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Average Rent in San Francisco Has Dropped $1k This Year
- flashyfaffe2 6y agoIs the control rent rule applied in SF preventing Also play in that case?
- chrisseaton 6y agoIt looks like the house in the background is being constructed literally from sticks and cardboard.
- Swizec 6y agoYou don’t want to use brick in a seismic zone, reinforced concrete is overkill for a 2 storey house, and steel frame is not just overkill but also uses sticks and cardboard for nonstructural components. As far as I can tell, almost every building in western USA that isn’t tall is wood frame construction. https://en.wikipedia.org/wiki/Framing_(construction) https://en.wikipedia.org/wiki/Framing_(construction)
- iaw 6y agoThere's a growing concept of 'mid-rise' woodframe construction as well due to how the codes are written.
- throwaway201103 6y agoYep, first (ground) floor is concrete with a slab "roof" and then a four-story stick-framed building constructed above that. Ground floor is either retail or parking. I guess they pass fire code but they look like tinderboxes to me.
- oblio 6y agoIsn't this the case for most of the US, not just the West Coast?
- wil421 6y agoWe do not frame our houses with stones in the US. It’s not cardboard it’s OSB[1] (Oriented Strand Board). The US and Canada make most of it. [1] https://en.wikipedia.org/wiki/Oriented_strand_board https://en.wikipedia.org/wiki/Oriented_strand_board
- chrisseaton 6y agoWhy don't they use reinforced concrete since they're in an earthquake and fire zone? This wood seems so temporary.
- kansface 6y agoThe numbers don't pan out until for buildings with fewer than 5 floors or so. I don't know the street, but this will almost certainly be a 3 story house, max.
- Tiktaalik 6y agoLots of historic reasons for why Canada and the USA build with wood, but beyond that and going forward, I expect we're going to see even more of a pivot toward wood buildings as both countries try to meet their climate goals. Concrete is a big CO2 emitter while wood is CO2 storage.
- chrisseaton 6y agoI wonder how brick adds up?
- Tiktaalik 6y agoHm. No idea. Probably the worst material for the earthquake zone cities on the west coast tho.
- hrdwdmrbl 6y agoInfinity minus $1k is still infinity ;)
- SllX 6y ago> the weighted average asking rent for an apartment in the city, which currently measures around 2.3 bedrooms when counting a studio as having one, has dropped to $3,100 a month. Still too high. Was checking into apartment prices earlier in the year and it is amazing the number of landlords that will try and sell you on a “kitchen” that is a mini-fridge, tiny sink, microwave and a hot plate whilst still charging you full rent. San Francisco’s rental market is a good lesson in how supply and demand informs pricing that the residents and the Board of Supervisors alike continuously and willfully ignore.
- NineStarPoint 6y agoDo they ignore it, or are they using it for their own gain? For people who actually own property in San Fransisco, consider how enriched they have become by the obscenely rising rent/real estate prices. This comes along with them getting to keep their neighborhoods static instead of having to have a gigantic shadow erected across the street. Sure there are downsides, but you can always just sell and get our with a pretty sweet paycheck before those come to bite you.
- metalliqaz 6y agoi imagine the people fighting hardest are the people who bought in /after/ the rents went up to absurd prices, and thus didn't profit hugely but will take a hit if the prices fall. (see taxi medallion investors in NYC)
- whakim 6y agoIn my experience (which is admitttedly mostly anecdotal, but comes from having attended a number of public forums/planning meetings etc.) another huge group of people fighting hard against new development are the ultra-left wing of SF local politics. These people aren't against new housing per se, they are just rabidly anti-developer. They spend so much time delaying projects by trying to get developers to increase the amount of below-market rate housing in their new developments that the developer eventually just gives up because the whole process takes so long and the potential profits dwindle down to nothing.
- williesleg 6y agoIt's free on the street, you can eat and crap at will.
- PedroBatista 6y agoDrop 50% and then we can start to talk about reasonable values..
