High Rentals

Scary-high rents are pushing us out of the Bay Area.

This past year has changed the lives of so many renters in the Bay Area since the tech companies have taken over. 

Corporations owning huge apartment complexes are jacking up the rents so high just because they can - they don't give a damn about we, who have lived here for many years and worked in the jobs that help keep the Bay Area going. 

We deserve a decent place to live without being gouged for high rents that we can't afford and will have to leave this area. People who own duplexes are jacking the rents up too high too. Who is going to cut their hair and clean their houses and gardening? Does any one care out there? 

Greed is driving people like me away from a life of living here after 52 years. Where am I going to go? I can't start over somewhere else at this point in my life. 

Please help! I know these owners want to make all the money they can, but where does it stop? Do they understand that most of us can't afford to live here because of this greed?

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Steve B January 28, 2013 at 09:04 PM
Yea it stinks.Can only get a roomate or share housing...
Lou Covey, The Local Motive January 28, 2013 at 10:58 PM
This is a perfect example of why we need to develop more residential living on the Peninsula. San Mateo county has approved the fewest number of home starts over the past three decades then any other county in the nation. And the smaller the inventory, they higher the demand and the higher the cost.
Linda Allen January 29, 2013 at 06:38 PM
I'm living in an expensive apartment. I'ts like living in a dark cave.. Had to move out of a duplex so it could be sold. I was happy in the neighbor hood for 14 yrs. My rent jumped from $1325 to $1750. People here are moving out because the corporation is raising everyone $200 more this year. It's very depressing.
Diana Reddy February 03, 2013 at 10:17 PM
Thank you, Linda. So many people have been forced out and leave without talking about why. We need to talk about why - and what can we do about it?!
Cliff Keith February 03, 2013 at 10:47 PM
OK let me see if I can explain what is going on with rentals in Redwood City. Rental properties are a business and are run as such by most landlords. Rents have not raised since the 1980's and the current up swing in rents reflect a normal market fluctuation. Home prices have escalated to a point causing owning rentals to not make any business sense. Investors will not invest in something that does not bring a profit so that s/he can stay in business. Furthermore, the investor's expenses have increased year in and year out with increases in; property taxes, fire insurance, up keep, maintenance, and add on expenses like the parcel tax that was passed last November. I understand how difficult it is for the current renters. What's going on is the law of supply and demand. With many ex-homeowners coming into the rental market, (from their homes being foreclosed on), there is an increase of demand hence the raising of rents across the board. Good news is this is only temporary as Redwood City and several builders across San Mateo County are building apartment housing at a record pace, which will increase the supply and rents will stabilize or soften. Until then rents will continue to rise. See my previous blog post on how rents are going to continue to spike in Redwood City.
Diana Reddy February 04, 2013 at 07:49 AM
Cliff: With all due respect, your comment dramatically supports Linda's post. Many rental properties in Redwood City are owned by faceless corporate rental properties with no vested interest in Redwood City. They definitely base their rent increase decisions on supply and demand - not on "property taxes, fire insurance, up keep, maintenance, and add on expenses like the parcel tax." They are able to increase rents by hundreds of dollars every few months, because companies like Facebook are bringing in thousands of employees, competing for limited housing with the teachers, nurse assistants, childcare workers, eldercare workers, postal employees, restaurant and retail workers, and other valued and long-time members of our community. Residents who have lived in Redwood City for decades are being forced out, because property owners are able to take advantage of the situation. The jobs/housing ratio is so out of balance, it would take many times the current number of units planned to stabilize rents. How sad that we are becoming a community that only values people with lots of money in their pockets.
Lou Covey, The Local Motive February 04, 2013 at 07:06 PM
Just to keep things friendly here, I'm going to agree with both of you. Cliff states the reality of business quite well. All the costs of maintaining a rental property (and I have one) go into the decisions about rent. But demand for property from places like Facebook and the ability to squeeze more money out of those properties because of it also play into it. Unfortunately the squeeze is not on the type of properties that command the lowest rents but on those that command the higher. No one working at Facebook is going to want to rent my property, or the one that Linda is talking about moving out of. The reality is that we are not going to see any kind of plateau any time soon until the inventory of homes in the mid Peninsula is dramatically increased. That means development.
Diana Reddy February 05, 2013 at 02:11 AM
Actually, over 40% of Facebook employees and other high tech companies make moderate incomes and are competing for the very properties mentioned. Such renters are reporting renting smaller units for hundreds of dollars more than ever before just so they can reduce their commutes. People making less than moderate (approx $75,000!) are being priced out. The rent charged by companies with properties on both sides of the Bay is dramatically less on the east side of the Bay, supporting my view that such decisions are based on supply and demand, not on fair increases based on fees.
