When Blair Vorsatz started apartment hunting in San Francisco this year after living out of state for more than a decade, the 30-year-old Bay Area native braced himself for sticker shock. His first impression of a 1,900-square-foot, two-bedroom condo at the Ritz-Carlton Residences in downtown San Francisco—listed for rent at $8,000 a month—was that it was too big and more than he wanted to spend, even though it checked off other boxes on his wish list: luxury building, great view and close to his job in the Financial District.

But when the landlord cut the monthly rent to $7,000 a few weeks later, Mr. Vorsatz reconsidered. “All of a sudden, I was like, ‘This is gorgeous,'” he said. He signed a two-year lease and moved into the apartment in May. “I got this for a steal, relative to other places around here,” he said.

Although rental markets in major US cities surged to record highs last year, San Francisco’s recovery has lagged behind. Landlords and brokers cited a confluence of factors, including exorbitant prepandemic rents and the city’s rent-control policies, coupled with a mass exodus of tech workers and others over the past two years. While many restaurants and businesses have reopened and workers are being called back, homelessness and crime are prevalent in pockets of the city.

Blair Vorsatz worked with Leslie Bauer, founder of Highrises2Homes, to find an apartment at the Ritz-Carlton Residences, San Francisco.

Angela DeCenzo for The Wall Street Journal

Of the 100 largest cities nationwide, San Francisco’s rent discounts are the steepest, according to data from home-search website Apartment List. The city’s median rents are down roughly 10% from March 2020, said senior economist Christopher Salviati. “They are trending upward, but at a fairly modest pace relative to the national average,” he said.

In June, the median one-bedroom rent was $2,331, up 7.6% year-over-year, Apartment List data show. But the rent growth was far slower than California’s state average of 13.6% and the national average of roughly 14.2%.

Blair Intent leased a two-year, $7,000-a-month condo at the Ritz-Carlton Residences.

Angela DeCenzo for The Wall Street Journal

One reason for the sluggish recovery is that the city’s rental market was the most expensive in the country prior to Covid, and it took the biggest hit when the pandemic struck. The city’s median rent plunged 26% between March and December 2020, Mr. Salviati said.

He said San Francisco’s rental market experienced a “perfect storm” when a chunk of its tech-heavy workforce left the city to work remotely. “A lot of folks were questioning why they were paying top-dollar, big-city prices,” Mr. Salviati said.

Paul Gaetani, a principal of property management company Gaetani Real Estate, said prepandemic rents were the highest he’d seen in his decades in the business. Gaetani manages 4,200 units in San Francisco, mostly five- to 15-unit buildings. “Enter Covid, when everyone either loses their job or works remotely, and people that were paying high rents, they don’t need to pay these rents anymore,” he said. “They can move and do their job elsewhere in cheaper cities.”

More: US Home Prices Hit a New High in June, in Spite of More Listings Coming on the Market

A park in San Francisco. Between July 2020 and July 2021, the city’s population dropped 6.3%, according to the US Census Bureau.

Alamy Stock Photo

Between July 2020 and July 2021, San Francisco’s population dropped 6.3%, the biggest decline of any other city or town nationwide, according to data from the US Census Bureau. (New York City lost 3.5% of its residents during that time.)

Meanwhile, the city’s apartment vacancy rate shot up to 10.2% in July 2020, compared with 3.9% at the start of the year, according to the property management and analytics software RealPage, which said San Francisco had the highest vacancy rate among large US markets . By comparison, the average vacancy rate nationwide was 4.6% at the start of 2020 and never rose above 4.8%.

Mr. Gaetani said the vacancy rate in his buildings, typically 1% to 2%, ultimately soared to 25%. “There was no one to backfill those units,” he said. “All of 2021 was really, really brutal for landlords in San Francisco.” Many slashed rents.

With the pandemic waning, renters in San Francisco are still resisting paying pre-Covid prices, and landlords’ willingness to negotiate has persisted, tenants and brokers said. In May, the average new lease rent in San Francisco was $3,340 a month, compared with $3,859 a month in January 2020, according to RealPage.

