7 ms·

San Francisco rents increased by 13.5% in 2014

23 points by dbg067 12y ago

tn13 12y ago
My rent increased by 9% last year. This year it is increased by another 9%.
- alex_duf 12y ago
  Your rent will double every 7-8 years if it keeps increasing that fast.
  - ryanklee 12y ago
    > if it keeps increasing that fast Any reason you can give that it would?
    - alex_duf 12y ago
      If the tech bubble doesn't pop ?
Pro_bity 12y ago
I would love to say this is shocking, but it has become routine to see double digit percentage increases in San Francisco rents. I am curious to see if the increases were as extreme outside on the city.
s_m 12y ago
That's believable, but they don't cite a source…
jdhawk 12y ago
Austin isn't much better. We have a 9% jump in the last 6 months. http://www.rentjungle.com/average-rent-in-austin-rent-trends/ http://www.rentjungle.com/average-rent-in-austin-rent-trends... http://kxan.com/2014/08/01/austin-hottest-real-estate-market-in-the-us/ http://kxan.com/2014/08/01/austin-hottest-real-estate-market... While these seem like peanuts for Coaster's, its having a pretty huge effect on long time residents. We're undergoing a building boom that feels insane.
- gojomo 12y ago
  An actual building boom offers better hope that at some nearer point, the rent increases will pause and reverse.
  - jdhawk 12y ago
    You'd think so, but the last 3 years have not brought relief...I'm not complaining about housing prices - I've owned for a while, but I feel for my renting friends. Traffic on the other hand...that's something to complain about
- CoreSet 12y ago
  As someone on the inside, I'm sorry to say it's going to get worse before it gets better. But there is a real chance, that in a few years, we'll see some moderation, as Millennials fail to replace the last crop of new homebuyers and current values fall. That's what I'm hoping for, at least.
- CoreSet 12y ago
  And I second your thoughts. Transplants from the coast still think it's an affordability paradise, but for someone who's grown up here all his life, the picture looks bleaker. I just hope we don't become SF!
FreakyT 12y ago
It continues to strike me as odd that there isn't more focus on building high-density highrise housing in SF. Is this related to earthquake danger, historical preservation, idiocy on the part of local politicians, or some combination of these?
- walshemj 12y ago
  NIMBY Squared
- tn13 12y ago
  The local politicians and their votes are mostly s. The rent control laws have made affordable housing rare but luxury housing and office spaces reasonably priced. The problem is further compounded by the zoning laws, parking space related laws and the local community which is consistently voting against any housing projects to make sure their property rates do not go down because of increased supply.
- batbomb 12y ago
  Established and older residents, especially those without children, see no reason we should be "Manhattanized" so more people can live here. They "like SF just the way it is, thank you". If you don't have kids, and you have rent control, you never really need to upgrade your 1BR apartment once you got it. Secondly, there is no upzoning, and subsequently no increase in density, without eviction, thanks to the rental market. Evictions aren't popular. The Tenderloin is completely insulated from any of this. Historical preservation is bogus, but has a history. The reason that some people argue for largely have to do with the projects in the Western Addition, which bulldozed a bunch of victorians to make what most people consider an eyesore. Local politicians don't really care too much. The reason being is any action they take pissed off established residents, who voted them in. That's changing a bit, as more people feel the pressure of the rental market and evictions. Still, there's more of an attempt to protect people who are established then there is an attempt to accommodate those who actually need housing, especially those in the middle class.
- discardorama 12y ago
  And, to add to what everyone else said: there are out-of-towners who are buying up this newly-built property; either as a place to stash some cash (people from China, Russia), or as a crashpad for when they come in to town (from other parts of Bay Area) for an event or something.
sarciszewski 12y ago
http://www.miniwebtool.com/doubling-time-calculator/?r=13.5 http://www.miniwebtool.com/doubling-time-calculator/?r=13.5 At this rate, rent will double every 5-6 years.
- ryanklee 12y ago
  > At this rate Be wary of any trend extrapolation. Better to figure out the dynamics underlying changes. In this case, the rate will change way before rents have the chance to double. Rental markets are cyclical. In simple terms: They go up; they become unattractive to renters; they go back down.
  - 7Figures2Commas 12y ago
    There's no doubt that in many areas, including the San Francisco Bay Area, the current trend is not sustainable. But I think you're underestimating some fundamental shifts that have taken place that will put a floor under rents. First, in the wake of the Great Recession, many folks are simply not able to buy homes. They can't meet more stringent lending standards and while there are efforts to make mortgages more accessible, a repeat of what you saw in the last housing bubble isn't likely any time soon. Making matters worse for folks still getting their financial footing is that home prices have appreciated considerably over the past several years. Second, you need to consider demographics. Most young people can't afford to buy homes (more and more of them are living with their parents into their late 20s and 30s), and surveys indicate that home ownership is generally less important to younger people. Finally, in some areas, including some of the most desirable parts of the Bay Area, there is realistically not going to be a significant increase in supply any time soon, so demand is likely to exceed supply for the foreseeable future. Obviously, another recession would put a damper on things and double digit decreases in average rents are even possible in the hottest markets under such a scenario, but people waiting for $1,500 studio apartments in San Francisco shouldn't hold their breath.
