Bay Area rents are the nation’s highest
The San Jose MSA has an average rent of $2,369 per month followed by San Francisco, with an average monthly rent of $2,285, according to RealFacts, which follows rental trends and occupancy rates in California and elsewhere.
Some long-time Bay Area residents may recall the days when a BART commute could lead to much more affordable rent.
RealFacts says the East Bay and North Bay are “echo markets” where rents are rising and likely to go higher. That’s especially true as residents are forced out of increasingly wealthy enclaves such as San Francisco.
“Future rent growth will be strongest in the markets that have yet to enjoy the full benefits of the ‘echo effect’ from the primary-driver markets like San Francisco,” RealFacts predicted.
So how pricey is it in San Francisco?
Let’s pop on over to Avalon’s new apartment development in Hayes Valley.
The first sign of trouble, at least for middle-class residents hoping to remain in San Francisco, is a Hoodline report that says, “Want to live in the new building that’s going up at Oak and Octavia? You might want to rob a bank first.”
Adding insult to injury, city representatives at one point told members of the Hayes Valley Neighborhood Association that the development on the former Central Freeway on-ramp could include apartments as large as three-bedrooms so that the city’s struggling middle-class families had an option to remain in San Francisco. That lofty vision apparently slammed into realities of the marketplace.
And the market reality is that people are willing to pay dearly to live within walking distance of Twitter, Square and Uber’s headquarters, plus have the option to stroll over to popular restaurants and cultural amenities.
How much are they willing to pay?
At Avalon Hayes Valley, studios start at $3,135 per month, one-bedrooms start at $3,545 and two-bedrooms start at $4,270, according to Avalon’s website. The New York Times reported last week that millennials want apartment life rivaling that of a luxury Four Seasons hotel, and this 182-unit, five-story building fits the bill. Amenities include a 24-hour fitness center, a fireplace lounge, rooftop terraces and gourmet kitchens.
No surprise Hoodline heard from a lot of readers on Avalon’s new apartments.
Some see the development as providing affordable housing for San Francisco’s middle class, at least in their world view.
“Techies represent the new middle class in SF,” one Hoodline reader said.
Some readers were simply perplexed anyone would drop $3,100 on a studio, to which one reader responded, “Walking distance to a lot of companies located in Mid-Market and SoMa. Hayes Valley is a cool neighborhood — despite the traffic congestion. If you don’t have kids and like urban living, I can see it. I’d never live there.”
So is there any relief in sight for renters and their stretched finances?
Short answer, no.
“While rates keep climbing, renters are worried,” RealFacts said. “The rule of thumb is no more than thirty percent of income should be spent on housing.
“But residents of San Francisco would argue it’s often the reverse. Renters can easily pay upwards of 70 percent of their income on housing — even with a roommate,” RealFacts said. “They are hoping this runaway train will stop.”