A few months ago, John Micek III, 69, a semi-retired lawyer and entrepreneur, toured about 20 San Francisco apartments with his agent, Tracy Zhou of eXp Realty. One, asking $4,975 a month, was a 900-square-foot one-bedroom in a luxury building off the Embarcadero. Despite exceptional water views from the 27th-floor apartment, he didn’t sign right away.

More: ‘Moon River’ Composer Henry Mancini’s Mid-Century Malibu Estate Lists for Nearly $13 Million

John Mikek III.

Cayce Clifford for The Wall Street Journal

“I didn’t need to jump unless I found the perfect place,” said Mr. Micek, who was moving because he sold his house in Silicon Valley’s Menlo Park.

A few weeks later, the landlord called to see if he was still interested. He asked the landlord to rent it furnished, pricey artwork included, and to install an electric-car charging station in the building. The landlord ultimately agreed to split the roughly $4,000 to $5,000 installation cost, he said. He is paying $6,000 a month for the furnished apartment.

Some landlords said their hands are tied by the city’s rent-control ordinance, which limits how much they can raise rents each year in multiunit buildings constructed before 1979. In 2019, California also passed a statewide rent-control law to cap rent increases in buildings that are at least 15 years old.

Renee Voss is a managing partner of Voss Management, which manages around 152 units in six San Francisco buildings. Ms. Voss said she discounted rents in about two dozen units to retain tenants in 2020. “People were telling us, ‘This is what I want to pay or I’m moving,'” she said. She still had a 30% vacancy rate in 2020.

Ms. Voss said rent control is preventing her from reinstating pre-Covid pricing. “Once you lower someone’s rent, there’s no way to say, ‘Covid’s over, we’re taking you back'” to the prior rate, she said.

Not everyone agrees that rent control is to blame for what happens in San Francisco’s real-estate market. Daniel Wayne, a tenants’ rights attorney and partner at law firm Wolford Wayne LLP, said in his opinion, a larger factor is young tech workers now being able to work remotely and pay less for more space. “The main issue is demand and value,” he said.

In San Francisco, homelessness, car break-ins and other crimes have also made headlines.

“It’s a problem, and there are various parts of San Francisco that, honestly, I didn’t want to look at,” Mr. Micek said. The first time he took his girlfriend to see the apartment he ended up renting, there was a sideshow—where drivers illegally block traffic to perform stunts with their cars—at the end of the block. He said it gave him a pause, and it convinced him not to buy in San Francisco right now. Still, he feels that the neighborhood around his building is safe. “So far, it’s been fantastic,” he said.

Whatever the cause, lower rents have been a boon for tenants.

Alex Darden, 24, an investment associate, snagged a rent-controlled studio apartment when he moved to San Francisco in October 2020. The apartment, in the Financial District, had been asking $2,700 a month before Covid. He signed a one-year lease for just over $1,700, he said. “San Francisco is very expensive, so when I was looking around and I saw some of the prices in areas I wanted to move to, I was kind of like, ‘I need to hop on it now,’” he said. In October 2021, Mr Darden’s monthly rent increased by $12.

San Francisco’s newest luxury buildings, which aren’t covered by rent-control laws and typically draw young, well-paid workers, were hit particularly hard during Covid and are still playing catch-up, real-estate agents said.

Covid caused high-rise living to become less desirable overnight, as did paying a premium to live near the Financial District, according to Denise Paulson of Compass. “Nobody wanted to ride elevators. People were washing their groceries, remember?” she said. “They didn’t want to get in an elevator with anybody—even with two masks on.”

More: Salt Lake City Is Set to See Its First Property Tax Rate Rise in Eight Years

To drive lease activity, a number of large buildings are still offering incentives.

Fifteen Fifty, a 550-unit building that started leasing in February 2020, was recently advertising up to two months free, plus eight months of free membership at the fitness club Equinox, on select apartments. At 1177 Market at Trinity Place, tenants recently got a month free plus flexible move-in dates, and NEMA San Francisco offered up to seven weeks free. The George, a 302-unit building in the SoMa neighborhood that started leasing in March, is currently offering two months of free rent on all units plus a $2,000 rent credit on two-bedroom apartments. In late June, developer Brookfield Properties said the building was 52% leased.