Linda Allen February 05, 2013 at 06:16 AM
Diana, Thank you for believing in what I feel. When Cliff talked about the extra expenses; insurance, repairs, maintence etc. Aren't those write offs for the owner? Also more building means more traffic, polution, congestion etc. When Facebook and other tech companies build their companies, they should build apartments in the buildings for their employes that move here. I just want to find a decent cottage or duplex so I can keep working .
Cliff Keith February 05, 2013 at 07:13 AM
A little clarity, rents in 8 Bay Area Counties, (Napa County wasn't counted), increased 7.8% in 2012. San Mateo County: up 9.9%, Santa Clara County up 4.5% and Nationwide increased 5.2%. Is this right? Is it fair? Probably not, however that's what's we are facing in our economy. It's not Facebook who's the only culprit. There is several corps moving into Redwood City, i.e. Stanford Hospital, Evernote, and Shutterfly. You are 100% correct all this new building will bring more traffic, pollution et al with it. The other side of the coin would be rents doubled or tripled from where they are currently. It's a double edge sword. I fear the best solution to your plight is to buy a home. With low interest rates and some very good options out there for first time buyers and some inexpensive homes you might want to research other options other than being a renter. I believe if you jump into the ownership realm, at least you’d have a fighting chance. As for write offs, yes expenses on rental properties are able to be written off. However, a landlord has to take cash out of their pockets to pay expenses. At tax time they get roughly $0.25 on the dollar in return. Here's a post of mine on rents and where they are going: http://redwoodcity-woodside.patch.com/blog_posts/expect-the-same-for-2013-spiking-rents
Cliff Keith February 05, 2013 at 07:28 AM
Linda the above post of mine was meant for you. I haven't got this Patch thread thing figured out yet. As far as the developments being required to provide housing on their developments/ campus is a brilliant idea. This is something that needs to be address at the planning and city counsel stages of our City government. With workers being close to work they can walk, ride their bikes, or Pogo stick to work everyday with ease. Low impact on the environment, traffic flow, and housing costs. Stanford does it for their Professors so why shouldn't Facebook?
Sarah H. February 05, 2013 at 07:46 AM
The solution is to buy a home? In this city/county? In this lending climate? In this still-fragile economy? Yes, interest rates are at an all-time low. But, the amount of down-payment required, and the need to have all the picture perfect credit scores and precise income ratios is terribly daunting to a long-time renter who may have very little in terms of a down-payment or may have a "moderate" or below income. And if one wants to stay and purchase a home in this area, they are looking at a half-million plus for a tiny run down "starter" home in a questionable neighborhood. Perhaps buying a home in a depressed area far from the bay area and commuting in may work for some, but for others who want to say or who may have kids in the school system and are faced with being priced out, the atmosphere in the rental world is very scary indeed.
Cliff Keith February 05, 2013 at 06:05 PM
Sarah H, You may be right about what you said for a family with children living in Redwood City. If you believe that then it is in fact true. My comment was for Linda who indicated she wanted a cottage or small duplex. I believe she does not have school age children to worry about and really only want a basic element of life…shelter. Today on MLS Broker’s Tour there is a condo in San Carlos, off of Crestview Dr. at 3295 La Mesa Dr. #3 (Good safe area). It’s a one bedroom, one bath, with a 1 car carport and is listed for sale at $299,000. It seems Linda may fit into this home nicely based on the criteria she mentioned in her posts. So what would it take for Linda to buy this condo provide she liked it? I have crunched the numbers and this is the best ESTIMATE for purchase of this home. End of part 1 of 2 on this topic...
Cliff Keith February 05, 2013 at 06:10 PM
Please just listen to the “music” not the individual “notes” as this is only an ESTIMATE and a mortgage consultant would be able to give a more precise ESTIMATE. I am assuming Linda is debt free, has a job making at least $46K/ year, and has a FICO score above 670. This ESTIMATE is based on a FHA loan with 3% down ($8,970), 30 year fixed rate loan, no points, at the current rate of 3.25%. Monthly costs: $1,262 - Principle and Interest $ 300 - Taxes $ 40 – Insurance (ALL FIGURES ARE ESTIMATE ONLY) $ 300 - Mortgage Insurance Premium (M.I.P.) $1,902 = Total P.I.T.I. and M.I.P.* *This ESTIMATE doesn't include the Home Owners Association Dues or any additional costs such as inspections or a home protection packages. For Linda it may be possible for her to get out from under her landlord’s thumb. For you Sarah that may be a different story. I don’t know. There are other ways to buy a home beside the method mentioned above. Lease option is one way. Joining or starting an investment club who sole purpose is to buy homes low, fix them up, and sell high until all the members have their own homes. The real estate market in Redwood City has been one with an upwards trend. Read what has happen the past 10 days in Redwood City. Go here for an explanation: http://SFBayHomes.com. End of 2 of 2
Cliff Keith February 05, 2013 at 06:20 PM
I forgot one thing. The tax savings would be approximately $2,600/year off her gross income or a $217 per month savings putting her real monthly PITI and MIP at $1,702. One again these figures are only ESTIMATES. (After 37 years in the business I know I am pretty darn close though.) Speak with your accountant or CPA for your accurate number.


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