- jeffbee 6y agoYes, even at current levels the typical SF dwelling is not affordable to the typical SF income, to say nothing of the typical income of a person who works in SF, which is much lower.
- deeeeplearning 6y agoSF is still a major city and there are premiums due to that. You're talking about having rents in SF close to those in places like Nashville or Dallas which I think is totally unrealistic.
- Seb-C 6y agoThis $1k drop is more than my total rent in Tokyo for 45 square meters, close to a station and the center.
- paulpauper 6y agorenting in SF...talk about a cash incinerator
- ModernMech 6y agoYup. I was part of a startup that raised in the millions. Of that, probably 30-50% went to office rent and the rent of the employees. Might as well be a direct line from investors into Bay Area landlords’ pockets.
- Schiendelman 6y agoAnd that’s why those landlords fight tooth and nail to keep zoning restrictive.
- tolbish 6y agoIs that not what you preferred when deciding to work at a bay area startup instead of somewhere cheaper?
- kilbuz 6y agoWhy do you think people choose to do it?
- the-dude 6y agoI have somewhat inside info about a drop in rent for commercial real estate in a high end shopping street in NL ( The Netherlands ). This is unheard of, real estate owners rather keep a shop vacant than drop the rent. I think we have seen nothing yet in commercial real estate, obviously not limited to SF or NL.
- sparkling 6y agoNL as in the Netherlands?
- ashtonkem 6y agoCommercial real estate rents work differently, at least in America, because of how they’re financed. Unlike residential housing, commercial buildings are continuously refinanced. When the owner of a commercial building gets a new mortgage on their building, the potential for rent is weighed more by the banks than the current rent. The way the math works out, it’s much better for a commercial land lord to leave a unit empty for a surprising amount of time rather than reduce rent, because the impact on financing costs is typically larger than lost rent.
- justinzollars 6y agoNothing but air below current levels.
- deleted 6y ago[deleted]
- curiousllama 6y agoInteresting note: this apparently applies to 2 beds, but not 1 bedroom apartments. To me, that suggests the drop has been almost entirely people with roommates. As a result, I don’t expect property values to fall in the next year. It just doesn’t make sense to cash out low until it’s clear those people (young, mobile) aren’t coming back & won’t be replaced.
- paxys 6y agoThere has been a massive drop in 1 bedroom prices as well.
- whimsicalism 6y agoGood thing I signed right before the rent drop and can't break my lease
- djsumdog 6y agoI moved into a new downtown apartment in a major midwestern city back in April thinking this would be over by May. Now I'm stuck in a dystopian downtown. My lease is up in April though. I'm looking forward to putting everything in a POD and heading back to where I grew up in small town America. Hopefully it will help all cities go back to reasonable prices, for people who still want to live there.
- lovehashbrowns 6y agoI did the same! I likely could have extended my lease to monthly and negotiated an even better deal had I known how long this would last. I saw so many people in my building moving out, and a lot of the rooms in my floor are still empty 7-8 months later.
- packetlost 6y agoMadison? State St. (the only real 4 blocks of downtown Madison has) still has a ton of boards up from the BLM protests, and last I heard the count for closed stores this year was almost 40.
- djsumdog 6y agoWorse: Chicago.
- packetlost 6y agoOuch. If you can put up with the winters, Madison is quite a bit nicer than Chicago, even in it's current state. But, it's not really a city. Aside from 3 blocks around the capitol, there's basically no density and you're driving a minimum of 10 minutes to get to anything worthwhile. I grew up here, but I personally hate winter and can't wait to get out of this entire region.
- xyst 6y agoIf the city would rezone all of the single family homes into higher density buildings, this wouldn't be a problem. Flood the area with supply and the cost will go down to reasonable levels. This is a problem all across the nation. Everyone wants a single family home, so this leads to two things: outrageously high costs of homes, or people moving out to the suburbs and thus worsening the rush hour traffic and smog issue.