coldcode 12y ago
In Arlington, TX where I live I could buy a high quality 3500+ SF house with pool and an acre for $3000 a month or so. However downtown Dallas apartments are approaching $2500 because the traffic is so bad people want to live in town.
tinbad 12y ago
The rent prices in SF (and around) have baffled me ever since I moved here in 2011. Can anyone explain who is supposed to be able to afford $3k+ for a studio? Me and my gf both work in tech (making well north over 100k each) and between the two of us we barely can afford a 2bedroom apartment for about 3k/mo. I can't imagine living by myself and paying such insane amounts on rent alone. After adding in things like student loan payment, car payment and groceries/living expenses there isn't much left to save or do anything extra? (Don't even get me started on trying to "buy" a place and coming up with a downpayment, which is very different dynamic on by itself) So, I can only assume that everyone who is able to drop 3-5k on rent alone must be making 200k at least? There can only be that many "Directors of engineering", "Heads of dev"? Clearly I am doing something very wrong here.
- 7Figures2Commas 12y ago
  Tech is always implicated in stories about Bay Area housing and rents, and it does play a role, but too many people forget that the Bay Area has a diverse population and economy. There's a sizable foreign population, and professionals working in industries like finance, law and medicine often make far more than their code-writing peers. For instance, an associate attorney or investment banker with a few years of experience can easily pull in more than $200,000/year. This said, there are also a lot of young people in tech who earn good money but spend most of it (on rent, eating out, traveling, etc.) believing that the current environment will last forever. If they knew that this wasn't the case, they'd probably be less willing to spend a huge chunk of their take home pay on rent.
- dasil003 12y ago
  You can pay $3000 for rent on $100k salary, it's not ideal but it won't automatically put you in extreme hardship either, you just have to be frugal somewhere else. Granted $100k is still a high salary, but there are a lot of people making that in SF. Still not enough to fill up the town probably, but then you have rent controlled apartments diminishing the supply, and also poorer people packing 2,3,4,5 salaries into 1,2,3 bedrooms. With lack of new construction and a lot of good jobs it's easy to see how the situation has gotten to the current point. That's not to say people are living well there—you take a significant lifestyle hit to live in SF compared to the mid-tier American cities even with a 50% pay raise, but it's seen as a desirable place to be so prices just keep getting jacked up.
alex_duf 12y ago
That's why most countries put regulation on rent increases indexed on the inflation.
freedom123 12y ago
Rent and housing prices are based on supply and demand. Lots of people want to be in SF. SF housing is not meeting the demand - thus your increase in price. Meaning more building are not being erected to support the demand. The prices will continue to go up bc SF is highly regulated. Regulated in creating new building and regulated with "historical" building that can never be torn down to create bigger and better accommodations - enjoy.
weissadam 12y ago
The last time I visited SF, I saw an awful lot of new construction. Even though I'm aware that it's unquestionably a landlord's market over there these days, there has always been a sizable spread between what modern/new stuff rents for and what the older stock rents for. I'd really have to see a distribution of years since construction/last major remodel, to really believe any data like this. To lump it all together seems naive to me.
alexbilbie 12y ago
It's the same across the pond here in London - 9.5% increase between October 2013 and October 2014 Average rent is now £1411 (~$2200) http://homelet.co.uk/index.php/homelet-rental-index/greater-london http://homelet.co.uk/index.php/homelet-rental-index/greater-...
- dasil003 12y ago
  The benefit of living in London is that there is a super smooth gradient of rent decrease as you move further out in all directions, and there is reasonable commuter rail all the way. The downside of course is tiny rat-infested 150-year-old boxes remodeled 30 times since then, each time with a poorer job than the last. San Francisco has the upper hand here having burned to the ground more recently.
  - ulfw 12y ago
    It's burned to the ground 108 years ago. Not THAT recent either...
MrDom 12y ago
Are these numbers so low because of rent control? I lived in a 300 square foot studio last year that cost me $1400 a month. That exact same studio now costs $2800. I've seen similar increases from craigslist posts throughout the city, compared to what I was looking at last year. What I wouldn't give for it to only have increased 15%.

