New Rental Units Too Pricey for Most Renters

New Rental Units Too Pricey for Most Renters

Much of the recent multifamily construction has focused on the luxury segment, which is pricing renters out of the market, according to Harvard University Joint Center’s 2015 State of the Nation’s Housing Report.

The rising costs in multifamily development pushed the median asking rent for newly constructed rental units up to about $1,290 per month as of 2013. That marks an increase of $180 compared to 2012, according to U.S. Census Bureau data.

Meanwhile, the typical renters’ incomes rose by just $60 a month, going from $32,000 in 2012 to $32,700 in 2013, according to the American Community Survey.

In order to afford a standard new multifamily unit, a household would need to earn at least $51,440, according to JCHS. Less than a third of renters, however, earn this much.

In some areas, rental costs are even higher. JCHS’ report notes that 84 percent of new multifamily units in the Northeast and 67 percent of those in the West went for a monthly rate of $1,350 or higher in 2013. In fact, many units built in 2012 to 2013 rented for at least $2,000 per month – which would require an annual salary of at least $80,000.

In the South and Midwest, new units rented in the $1,350 range were only about a third of growth, which indicates a more even regional supply of new units by price.

“While new multifamily construction is easing some of the demand for new units, it is currently not sufficient to ease the broader affordability problems facing renters,” notes Elizabeth La Jeunesse, a research analyst, at the JCHS’ Housing Perspectives blog. “Closing the gap between what it costs to produce this housing, and what economically disadvantaged households can afford to pay, requires the persistent efforts of both the public and private sectors.”

Source: “New Multifamily Construction Is Out of Reach for Most Renters,” Harvard University Joint Center for Housing Studies’ Housing Perspectives Blog (July 30, 2015) DAILY REAL ESTATE NEWS

I read this article at: http://realtormag.realtor.org/daily-news/2015/08/04/new-rental-units-too-pricey-for-most-renters?om_rid=AACmlZ&om_mid=_BVwQu3B9EOtOGt&om_ntype=RMODaily

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County rents jump — again

County rents jump — again

February 02, 2015, 05:00 AM By Austin Walsh Daily Journal

As rents continue to skyrocket throughout the region, housing experts say San Mateo County residents should not expect to see relief in the near future.

In the past year, average monthly rents in the fourth quarter increased $227, jumping to $2,572, according to reports from according to RealAnswers, a group that compiles apartment data.

During the fourth quarter in San Mateo, studio apartments increased by an average of $193 from last year, to $1,762 per month, marking a 12.3 percent increase. One-bedroom apartments with one bathroom increased by 10.3 percent on average to $2,332 per month, up $218 from 2013. And two-bedroom, one-bathroom apartments increased $181 per month, to $2,593, a 7.5 percent increase from the previous year, according to the report.

But some renters have seen increases as substantial as $600 in a year, said Josh Hugg, program manager at the Housing Leadership Council of San Mateo County.

Hugg and other advocates for renters promote policies that protects residents from exorbitant rates or increases.

“We need more affordable housing,” Hugg said.

Well-paying technology jobs are frequently cited for driving up costs across the region, but Hugg noted that for every job created in the tech sector, there are multiple support workers who are finding it increasingly difficult to live locally.

“When we bring in all these great jobs, they are creating jobs of more modest means,” Hugg said. “We are not making a place for them, even though they are the fastest growing part of the workforce.”

Some residents are being priced out of their homes, and are forced to move back in with their families to afford the cost of living, said Sally Navarro, a rental, sales and property management Realtor for AVR Realty in Burlingame.

“Everyone is piling in until they find something. Folks are just waiting it out to see what’s going to happen,” she said.

But the outlook is not optimistic for those hoping to see prices drop, she said.

Navarro, who has worked in the local rental industry for nearly three decades, said she has never seen a tougher rental market than what is currently available.

“I don’t see that it’s going to get a lot better,” Navarro said.

The best that renters might hope for is that rates level out from their constant incline. Navarro said that she has not seen rents decrease since the dot-com bubble burst around the turn of the century.

She said that the feeling of dissatisfaction with expensive rents is prevalent throughout the county.