- Schiendelman 6y agoAnd a lot of people only want a single family home because they want a certain amount of living space. In a commodified housing market, they would likely pay less for that space in a condo.
- lock-free 6y agoI want a single family home because it has no shared walls and a private backyard space for my kids and dog. It's not that hard to find condos or apartments with decent floor space.
- Schiendelman 6y agoDo you understand why we’re all talking about housing? What you said seems to be a “whoooosh” moment.
- ihsw 6y ago> or people moving out to the suburbs and thus worsening the rush hour traffic and smog issue Phoenix AZ seems to handle being an enormous suburb fairly well.
- ihaveajob 6y agoHonestly I'm surprised no other city in the bay area has taken the baton and aimed to overtake SF in terms of relevance by becoming the densest, most thriving city in the region. Oakland is at least trying to cope with demand in some neighborhoods. I'm rooting for that.
- ozzyoli 6y agoDon't ask, Don't get. Everyone I know who has asked for a discount has got the discount. After several months of the pandemic, and noticing the adjacent apartment being relisted by my landlord at a discount I emailed my landlord and asked if I could have my rent adjusted by the same discount. They said yes, if I committed to another years lease. Saving 5% of rent, at the cost of a one year commitment didn't seem like a win, so I politely declined explaining my reasoning, and suggested we leave things as they are. A week or so later, out of the blue by my rent got adjusted by 10%+ instead of 5% with no need to commit to stay. Sufficed to say, if their intention was for me to stay put, it worked!
- legolas2412 6y agoI am in bay area, but my apartment complex refused to readjust rent to reflect the drop in rent (2500$ to 1800$!). I decided to break the lease and move to a better area.
- WhompingWindows 6y agoGreat on you! To complete the math, what was the "break" penalty and how much did your new rent save you? These economics are fascinating, SF is crazy.
- 0xffff2 6y agoUnless the lease had other terms written in, California generally allows landlords to continue to charge rent until the unit is rented again (or the end of the lease term).
- Mc91 6y ago> there are still over three times as many apartments currently listed for rent in San Francisco than there were at the same time last year with an overall vacancy rate that’s ticked up to around 10 percent (and climbing). In terms of prices, rent is "sticky" whereas the price of something like apples is not. Meaning if apples are not selling, the price is cut quickly. Rent prices go down slower, but high vacancies and high supply are a leading indicator that prices will go down more.
- bwest87 6y agoOakland relaxed a lot of zoning, and permitting regulations about 5 years ago, and so now you're starting to really see production sky rocket. This article [0] mentions 2019 was had 15x more units completed than 2018. And 3x the total units from 2013-2018 combined. Anecdotally, I have several friends who've all moved to Oakland in the last year or so. It will be interesting to see how this plays out, and maybe, hopefully, SF will take the hint. [0] - https://www.city-journal.org/oakland-rezoning-california-housing https://www.city-journal.org/oakland-rezoning-california-hou...
- klipt 6y agoI think SF has already taken the hint that they can outsource their residents to Oakland. Residents strain the city budget via things like public schools. Businesses put money into the city budget via gross receipts taxes. SF wants the businesses but is very happy for residents to live elsewhere.
- lumost 6y agoCT went this way as well, eventually the businesses look to follow residents - particularly younger residents who can't afford the inflated rent or down payments.
- lotsofpulp 6y agoCT has a different problem, they kicked the labor expenses 30 to 50 years into the future via underfunded defined benefit pension benefit, retiree healthcare, and other deferred compensation. They don’t have a tier 1 city which people are willing to pay a premium to live in, and the taxpayers today are balking at paying for labor performed decades ago. I’d be wary of starting a business subject to a relatively deeply indebted government if I had other options.