Fifteen Fifty developer Related Cos. has scaled back incentives since 2020, when it offered concessions for almost every deal it closed, according to Justina Shutler, a vice president at Related. Now the developer is offering concessions on select units to get Fifteen Fifty “to the finish line,” she said. Occupancy is currently around 90%.

Fifteen Fifty—where prices start at $3,350 for a studio and there is a $19,500 penthouse—has amenities such as a dog run, rooftop pool deck, screening room and sports lounge. During lockdown, the developer offered online workout classes and free cooking classes, with meal kits delivered to people’s doors. “In a time where there weren’t services outside of your home, that was impactful,” Ms. Shutler said.

More: Add a Summer Feel to Your Home

The George started leasing in March. It recently advertised two months of free rent plus a $2,000 rent credit on select.

Brookfield Properties

The George has a library, co-working space and rooftop lounge.

Brookfield Properties

Rob Chua, a 34-year-old nonprofit and public affairs consultant, said he was drawn to amenities at the George, but the hefty discount for a one-bedroom was a “huge factor” in his decision to rent. Previously, he was living with his parents elsewhere in the Bay Area and saving money to buy a place. Instead, he moved in to the George in May. The building has various amenities, including a gym, library, co-working space and rooftop lounge. Mr. Chua’s base monthly rent is $3,600, but it works out to $2,800 after concessions. He said he’s likely to re-evaluate his situation next year. “For the time being, it’s great,” he said.

In late May and early June, brokers and landlords said they noticed an uptick in the rental market as more people returned to the office. Alphabet’s Google has a hybrid work model, with employees returning to the US office a few days a week starting in April. In June, Elon Musk said Tesla Inc. and SpaceX employees must spend at least 40 hours a week in the office.

Mr Gaetani said his portfolio is still 6% vacant, three times a typical rate, but far from the 25% vacancy rate during 2021. Rents, however, are still down by 10% to 15%.

As in other cities, San Francisco tenants have reconsidered factors like outdoor space, layout and building size, brokers said, signaling a longer-term shift in how people want to live.

“People want buildings that are smaller with outdoor space, so they’re not landlocked in their apartment in the sky,” said Patrick Barber, a landlord and a regional president of Compass in California.

Until recently, Ms. Voss had a one-bedroom apartment in Russian Hill, asking around $4,000, that had been vacant for about four months. In mid-June, she found a tenant—bringing her portfolio to 100% occupied. Although demand is higher, she said, “residents are much more picky now than they used to be. They want more for less.”

The post Rents Have Bounced Again to Prepandemic Ranges in Most Main Cities. San Francisco Isn’t Certainly one of Them. appeared first on Los Gatos News And Events.

SAN FRANCISCO — A San Francisco woman was arrested this week after police said she flew to Detroit and rented an Airbnb in a nearby suburb to meet with a teen.

Stephanie Sin, 32, rented an Airbnb in Royal, Oak, Michigan, authorities said, according to media outlets. She ordered an Uber to the home of a 15-year-old in nearby Novi to pick him up, authorities said. The teen told his parents when the ride arrived, and they called the police.

Officials suspect she talked to the teen for more than a year.

Find out what’s happening in San Franciscowith free, real-time updates from Patch.

Online court records showed she was booked into the Oakland County jail Monday night on sex offense charges and using a computer in commission of a crime.

Novi police said Sin met the boy on an app when he was 14, WJBK-TV reported. Their talks escalated from the app to text messages and became increasingly more explicit, police said.

Find out what’s happening in San Franciscowith free, real-time updates from Patch.

Police told WJBK that Sin did not appear surprised when she was arrested.

Get more local news delivered straight to your inbox. Sign up for free Patch newsletters and alerts.

To request removal of your name from an arrest report, submit these required items to arrestreports@patch.com.

