The average asking rent for an apartment in the Bay Area increased to $2,158 a month in the second quarter of 2014, up 10.3 percent versus the second quarter of 2013.
While San Francisco remains the most expensive Bay Area market with an average asking rent of $3,229 per month, up 9.4 percent over the past year and with studios averaging $2,583, the largest increase occurred in Oakland where the average rent now measures $2,421 per month, up 19.1 percent year-over-year, according to RealFacts.
Keep in mind that RealFacts statistics are based on a survey of institutional buildings with at least 50 units, buildings which tend to offer amenities beyond the walls of the apartments and are prime candidates for corporate rentals and tenants with relocation packages.
Perhaps the legislators representing neighborhoods that surround SF will start to realize that there are serious negative externality effects of the SF Rent Control Ordinance.
Or maybe you can stop whining about rent control, and realize that the biggest reason for these high prices is the fact that decades of NIMBY policy has ensured that there hasn’t been nearly enough housing built for the past half century…in SF, and even more so everywhere else in the bay. And given the current tech boom, the lack of housing is biting the Bay Area in the ass in a bigger way than ever before.
Maybe one of the biggest reason for high prices is because landlords like me will just leave our prime properties vacant because we can. The more I refuse to rent, others follow suit. It is only those who cannot afford to do so that will really suffer under the thumb of the communists and their sympathizers. As this becomes a city of haves and have-nots… I shall be on the top echelon.
Only buildings built before 1979 are subject to rent control. And there are not very many units sitting empty. After all, with an average rental price of $3200 / month, the property owner has only himself to blame for not making money off of an empty rental property.
I beg to differ. First, $3200/month might be a lot to you but owners know it comes with a catch. Namely, all leases are lifetime leases and after year 1, the real dollars received are less than the rent in the first year. Specifically, it will only increase by 60% of CPI. On top of this, you will have to hire expensive lawyers and pay your tenant $20k+ to leave in the end.
Therefore, there are plenty of units that sit empty. This is fact. As you may know, there is an old saying “Screw me once…shame on your, screw me twice, shame on me.” Many an owner in SF knows this to be all too true.
Cliff,
Tell that to the landlord who put his 2/1 on the market 2 blocks from Dolores Park in 2006 for 1700. Great money! Fast forward 8 years and market rent doubled. He is collecting less than 2000 today. So many rent control horror stories, where to start?
“under the thumb of the communists and their sympathizers.”
dood… u da man… da badass man, man! u on top of the world, man! I vote for you to take Romney’s place next year as president of the reepublican people of america! Save us from them red commies an’ their thoritarian rule, thugs threatnin us with guns n missiles and prison time for jes trying to be free!
da man is keepin me down!
Registered Dem here. And a capitalist. I think some of these supes are closet commies. This is one of the many realities of sf. People show here to express their offbeat selves and in capitalist America this means often very leftist opinions.
“closet commies” … yep, ‘cos in frisco ya gotta repress yer inner urges.
yes they do some sort of self-policing. Just imagine the headlines on Faux News if someone from SF of some political significance would out himself as communist? These extremists are a threat to the progressive cause simply because they’re scarecrows to moderate liberals.
it’s un-American.
them moderate liberals all cling to what fox news says, ‘cos it feels right, not ‘cos they’re closet conservatives or anything extremist like that.
Many things starting from SF are great and actually advance society. But other things are plain ridiculous. The issue has to do with the fact that moderate Dems are too shy to tell it like it is. SF ultra-progressives are living in their own bubble, but everything they do reflects on SF’s image, both positive and negative. In national politics, image is everything.
TL;DR: crazies make us look bad.
And then what? Everybody NOT a beneficiary of rent control tells it’s a horrible idea and yet no policy changes…
Rent control is a self-serving rule and no politician will ever touch it.
When CA home owners give up their rent control (aka Prop 13) I will give up mine.
Deal. Where do I sign?
I am serious. I do not care about the big tax break I get under prop 13.
As a landlord, the tax break you can get can be really nice, but what good is a tax break if your rental revenue shrinks into nothing after 2-3 decades?
Take a landlord buying then renting 3 units in 1980. He paid 400K and collected 1200/month. His property taxes were roughly 400/month. All was good then.
Today his property is valued at 2M, his tax break would be 1600/month. But the rent he is getting is only $2000/month after all the allowed rent increases. The cost of maintaining the building, doing upgrades, upkeep, will eat up all the rent.
Without rent control, he would collect $10000 in rent, pay $2000 in property tax, and have more than enough to do his normal landlord job.
Yeah, prop 13 can go if rent control goes too.
Yes you do. You do care about the tax breaks you and all of us get due to Prop 13.
Only a fool who owns property would not agree.
futurist takes one sentence out of context and does his little pompous dance, calling other fools. And looking for a fight as usual. Sigh.
I’ll sign too – even though I’d lose money on that deal. It’d be worth it to have the ability to easily remove the bad tenants who bother my nice tenants.
Tenant quality aside, rent control breaks the basic landlording 101 principles from the get go. Becoming a landlord today means you have an exit strategy, or an angle.