- gen220 6y agoCan you expand on this? Did CT follow Oakland, where SF is NYC? Or if CT is SF, where is the corresponding Oakland? I live in NYC, and my view of CT is that its modern identity is dominated by being a suburb to NYC, with a handful of big and old businesses in the big cities to keep domestic economy afloat. The places in my mind that don't fit this model are all east of New Haven, at which point CT starts to be "Coastal New England", a region that, excepting Boston, continues up to Bar Harbor, ME. But my view is obviously biased by my limited experience, I'm curious to hear more of your perspective.
- Simulacra 6y agoIn the Noe Valley rent is still pretty darn high. While that is to be expected in this area, a lot of people have moved out and the neighborhood is a little vacant. With the massively high rents I imagine most landlords paid off mortgages, so could these expensive properties remain empty indefinitely?
- fapi1974 6y agoNoticed the same - Noe's feeling like a ghost town.
- Triv888 6y agoYou need to rent a coffin space in a Carvana car[1], a bit like what they do in Japan[2]. 1. http://media.culturemap.com/crop/65/17/633x475/Carvana-vending-machine-Austin_141320.jpg http://media.culturemap.com/crop/65/17/633x475/Carvana-vendi... 2. https://montaraventures.com/blog/wp-content/2008/06/coffinhotel.jpg https://montaraventures.com/blog/wp-content/2008/06/coffinho...
- pm90 6y agoCan confirm this anecdotally. My rent dropped by about that much, as did that of my friend.
- robbyt 6y agoDear SF, More apartments built will not help make housing more affordable for normal people. Learn about the NYC real estate market- even pre covid apartment vacancy was extremely high, and the true numbers are unknown because building developers are manipulating the market by releasing units slowly. With all the excessive inventory in NYC, you'd think that a normal person (defined by median income) could afford to buy... But it's still not possible here.
- shortandsweet 6y agoWhat should we do robbyt?
- cogman10 6y agoTaxing unoccupied homes and apartments will fix things real fast.
- entee 6y agoReally hard to do. Not because it’s a bad idea but because it’s hard to identify a vacant apartment. One example using utility bills as proof of residence can be gamed by paying people to go turn on the lights for a while. How can you tell that the property is actually empty?
- kungito 6y agoIt's such a simple solution which would never pass almost anywhere in the world
- eeZah7Ux 6y agoNetherlands had laws discouraging speculators and hoarders from keeping empty homes: https://en.wikipedia.org/wiki/Squatting_in_the_Netherlands https://en.wikipedia.org/wiki/Squatting_in_the_Netherlands
- cogman10 6y agoIt's already passed in SF for retail [1] and other areas for non-retail. Further, the revenue from that tax could be used to fund public housing to further drive down housing costs. [1] https://www.bookweb.org/news/san-francisco-approves-vacant-property-tax-576734 https://www.bookweb.org/news/san-francisco-approves-vacant-p...
- deleted 6y ago[deleted]
- diveanon 6y agoDoes this mean that cost of living will stop being the everyday boilerplate conversation I have with every bay area resident I have ever met?
- nelsonenzo 6y agoDoubt it. I moved to SF in 2001 and that conversation had already existed for 20 years and continued forward for 20 years. The second prices become reasonable again, tons of folks will happily move to SF because of the weather, parks, pleasant social norms, etc. And once those folks move in, the price goes up again. It's a never ending cycle.
- notsureaboutpg 6y agoPleasant social norms... in SF? I must have lived in the wrong SF for 5 years...
- da02 6y agoIf you live in San Franscisco, have you noticed crime going up or staying the same?
- jeffbee 6y agoIt is mixed with most categories of property crime up and most kinds of violent crime down compared to 2019, except homicide which is up a bit but the denominator is small. https://www.sanfranciscopolice.org/sites/default/files/2020-12/SFPDNovCompstat.20201211.PDF https://www.sanfranciscopolice.org/sites/default/files/2020-...
- diogenescynic 6y agoProperty crime is way way way up. Violent crime is down overall due to just less people being there, but the violent crime rate/% is still higher than before. I saw somewhere that you’re more likely to be assaulted on BART now.