San Francisco Woman Rents Airbnb Near Detroit To Meet Teen, Police Say

The rules of replying:

• Be respectful. This is a space for friendly local discussions. No racist, discriminatory, vulgar or threatening language will be tolerated.
• Be transparent. Use your real name, and back up your claims.
• Keep it local and relevant. Make sure your replies stay on topic.
• Review the Patch Community Guidelines.

Reply to this articleReply

The post San Francisco Lady Rents Airbnb Close to Detroit To Meet Teen, Police Say appeared first on Los Gatos News And Events.

kali9 / iStock.com

While rents declined in the early days of the COVID-19 pandemic, they have spiked by an unprecedented 17.1% nationally over the last year, according to Apartment List. At the same time, the only generation to record an increase in renting activity in the past year (up by 21%, per RentCafe) is Gen Z — a generation which is playing a big role in a seeming urban revival.

Discover: 9 Bills You Should Never Put on Autopay
More: The Minimum Salary You Need To Be Happy in Every State

Bonus Offer: Find a Checking Account that Fits Your Lifestyle. $100 Bonus Offer for New Checking Account Customers.

Rent growth continued to increase in March, with Apartment List’s national index up by 0.8%. So far this year, rents are growing more slowly than they did in 2021 — however, rental prices continue to rise at a faster pace than pre-pandemic. In addition, over the first three months of 2022, rents have increased by a total of 1.8%. In March, rents increased in 93 of the nation’s 100 largest cities, with “Sun Belt markets in Florida and Arizona continuing to see some of the nation’s fastest growth,” per Apartment List.

The Miami metro has seen the nation’s fastest rent increase over the past six months, up 8%, and also ranks No. 1 for year-over-year rent growth, producing a 30% increase. Over the past six months New Orleans rents went up 8%, Orlando rents rose 6%, Tucson rents increased by 5% and Salt Lake City rents hiked by 5%.

In terms of supply, Apartment List notes there is a gradual easing of the tight market conditions that have characterized the rental market over the past year.

In the midst of these rising prices, one generation seems to be less affected than others. A RentCafe report finds that Gen Z represents more than a quarter of lease applications nationwide, mostly centered in large urban hubs that promise job opportunities. Gen Z residents may bring new life into cities once considered in decline due to the pandemic.

Bonus Offer: Bank of America $100 Bonus Offer for new Online Checking Accounts. See page for details.

In 2021, Gen Z rental hotspots included San Francisco, which saw a 101% increase in new apartment renters of this generation, per RentCafe.

See: Gen Z & Millennials Would Rather Be Unemployed Than Unhappy at Work
Find: How Much Money Gen Z Makes in Every State

San Francisco’s popularity was echoed by Jersey City, New Jersey (with a 95% Gen Z increase over the past year), and Manhattan, New York, at a 65% increase. Rounding out the top 10 cities attracting Gen Z renters are Philadelphia, Boston, Arlington, San Jose, Seattle, and Minneapolis.

More From GOBankingRates

About the Author

Yaël Bizouati-Kennedy is a full-time financial journalist and has written for several publications, including Dow Jones, The Financial Times Group, Bloomberg and Business Insider. She also worked as a vice president/senior content writer for major NYC-based financial companies, including New York Life and MSCI. Yaël is now freelancing and most recently, she co-authored the book “Blockchain for Medical Research: Accelerating Trust in Healthcare,” with Dr. Sean Manion. (CRC Press, April 2020) She holds two master’s degrees, including one in Journalism from New York University and one in Russian Studies from Université Toulouse-Jean Jaurès, France.

The post Regardless of Rents Spiking, Gen Z Transferring to Main City Areas Like San Francisco, Manhattan appeared first on Los Gatos News And Events.

San Francisco rents have rebounded dramatically this year, according to a new report from Apartment List. In June, average rents rose 17 percent year-over-year, according to data gathered by the rental listings website. From May to June alone, rents rose by almost 3 percent.