23 points by dbg067 12y ago

tn13 12y ago

My rent increased by 9% last year. This year it is increased by another 9%.

alex_duf 12y ago
Your rent will double every 7-8 years if it keeps increasing that fast.
- ryanklee 12y ago
  > if it keeps increasing that fast Any reason you can give that it would?
  - alex_duf 12y ago
    If the tech bubble doesn't pop ?

Pro_bity 12y ago

I would love to say this is shocking, but it has become routine to see double digit percentage increases in San Francisco rents. I am curious to see if the increases were as extreme outside on the city.

s_m 12y ago

That's believable, but they don't cite a source…

jdhawk 12y ago

Austin isn't much better. We have a 9% jump in the last 6 months. http://www.rentjungle.com/average-rent-in-austin-rent-trends/ http://www.rentjungle.com/average-rent-in-austin-rent-trends... http://kxan.com/2014/08/01/austin-hottest-real-estate-market-in-the-us/ http://kxan.com/2014/08/01/austin-hottest-real-estate-market... While these seem like peanuts for Coaster's, its having a pretty huge effect on long time residents. We're undergoing a building boom that feels insane.

gojomo 12y ago
An actual building boom offers better hope that at some nearer point, the rent increases will pause and reverse.
- jdhawk 12y ago
  You'd think so, but the last 3 years have not brought relief...I'm not complaining about housing prices - I've owned for a while, but I feel for my renting friends. Traffic on the other hand...that's something to complain about
CoreSet 12y ago
As someone on the inside, I'm sorry to say it's going to get worse before it gets better. But there is a real chance, that in a few years, we'll see some moderation, as Millennials fail to replace the last crop of new homebuyers and current values fall. That's what I'm hoping for, at least.
CoreSet 12y ago
And I second your thoughts. Transplants from the coast still think it's an affordability paradise, but for someone who's grown up here all his life, the picture looks bleaker. I just hope we don't become SF!

FreakyT 12y ago

It continues to strike me as odd that there isn't more focus on building high-density highrise housing in SF. Is this related to earthquake danger, historical preservation, idiocy on the part of local politicians, or some combination of these?

walshemj 12y ago
NIMBY Squared
tn13 12y ago
The local politicians and their votes are mostly s. The rent control laws have made affordable housing rare but luxury housing and office spaces reasonably priced. The problem is further compounded by the zoning laws, parking space related laws and the local community which is consistently voting against any housing projects to make sure their property rates do not go down because of increased supply.
batbomb 12y ago
Established and older residents, especially those without children, see no reason we should be "Manhattanized" so more people can live here. They "like SF just the way it is, thank you". If you don't have kids, and you have rent control, you never really need to upgrade your 1BR apartment once you got it. Secondly, there is no upzoning, and subsequently no increase in density, without eviction, thanks to the rental market. Evictions aren't popular. The Tenderloin is completely insulated from any of this. Historical preservation is bogus, but has a history. The reason that some people argue for largely have to do with the projects in the Western Addition, which bulldozed a bunch of victorians to make what most people consider an eyesore. Local politicians don't really care too much. The reason being is any action they take pissed off established residents, who voted them in. That's changing a bit, as more people feel the pressure of the rental market and evictions. Still, there's more of an attempt to protect people who are established then there is an attempt to accommodate those who actually need housing, especially those in the middle class.
discardorama 12y ago
And, to add to what everyone else said: there are out-of-towners who are buying up this newly-built property; either as a place to stash some cash (people from China, Russia), or as a crashpad for when they come in to town (from other parts of Bay Area) for an event or something.

sarciszewski 12y ago

http://www.miniwebtool.com/doubling-time-calculator/?r=13.5 http://www.miniwebtool.com/doubling-time-calculator/?r=13.5 At this rate, rent will double every 5-6 years.

ryanklee 12y ago
> At this rate Be wary of any trend extrapolation. Better to figure out the dynamics underlying changes. In this case, the rate will change way before rents have the chance to double. Rental markets are cyclical. In simple terms: They go up; they become unattractive to renters; they go back down.
- 7Figures2Commas 12y ago
  There's no doubt that in many areas, including the San Francisco Bay Area, the current trend is not sustainable. But I think you're underestimating some fundamental shifts that have taken place that will put a floor under rents. First, in the wake of the Great Recession, many folks are simply not able to buy homes. They can't meet more stringent lending standards and while there are efforts to make mortgages more accessible, a repeat of what you saw in the last housing bubble isn't likely any time soon. Making matters worse for folks still getting their financial footing is that home prices have appreciated considerably over the past several years. Second, you need to consider demographics. Most young people can't afford to buy homes (more and more of them are living with their parents into their late 20s and 30s), and surveys indicate that home ownership is generally less important to younger people. Finally, in some areas, including some of the most desirable parts of the Bay Area, there is realistically not going to be a significant increase in supply any time soon, so demand is likely to exceed supply for the foreseeable future. Obviously, another recession would put a damper on things and double digit decreases in average rents are even possible in the hottest markets under such a scenario, but people waiting for $1,500 studio apartments in San Francisco shouldn't hold their breath.