“People are extremely frustrated,” she said.

But it’s not bad for everyone involved in the housing industry, said Navarro.

“I think landlords are very lucky right now,” she said. “They have been reaping the benefits for quite a while.”

But she expressed compassion for those who are trying to find a new place to live in the current market.

“I feel bad for tenants. We don’t know how it’s going to go, or when it’s going to change. In the meantime, we have people looking for places and there is nothing out there. It’s really frustrating,” she said.

Those interested in landing a new place should bring all the preliminary paperwork with them to the appointment, and be willing to pay more than the market rate, Navarro said.

Though the region has reaped the benefits of being a globally acclaimed hub of innovation and is seen as a gold mine for people across the globe, Hugg said the success has come at a substantial cost to those who have lived in the region for years.

“We are a victim of our own success,” he said.

 

I read this article at: http://www.smdailyjournal.com/articles/lnews/2015-02-02/county-rents-jump-again/1776425137606.html?interaction=normal

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Good News for Landlords: Rents Still Rising – Bad News for Tenants

Good News for Landlords: Rents Still Rising  –  Bad News for Tenants

The article below is both good and bad news.  For investors, whom have scooped up deals on the San Francisco Peninsula through the bust, they are raking in the gold with high rents.  For the rentals properties I service, it’s been amazing to see the increase in rent year over year.  But demand is there – and with few homes to buy – the rental market is booming.

For those who are renting, they cringe when they see a letter from their landlord in the mailbox.  Several clients of mine have emailed me this year concerned that their rent went up.  Some as little as $50 – other a more substantial jump.  These renters are the first time buyers of the future.  Skipping dinners out to stash away cash for down payments and closing costs.  And around here – where the median home price starts at $800,000 – we’re not talking pennies and dimes that need to be saved.

Right now the cheapest rental listed on the Multiple Listing Service is a 3 bedroom 1 bath home of about 1050 square feet in the Buri-Buri area of South San Francisco – asking rent is $3,000.  The most expensive rental is a dated but spacious 3 bedroom 4 bath home of close to 4000 square feet in Portal Valley asking for $9,500 a month.  The median rental listed today is a 3 bedroom 2 bath condo in Menlo Park listed at $4,250 a month.

Suddenly that $50 rent increase doesn’t sting as much.

But the word is out – the Bay Area is a wonderful place to live and we’re all paying for it now.  Enjoy this article below…

 

Good News for Landlords: Rents Still Rising

 

Average rental prices have ticked up nearly 4 percent nationwide, according to the latest TransUnion Rental Screen Solutions industry report of data collected from property managers in September 2012 and September 2013.

Rents were on the rise for all four of the classifications of rental properties that TransUnion analyzes: newer institutional properties; older institutional properties; older properties in less desirable areas; and older properties in less desirable areas that are in need of renovations/updating. The average rent of all four types of properties was $1,072 in 2013.

The largest rental increases were seen in properties that were in less desirable areas that need renovations, up 4.2 percent to an average of $693.

“The rental market continues to be strong as demand for rental units remains high while consumer credit risk slowly improves,” says Michael Doherty, senior vice president of TransUnion’s rental screening solutions group. “The combination of improving rental risk scores and continued demand for rental properties is particularly good news for property managers. … When the credit risk of the population improves, property managers may be more inclined to tighten their criteria to ensure they are getting the best possible resident. This is integral because a resident who ‘skips’ out on a lease can cost a property manager thousands of dollars in lost revenues.”

By: DAILY REAL ESTATE NEWS

 

I read this article at:  http://realtormag.realtor.org/daily-news/2014/01/28/good-news-for-landlords-rents-still-rising?om_rid=AACmlZ&om_mid=_BS6BpXB838Asq2&om_ntype=RMODaily

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Roaring Rentals…

When Susan read this article one morning over coffee – I just about dropped my cup. As full time Realtors we are well aware of the hot rental market – having just rented a unit out for a client in under a week. However, when I heard this – even I was surprised. Enjoy this article from the SF Chronicle – I enjoy Carolyn Said.