Despite the spike, the median rent of around $ 2,300 in June 2021 is still 14 percent below what landlords got in March 2020 when one-bedroom apartments rented a median of more than $ 2,600 per month. Then came the steep decline as tenants fled the city in search of more space and cheaper apartments elsewhere, with the average low in December 2020 under $ 2,000 a month according to Apartment List data.

The rent increases can’t come soon enough, said Eric Andresen, owner of West Coast Property Management, which manages around 1,600 rental units in San Francisco. As early as April 2020, he saw apartments standing empty, and in June the vacancy rate really increased. By October, more than 20 percent of the units he managed were vacant. “Our vacancy rate before COVID was around 2 percent,” he said.

Residents who stayed in the city began inquiring about rent cuts, which he seldom granted due to the city’s strict rent control requirements, although he helped many with their applications for state and local relief funds. Even the “first month free” offers often seen in other areas are not advisable in the Bay Area, he said.

“Nobody should offer offers, deadlines, end of sentence,” he said. “Those who did it will be stung by it in the near future. The rental committee has already decided that every deduction, every free rent or even future free rent represents a reduction in the basic rent, the tenancy. “

As rent cuts and other incentives to stay in their current apartments are unlikely, many Andresen tenants have taken the opportunity in recent months to move to larger or modernized apartments. He also saw many residents drop out of roommate agreements.

“I think we see a lot of roommates transitioning from shared flat to single life,” he said.
Andresen said he believes about half of the new leases for his apartments this year are renters who are “emerging” from their previous housing situation. The other half are new tenants arriving in town as the employment situation improves and offices reopen for personal work. Renovated one-bedrooms were the most popular for both groups, he said.

The upward trend extends to other metros in the Bay Area. Oakland was still down 12 percent and San Jose was down 8 percent, which is among the largest declines in the country. But these areas have seen a recovery, and the introduction of vaccines and subsequent reopening are making the city more attractive.

According to Zumper data, one-bedroom rents in San Francisco rose 5.3 percent between May and June 2021, compared to just 2.5 percent for two-bedroom apartments. That was a bigger jump than Oakland or Santa Clara, although those areas were also improving.

“The latest data leaves no doubt that after a year of unprecedented drops, rents in the Bay Area are now rising,” said Jeff Andrews, data journalist at Zumper. “By 2021, rents in San Francisco had decreased by about 25 percent. With workers returning to the offices soon, rents are expected to continue to rise over the next year. Will the average one-bedroom return to $ 3,500? That remains to be seen and will likely depend on the extent to which tech companies adopt permanent guidelines for working from home. “

Andresen said vacancy rates in his units are currently around 10 percent and rents are still falling, but he doesn’t think it will stay that way for long. That’s partly because COVID has made privacy a much more important convenience than it used to be.

“We are gradually climbing out of the COVID hole and I think we’ll see how the market will rebound pretty quickly as we still have a significant shortage of available housing and much of what used to be shared apartments is single dwellings has become. “he said.” Demand will surpass pre-COVID levels within a year I think and rents will quickly return to levels, if not higher. “

Contact Emily Landes

The post San Francisco rents on the rise appeared first on Los Gatos News And Events.

The state Supreme Court on Wednesday cleared the way for San Francisco to pay for additional childcare and early education services with commercial rental taxes approved by 51% of the city’s electorate in June 2018.

The move, Proposition C, was an electoral initiative aimed at raising $ 146 million a year, primarily to fund childcare and education for children under 6 years of age. It has been challenged in court by anti-tax advocates who argued that electoral action to raise local taxes requires approval from two-thirds of voters.

The Howard Jarvis Taxpayers Association, named after the 1978 California tax cut sponsor Prop. 13, relied on a subsequent government initiative, Prop. 218 of 1996, which required two-thirds of voters approval for each of a. the proposed tax increase required local government to fund specific programs.

But California appeals courts recently ruled that the two-thirds requirement does not apply to actions taken by signing initiative motions on local ballot papers, as they are actions of voters, not local governments. That was the conclusion reached by the First District Court of Appeal in San Francisco last June when it upheld another city-wide initiative, a November 2018 move to increase corporate taxes to fund programs for the homeless. Another chamber of the court issued a similar judgment in January and upheld Prop. C of June 2018.