coldcode 12y ago

In Arlington, TX where I live I could buy a high quality 3500+ SF house with pool and an acre for $3000 a month or so. However downtown Dallas apartments are approaching $2500 because the traffic is so bad people want to live in town.

tinbad 12y ago

The rent prices in SF (and around) have baffled me ever since I moved here in 2011. Can anyone explain who is supposed to be able to afford $3k+ for a studio? Me and my gf both work in tech (making well north over 100k each) and between the two of us we barely can afford a 2bedroom apartment for about 3k/mo. I can't imagine living by myself and paying such insane amounts on rent alone. After adding in things like student loan payment, car payment and groceries/living expenses there isn't much left to save or do anything extra? (Don't even get me started on trying to "buy" a place and coming up with a downpayment, which is very different dynamic on by itself) So, I can only assume that everyone who is able to drop 3-5k on rent alone must be making 200k at least? There can only be that many "Directors of engineering", "Heads of dev"? Clearly I am doing something very wrong here.

7Figures2Commas 12y ago
Tech is always implicated in stories about Bay Area housing and rents, and it does play a role, but too many people forget that the Bay Area has a diverse population and economy. There's a sizable foreign population, and professionals working in industries like finance, law and medicine often make far more than their code-writing peers. For instance, an associate attorney or investment banker with a few years of experience can easily pull in more than $200,000/year. This said, there are also a lot of young people in tech who earn good money but spend most of it (on rent, eating out, traveling, etc.) believing that the current environment will last forever. If they knew that this wasn't the case, they'd probably be less willing to spend a huge chunk of their take home pay on rent.
dasil003 12y ago
You can pay $3000 for rent on $100k salary, it's not ideal but it won't automatically put you in extreme hardship either, you just have to be frugal somewhere else. Granted $100k is still a high salary, but there are a lot of people making that in SF. Still not enough to fill up the town probably, but then you have rent controlled apartments diminishing the supply, and also poorer people packing 2,3,4,5 salaries into 1,2,3 bedrooms. With lack of new construction and a lot of good jobs it's easy to see how the situation has gotten to the current point. That's not to say people are living well there—you take a significant lifestyle hit to live in SF compared to the mid-tier American cities even with a 50% pay raise, but it's seen as a desirable place to be so prices just keep getting jacked up.

alex_duf 12y ago

That's why most countries put regulation on rent increases indexed on the inflation.

freedom123 12y ago

Rent and housing prices are based on supply and demand. Lots of people want to be in SF. SF housing is not meeting the demand - thus your increase in price. Meaning more building are not being erected to support the demand. The prices will continue to go up bc SF is highly regulated. Regulated in creating new building and regulated with "historical" building that can never be torn down to create bigger and better accommodations - enjoy.

weissadam 12y ago

The last time I visited SF, I saw an awful lot of new construction. Even though I'm aware that it's unquestionably a landlord's market over there these days, there has always been a sizable spread between what modern/new stuff rents for and what the older stock rents for. I'd really have to see a distribution of years since construction/last major remodel, to really believe any data like this. To lump it all together seems naive to me.

alexbilbie 12y ago

It's the same across the pond here in London - 9.5% increase between October 2013 and October 2014 Average rent is now £1411 (~$2200) http://homelet.co.uk/index.php/homelet-rental-index/greater-london http://homelet.co.uk/index.php/homelet-rental-index/greater-...

dasil003 12y ago
The benefit of living in London is that there is a super smooth gradient of rent decrease as you move further out in all directions, and there is reasonable commuter rail all the way. The downside of course is tiny rat-infested 150-year-old boxes remodeled 30 times since then, each time with a poorer job than the last. San Francisco has the upper hand here having burned to the ground more recently.
- ulfw 12y ago
  It's burned to the ground 108 years ago. Not THAT recent either...

MrDom 12y ago

Are these numbers so low because of rent control? I lived in a 300 square foot studio last year that cost me $1400 a month. That exact same studio now costs $2800. I've seen similar increases from craigslist posts throughout the city, compared to what I was looking at last year. What I wouldn't give for it to only have increased 15%.