

Under the new rules, if a tenant is evicted by a landlord who is moving into the rental unit, or whose immediate family member is moving in, the landlord must pay the tenant an amount between $6,500 and $9,875, depending on the size of the rental unit. Similarly, if a landlord evicts a tenant in order to convert the apartment into a condominium, the payments also have to be made.

Read more from East Bay Express

Development of red-tagged West Oakland warehouse moves forward

A San Francisco developer’s plans to develop a blighted warehouse in West Oakland into 102 live/work units are moving forward, with the goal of offering most of the previous tenants a place to live in the new building.

The project at 1919 Market Street has been through many hurdles since developer oWow, run by Danny Haber, purchased it in June 2016; it’s slated to finish construction in 2018. Before the purchase, it was red-tagged by the city, causing the previous tenants to be displaced. Haber later had it partially demolished.

The warehouse has been a point of controversy for years — both before Haber bought it and afterward. Before Haber came in, the warehouse was pervaded with code violations. Haber said his team attempted to work with the city to fix the problems over time and keep the tenants living there, but city inspectors deemed the building uninhabitable and red-tagged it.

Read more from East Bay Times

Home prices nearly doubled in this surprising California city

As home prices skyrocket across the state, there’s one California city where they’ve shot up more than anywhere else in the U.S. — nearly doubling in the past five years. No, it’s not San Francisco, San Jose or Oakland. It’s not even in the Bay Area.

It’s Stockton, the Central Valley community twice dubbed America’s “most miserable” city by Forbes Magazine because of its high rates of housing foreclosures, unemployment and violent crime.

The jump in home prices in Stockton and neighboring Lodi — up about 92 percent over the past five years — is dramatic evidence of the ripple effects of the Bay Area’s tight housing market and the increasingly out-of-reach cost of living here. As people flee San Francisco and Silicon Valley in search of cheaper housing — heading to places like Stockton, Oakland and Sacramento — prices in those second-tier markets are rising.

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Oakland City Council: Tenant Relocation Assistance Delayed, But Moratorium on Rent Control Loophole Passes

Extra assistance for renters who are displaced through no-fault evictions failed to pass a second reading at the Oakland City Council last night after Councilmember Annie Campbell Washington had the legislation pulled from the agenda’s consent portion of the calendar and scheduled for a future council meeting’s non-consent portion, where it will likely be debated and amended.

The tenant assistance bill, authored by Councilmember Rebecca Kaplan, would extend cash payments — between $6,500 and $9,875, depending on the size of the rental unit — to renters displaced through no-fault owner move-in evictions and condominium conversions. Renters with children, or those who are elderly, disabled, or low-income would be eligible for additional assistance.

Read more from East Bay Express

Exclusive Research Reveals Stable Outlook for the Multifamily Sector

Capital is continuing to flow to the multifamily sector. Despite concerns that the real estate cycle is peaking—and with high levels of multifamily construction in some metros—fundamentals have steadily improved and investment sales remain robust. Exclusive research conducted by NREI indicates that the market is likely to stay that course for at least another 12 months.

Apartments remain a favored property type among commercial real estate investors. When asked to rate the attractiveness of the different core property types on a scale of 1 to 10, survey respondents scored multifamily the highest at 7.9, but the score on industrial properties continues to gain ground. It now stands at 7.5. Hotels and office assets both scored at 5.9, while retail’s score has crashed to 4.5.

Read more from National Real Estate Investor

BART, Concord eye vacant site for affordable housing

BART may partner with the city to bring much-needed affordable rental housing to a vacant property a few blocks from the downtown station.

The transit agency owns a 9-acre parcel between Monument Boulevard and San Miguel Road that sits just south of the Concord skate park. Although a canal runs through the property, city staffers believe at least part of it could be developed.

BART works with local communities to develop high-density housing at its stations. Such mixed-use developments are under construction at the Walnut Creek, MacArthur and Coliseum stations, however the Concord project would be the first built on an off-site BART property, according to spokesman Jim Allison.

Read more from East Bay Times

Lafayette settles rent question, for now

A proposal to allow tenants of large apartment buildings to appeal rent increases greater than 10 percent fell one vote short.

The decision rested with Mayor Mike Anderson and council members Don Tatzin and Cameron Burks because colleagues Mark Mitchell, who owns a rental house in Lafayette, and Ivor Samson, who is indirectly tied to a firm that owns rental property in the city, had recused themselves.

Read more from the East Bay Times

Oakland rent control loophole temporarily closed

OAKLAND — For the next six months, Oakland landlords won’t be able to raise rents on properties under rent control after making repairs to them.

Oakland and San Francisco are the only two cities in the state which have “substantial rehabilitation exemptions” to rent stabilization ordinances, according to the report supporting the moratorium proposed by City Council members Dan Kalb and Rebecca Kaplan. Council members voted Tuesday to impose the moratorium on granting the exemptions.

Read more from East Bay Times