Rents Blog: Market rates for rentals jump
Rents Blog: Market rates for rentals jump
The going rate to rent in Alameda rose faster than in the Bay Area as a whole. Charts courtesy of RealFacts.
The average market rate of Alameda’s rental housing has risen more than 18 percent over the past 12 months, data obtained by The Alamedan show – faster than market rents in Alameda County and the Bay Area as a whole.
Asking rents in Alameda have risen 18.4 percent over the past 12 months, compared with 11.6 percent in Alameda County and 11.4 percent across the Bay Area, data released by the Novato-based research firm RealFacts show. The average market rent in Alameda in the third quarter of 2014 was $2,057, the data show, topping rents in Alameda County as a whole for the first time in two years.
The going rate for studios monitored by the firm went up 20.5 percent over the past 12 months, while the cost of three-bedroom units rose 36.1 percent, the data show. The numbers are based on data collected on nearly 3,000 rental units here in buildings with 50 units or more.
Overall, the increase is the second largest the Island has seen in the 21 years the research firm has been collecting data, rivaled only by a 23 percent spike between 1999 and 2000, a separate batch of data that list the average market rate for rentals from 1993 to 2014 show.
A growing economy and booming job market have propelled the rise in rents across the Bay Area, RealFacts’ Nick Grotjahn said. He attributed surging Alameda rents to “higher rents in adjacent areas (San Francisco and Oakland) coupled with Alameda’s relative affordability and proximity to these areas.”
Alameda rental units studied by the firm are nearly 97 percent occupied, a rate Grotjahn characterized as fully occupied. Occupancy of Alameda’s rental units grew to a high of 98.4 percent in 2000 before dropping to 87.5 percent in 2007 and then rising to its current rate, RealFacts’ data show.
The high demand for housing here could equal even higher rents in the future, Grotjahn said.
“Unless we see some relief in renters becoming homeowners (decreasing demand) and new development coming to the market (increasing supply) it looks like landlords will have the upper hand in pushing rents in the near future,” he said. “As rents continue to increase, we’ll see a pattern of migration to more affordable housing further and further from employment centers.”
Nearly half of Alameda’s residents are renters, U.S. Census data show.
Renters and their advocates have said they’re experiencing rising rents, and many have said they fear they will be pushed out of Alameda by higher rent costs.
“The numbers show people who are the backbone of this community are being pushed out. It also illustrates that, along with the urgency of curtailing rising rents, we need more housing, both affordable and market rate,” said Laura Thomas of Renewed Hope, which has advocated for more affordable housing in Alameda. “We have worked with landlords who recognize the rental crisis and want to help. I hope the new council will join us in working to stabilize housing for both long-time residents and newcomers.”
But landlords said the numbers don’t offer a true reflection of what people are paying to rent in Alameda.
Don Lindsey of Gallagher & Lindsey, whose firm manages more than 1,000 rentals, said his firm rents studios for between $1,100 and $1,200 a month and one-bedroom units for between $1,500 and $1,600 a month. And he said renters who have lived in a unit for one or more years are typically paying less than the current market rate.
“The market rent is not necessarily what the real rents is for the tenants in the complex,” Lindsey said. “Very typically, they’re 20 to 30 percent below what the market rent is.”
Doug Smith of Fuller Enterprises, which manages 2,000 units across the Bay Area and a 63-unit building here on the Island, said the new number doesn’t reflect earlier years when rents were effectively flat. RealFacts’ data shows rents dropping slightly in 2009 and 2010 and remaining flat for 2011 before rising over the next three years.
While Fuller gave its tenants rent increases of up to 12 percent this year, the average increase over the past 10 years was 2.9 percent, he said. And Smith said renter turnover in his company’s properties has been low because market rents in the Bay Area are high and that many of his existing tenants are paying rents that are below market rate.
“The market dictates the rents. We don’t dictate the rents,” Smith said. “It’s not as ridiculous as people are making it out to be.”
Angela Hockabout of the Alameda Renters Coalition small households are staying put due to the high rents. But Hockabout, who noted that Alameda lacks rent controls, said she's seeing families pushed out of two- to four-bedroom units by rent increases of 10 percent or more, and they're facing a tight market that offers few choices for replacement housing.
"Landlords love to say that it's 'just business' or it's 'the market,' but it doesn't change that landlords are making decisions that devastate families and Alameda needs stronger laws to balance the overwhelming amount of power that they have so that renters can feel secure in their homes," Hockabout said.
Alameda renters and landlords are engaged in a community process to discuss rent issues here and consider possible solutions to bring before the City Council. The council is expected to receive a report on the participants’ findings sometime in January.
While Vice Mayor Marilyn Ezzy Ashcraft and City Councilman Tony Daysog have expressed interest in fully exploring rent issues and possible solutions, Mayor-elect Trish Spencer has said she thinks the city’s Rent Review Advisory Committee is adequate for handling landlord-tenant disputes and Councilman-elect Frank Matarrese has said he doesn’t think the city has a role to play in addressing rent costs.
The Rent Review Advisory Committee offers a forum where landlords and tenants can voluntarily go to hash out rent disputes.
In addition to the charts displayed above, we’ve created a series of graphics based on RealFacts’ long-term market rent data.