The power of initiative is “one of the most valuable rights of our democratic process” and must be interpreted broadly, said appellate judge Mark Simons in a 3-0 judgment, citing the earlier decision. He said the two-thirds majority of Prop. 218 only applies to measures that are decided by a city council, a supervisory body or a school board and presented to the electorate.

The Jarvis Association appealed to the state Supreme Court, which unanimously denied review on Wednesday. The court also denied review of the earlier appeal decision that allowed San Francisco to fund homeless programs with $ 250 million to $ 300 million a year in new taxes on gross income from companies with annual sales in excess of $ 50 million.

The June 2018 vote included a 3.5% tax on business income from leasing commercial space and a 1% tax on leasing warehouse space, excluding companies that receive up to $ 1 million in rental income annually .

In response to the verdict, City Attorney Dennis Herrera said, “San Francisco voters have the right to direct democracy and self-government. This cements our victory and ensures long-term help for working families. “

Jarvis Association attorney Laura Dougherty said the court had falsely allowed “another loophole” in the nationwide vote to curb tax increases. As a result, she said, “If politicians simply copy and paste a government tax proposal into a citizens’ initiative, they can dramatically reduce the voter approval required for enforcement.”

Although the state’s Supreme Court did not make a decision of its own as to whether Prop. 218 applies to initiatives, the court interpreted the measure narrowly in one 2017 case. In determining that a Southern California city’s tax initiative was not covered by any other provision of Prop. 218 that required special elections for local tax measures, the Supreme Court said that neither the text nor the context of Prop. 218 “supports the conclusion, that the term “local government” should encompass the electorate. “

Jonathan Coupal, president of the Jarvis Association, said his organization is ready to support another referendum effort that requires approval from two-thirds of voters for any increase in local taxes for specific purposes.

The case is Howard Jarvis Taxpayers Association vs. San Francisco, S267516.

Bob Egelko is a contributor to the San Francisco Chronicle. Email: begelko@sfchronicle.com Twitter: @BobEgelko

The post San Francisco tax on business rents to fund baby care will get judicial OK appeared first on Los Gatos News And Events.

MinnPost photo by Corey Anderson

Data from Zillow shows that rents in the metropolitan Twin Cities, which have increased slowly and steadily, have grown slowly during the pandemic but have started to rise again.

For years, Midwestern residents have heard reports from friends and family in major coastal cities about the staggering rental costs in these locations: In 2019, the typical San Francisco apartment cost more than $ 3,000 a month and more than $ 2,500 in New York – both of which are much higher than the roughly $ 1,500 a month it costs to rent an apartment in the Twin Cities, according to Zillow.

That has changed with the pandemic. Suddenly the demand for apartments in New York and San Francisco fell, and rents there fell.

Not so much in the Twin Cities. Data from Zillow shows that rents on the Twin Cities subway, which have been rising slowly and steadily for a decade, stalled during the pandemic but have started rising again.

Article continues after advertisement

A drop in rents

In February 2020, just before the pandemic forced much of public life to close, the typical rent in San Francisco was $ 3,091, according to Zillow, while the typical rent in New York was $ 2,689. (Typical Rent is a metric compiled by Zillow that aims to capture the entire rental market, taking into account changes in rental rates of units regardless of size.)

Typical rents for San Francisco and New York

Source: Zillow

By the end of 2020, typical rents in San Francisco had dropped nearly $ 300 to $ 2,800 in San Francisco and $ 2,412 in New York.

A mix of pandemic-related factors caused the decline, said Nicole Bachaud, an economic data analyst at Zillow.

Some of these factors were common in all cities: young people moved back to their parents when colleges closed or jobs were lost. People doubled when they lost their jobs – and tenants were more likely to lose their jobs at all.

Other factors were more pronounced for large cities like San Francisco and New York. These cities, which typically attract large numbers of people for jobs and lifestyle attractions, did not see much immigration during the pandemic.