Rents soaring across region

San Francisco rentals were a different world when Chuck Post became a leasing agent – just four years ago.
“In 2009 we were actually discounting rents, offering things like a free month’s rent when you moved in, perhaps throwing in free parking,” he said.
Those days are long gone.
Now as the economy roars back, his listings draw long lines of wannabe tenants, and apartments get snapped up in less than a week.
Rents in San Francisco are escalating at breakneck clips this year, largely driven by an influx of tech workers. Oakland and San Jose likewise are seeing steep run-ups.
San Francisco’s bigger apartment complexes saw average asking rents break the $3,000 mark in the third quarter, hitting a record $3,096 across all size units, according to data service RealFacts. That’s an 11.9 percent bump from the same time last year.
Median asking rents for San Francisco apartments listed on http://www.livelovely.com clocked in at a record $3,398 in the third quarter, up 21 percent from 2012, said apartment-finding company Lovely.
“Rents are rising faster in San Francisco than almost anywhere else in the country,” said Jed Kolko, chief economist with housing service Trulia. “Rising rents are a bigger challenge than rising home prices, especially in a place like San Francisco where buying is out of reach for many middle-class and lower-middle-class people.”
Gabriel Metcalf, executive director of the think-tank San Francisco Planning and Urban Research, said the city is facing a “crisis of affordability.”
“What happens when you let a city get this expensive, is that over time, only the wealthy can live there. You lose everyone else,” he said.
A spike in evictions has spurred protests of gentrification, including one at City Hall on Thursday. Activists say San Francisco must act to maintain a diversity of income levels.
The root cause is simple, Metcalf said: “The growing regional economy coupled with decades of under-building housing.”
San Francisco’s construction boom is helping to increase inventory. But to really make a dent on the housing shortage, Metcalf said, the city would need to deliver 5,000 new housing units a year for quite some time. It’s averaged 1,500 units a year over the past 20 years.
New buildings in Mid-Market and the Mission have a two-faceted impact on rents.
They command a pretty penny, driving up the median and average rental costs.
However, some experts said the new buildings are forcing some older units to drop their prices to compete, thus giving prospective tenants some relief.
“There’s a lot of brand-new Mid-Market stuff with nice amenities and high prices competing for the well-paid tech people,” said Laura Gray, a leasing agent with Paragon Real Estate Group. “The not-brand-new units are left struggling a little bit.”
For instance, she’s listing for $2,900 a one-bedroom at a 6-year-old luxury building near AT&T Park and Caltrain.
“A year ago, this would have rented for $3,500,” she said.
Other agents said that there remain plenty of wallflower apartments, either because they’re in undesirable areas or overpriced.
But that’s cold comfort to the folks engaged in the blood sport of apartment hunting in San Francisco.
Rosie Simeonova and Jay Dillon thought they were prepared when they moved here from Los Angeles last month.
“We knew San Francisco would be expensive, so we upped our budget,” she said. “We knew it would be competitive, so we were very prepared with our renter’s resume, employment confirmation, credit reports, pay stubs, anything you could possible ask for.”
They quickly discovered that their $2,500 limit for a one-bedroom near Dillon’s new job at the University of San Francisco didn’t go far.
“We must have seen over 30 places,” Simeonova said. “We’d go to an open house for a little tiny apartment and there’d be 20 people on the stairway frantically filling out applications. The landlords had no leeway for renters; a lot of times they would just offer 15-minute windows to see places. It was intimidating.”
They got more aggressive. When they spotted an Inner Richmond place that seemed to fit their needs, they called the leasing agent and asked to meet before the open house, offering to sign a lease on the spot. That did the trick.
Lovely said that rents for studio apartments rose the most, with the $2,370 median up 24 percent from last year and 16 percent from the second quarter.
For all sizes of apartment complexes, Oakland clocked in at $1,595, a 15 percent increase, while San Jose was at $2,180, up 13 percent from last year, Lovely said.
For buildings with 50 or more units, RealFacts said Oakland’s average rents of $2,124 in the third quarter were up 10.3 percent from 2012, while in San Jose the $2,015 average was a 9.2 percent bump.
By Carolyn Said

I read this article at: http://www.sfgate.com/realestate/article/Rents-soaring-across-region-4924282.php

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