- dredmorbius 6y agoThis is going to have a knock-on effect for banks, mortgages, and asset valuations, which could get interesting.
- JoshTko 6y agoBoston apartments has dropped about 20% at the upper end.
- schwax 6y agoApartment List did an interesting analysis examining how rent dropped this year as vacancy rates increased https://www.apartmentlist.com/research/vacancies_and_rents_2020 https://www.apartmentlist.com/research/vacancies_and_rents_2...
- pearjuice 6y agoSo if you want to live in SF with kids you'll have to pay at least 3000$ per month. Is the pay scale there just completely inflated for non-tech jobs due to the tech jobs and if not, where do the policemen, teachers, cleaners and so forth live? I can't imagine them earning a salary in which paying 3000$ per month is sustainable? Where do all people with "normal" jobs live?
- ransom1538 6y agoWalnut Creek. Etc. They use the Bart to commute in from far away. But do remember a police officer can make 100k a year + they might marry a police officer.
- chii 6y agoSo those jobs gets un-filled and whoever that hires/pays for those jobs will need to raise the price for said jobs. This will re-attract people back because it is now possible to live off the higher pay for such jobs. Ad-infinitum as the market determines the price.
- Der_Einzige 6y agoAnecdotally, I was successfully able to negotiate 1300 off my rent here in the peninsula. I was paying 4500 for a 3 bedroom, nice mid century modern before COVID. After February, I will be paying 3200 for at least another year with an optional 2nd year at the same price. It's a good time to be a renter here. The prices are now so low on renting, that my plan to eventually buy a house farther north (Oregon or California) is now put on hold while I muster up a bigger down-payment.
- bradlys 6y agoApartments are getting cheaper. I’m not seeing houses getting cheaper in the rest of the bay. Renting a house where I live in the peninsula is about the same cost as it was a year ago. Maybe 10% less. Basically, anything sharing walls or space is going down but not the other stuff...
- kccqzy 6y agoThis is also what a realtor told me. People working from home means they need bigger spaces, and COVID means they need these spaces by themselves, not shared with other people. IIRC condos haven't been selling well but houses certainly are.
- wallacoloo 6y ago> COVID means they need these spaces by themselves, not shared with other people. Definitely curious to see data to back that up. I’ve seen a couple friends who used to live alone move into shared housing during the pandemic because they craved more social contact than they could get living alone. I don’t know anyone who’s moved from shared housing to solo housing in this time. Movement away from single-person housing lines up with the price pressure you’re seeing, too: small apartments losing value; houses not losing as much.
- sn_master 6y agoEven in Seattle/Redmond so many people have relocated to cheaper places if they can WFH.
- tibiahurried 6y agoThe title is misleading, it should be "average rent in SF downtown ... " . I have been monitoring craigslist/zillow for the last 2 years or so in finding of a good deal, that I eventually found. Yes, it took that long! I noticed that although apartments stay listed for months, their price hardly drops; at least in more residential areas. Eventually, some will lower by just as little as ~$100 after ~1 month of listing. I think landlords prefer to keep the units vacant rather than adjust the rent. They think/hope things will go back as they were next year. Honestly, I would not be surprise if they do. Though, they perhaps confuse stock market with real economy. That said, newer, remodelled, bigger (+office) units go almost immediately. The average old SF dump stay listed longer. No surprises there.
- monocasa 6y agoRent will jump back up just as soon as the vaccines are out and the people who moved to Boise or wherever this year can go back to restaurants they're missing without it making them feel sad.
- chrisseaton 6y agoMaybe the places they moved to will get their own high-quality restaurants and we'll all be better off?
- monocasa 6y agoProbably not. The labor force ecosystem behind those got hung out to dry this year and overwhelmingly don't have the capital to move. It's the upper (and upper middle) consumption class that could move on a whim, and will move back on a whim.