A very simple fix to rent control would be to modify the annual increase amount to something realistic. 60% of CPI guarantees a subpar return after any length of time. It has also created a large tenant population that is hooked on not just below market rents but rents that decrease in real terms every year.
OK, but some level of catch-up hs to be allowed for it to work. Otherwise less-than-normal rents will be there forever.
Actually 60% of CPI means rent decreases over time in real term. What a deal!
Lol: 2/1 units near Dolores Park were going for $2700 not $1700 in 2006. Come on…
My wife and rented a smallish 2 bedroom ( maybe call it a 1.5 bedroom) near Dolores Park in 2006 for 1950 with parking
Just left it actually
And our rent was never raised
Actually just asked my wife. Original rent was $1950. We got the parking a year or two in for an extra $75
You had a great deal. Your landlord was losing money each year in real terms. However, things change and hopefully you opted for purchasing your own home. Otherwise, there is no such thing as a lifetime lease at below the rate of inflation (as much as some would hope). Eventually, the arrangement becomes unstable and something has to give.
what do you mean by “losing money”? If a building sold for $400/sf, a sub-2000 rent for a 2/1 is not a bad rent to collect.
“losing money” means that your profit (if any) from the building declines each year. While your cost for the building remains static, your taxes increase 2% per year, your insurance generally increases, maintenance costs increase (especially now with contractors in short supply), and not to mention the purchasing power of your profit is eroded by inflation.
So while your revenue remains constant, your profit is declining each year.
Yes, they’re leaving money on the table. I guess you can call it losing money.
There are a number of people who have been in the building for 30+ years who paid nothing. We were not nearly the best deal
But the family had owned the building for generations so there was not a lot of stress in the situation either.
I think the landlord liked me and my wife in particular because I was a semi-local and went to Catholic school and liked the Giants.
Seriously though if my landlord was so concerned about “losing money” he could have raised our rent but never did
It felt like an old school situation compared to the way it is now. If he needed me to help out with something simple on the building because he couldn’t make it over I was happy to help. When my kid was born he gave us a present. Really lucked out to have lived in that building.
Yes, that is most definitely an old school situation. It really only works when the landlord inherits a building or bought it so long ago that their cost base is insignificant. Of course, Prop 13 helps too. Otherwise, from an investment standpoint it is very difficult to make landlording work in SF unless you plan to benefit from the market appreciation of the building. And the market value of many smaller buildings is really only based upon the assumption of tenant turnover, often times involuntary.
Yes, appreciation is key in current ROIs. About tenant turnover it is almost completely a question of luck. It you rented out right before market rent soared, you’e likely to see this tenant stick around due to 1) the good deal he now has and 2) the likely increased difficulty for the tenant to move up. People will rent all what they can afford. If the market greatly changes in a short amount of time, chances are your tenants cannot afford to move out.
I said “almost” a question of luck. Some people have “turnover control” almost down to an art. With the large demand a few landlords will select candidates based on other things than ability/likelyhood to pay the rent. They’ll figure who’s likely to start a family, to buy, to put down roots in your place, etc… Discriminating against the elderly or a certain social background is illegal nonetheless it is done all the time. Try and rent a place if you’re close to retirement… A 58-y-old friend just got “kicked out” from the whole house he rented (the landlord doubled the rent) and had to resort to buy across the Bay because no one would rent to him despite his great financial situation.
Really? I visited one at 1700 with a one car parking. The building was a bit funky and it’s a corner unit. But that’s typical of the rental pool we saw
you obviously were not around in 2006. $1700 is totally in the right ballpark.
Hard to imagine that today, right? I rented a whole 3/2 house in prime NV in 2007 for much less than 4K (arm’s length deal). The house needed a paint job and heating was horrible, but today you’d rent a 2/1 apartment for the same money.
Keep rent control in SF. Only makes me richer. There is only one thing a landlord has to learn in SF: how to select tenants that won’t be hanger ons, namely the young and upwardly mobile. Everyone else, fugrtaboutit! Cha-Ching!
SFrentier – I’ve been seriously considering doing corporate rental with my unit. Does that sound like a reasonable plan to avoid long term squatter renting?
I have been doing it more than a year. Net income is roughly the typical upper range rent after utilities, downtime and such. But no sticky tenants and only good guests so far. Airbnb being a feedback/reputation system it takes a bit of work and dedication, not the absentee landlord situation that rent control creates. Then again you get to follow things very closely which is a good thing sometimes.
It can be. Takes much more effort though. And to be legal, I think you need to rent out for 30+ days, or you take your chances on doing airbnb illegally. The law on that may be changing soon though.
Also keep in mind, if tech hits a downturn I believe that corp rentals will be one of the first things to be impacted.
The comments on this site have quickly devolved into SFGate levels of stupidity.
yeah, like seriously.
Like, why?
So, people that get displaced from SF, presumably go to Oakland. When they move to Oakland, and pay higher rent, they are Gentrifying Oakland. Why is it all of the sudden okay to gentrify in Oakland but not in SF?
Ah, maybe because Oakland is ripe for gentrification? Just a thought.
How can improving ANY city or neighborhood be a negative thing?
I’m w/ you 100%! I was messing with the people that complain about gentrification so much in SF!
They sure do. It’s the Socialist eat-the-rich crowd.
Thanks!