“Either there aren’t any jobs or the jobs people were moving for are now out of the way and the facilities weren’t working at full capacity, making these areas less attractive to move to,” said Bachaud. Some of the remaining residents even managed to negotiate their rents down, which would have been unknown a few years ago.

At the same time there was emigration from them. For those who can keep their jobs and work remotely – as many technicians and other employees in these big cities could – many moved out of the city, whether to the suburbs or other parts of the country. This increased the vacancy rate in these cities and depressed rents.

Conversely, rents in some Sunbelt cities like Phoenix and Tampa, where rents are relatively affordable – especially if you’re coming from the coasts – have risen during the pandemic.

Typical Phoenix and Tampa rents

Source: Zillow

“If everything is closed right now, moving to Phoenix may be a good option for many people,” said Bachaud.

Article continues after advertisement

The decline in rents in New York and San Francisco was due to declines at the high end of the market, Bachaud said, which makes sense – and it doesn’t do that much – given workers with the luxury of working remotely and moving elsewhere Helping people in the lower income groups who have been hardest hit by the pandemic.

Now rents are starting to rise again in these places, and there is evidence that the exodus from the big cities was temporary as things reopen and people withdraw to take advantage of the big city life.

“Facilities are reopening in the cities,” said Bachuad. “These changes will pull a lot more people back to the cities who were kind of depressed during the pandemic, and that will help create a stronger rental market.”

What happened in the Twin Cities

In the Twin Cities, rental rates haven’t attracted either a San Francisco or a Phoenix. Instead, they stagnated overall or decreased very slightly in a few months. This was a departure from the slow increase that had occurred over time, but it wasn’t a huge decrease.

Typical rents for MSP

Source: Zillow

“We haven’t really seen much of the lack of immigration or excess immigration in these other places,” said Bachaud.

Some of the factors putting rents under pressure everywhere – young people moving back in with their parents and people doubling in – seemed to be at play here in Minnesota, said Jennifer Ho, Minnesota housing officer.

Minnesota Housing data shows that average rents are relatively flat even during the pandemic, which researchers attribute to vacancy rates of around 5 percent during the pandemic in the Twin Cities metropolis. According to Minnesota Housing researchers, rents tend to go up when the vacancy rate is below 4, as was the case many years before the pandemic. If the vacancy rate exceeds 6 percent, rents fall.

Housing supply has also increased in recent years, which may have contributed to higher vacancies during the pandemic than in previous years, said Ho.

Article continues after advertisement

However, as in other cities, Ho suspects that rent declines are more likely to occur at the higher end of the market and not in cheaper apartments where the demand for a limited number of units is very high.

Ultimately, the decline in rents here was not all that great. From pre-pandemic to the bottom of the market, there was only about $ 30 difference in rents, according to Zillow’s measurements.

“I don’t really think that’s a significant drop in prices,” said Bachaud.

In the Twin Cities, as in many other cities, data show discounts such as free monthly rent, a waiver of the deposit or free parking spaces that landlords sometimes offer tenants instead of rent reductions. From the time before the pandemic to the peak of the concessions, the proportion of listings with concessions had doubled.

Now the data shows that Twin Cities concessions are falling again and rents are back above pre-pandemic levels.

What the future holds, says Ho, it is not clear: many people are now used to working remotely, and we do not know how this will affect their choice of where to live in the future. We also don’t know what will happen if the current eviction moratorium ends. Another factor is whether more living space – especially cheaper living space – is being built, which could help ensure that the rental offer better matches the economic profile of the tenants.

“There are just a lot of factors at play right now,” said Ho.

The post In the course of the pandemic, rents went down in New York and San Francisco. Why not the Twin Cities? appeared first on Los Gatos News And Events.

Vaccine appointments are open, spring flowers are in bloom, and San Francisco tech giants like Salesforce are planning the return of their employees.

If all of this seems like a recipe for a renewed spike in city rents, conflicting data and ongoing fears for both landlords and tenants point to a more complicated reality.

“Most of the landlords I speak to panic about the market,” said Ray Amouzandeh, Principal Agent at Targa Residential Brokerage. “They say ‘God, is anyone renting?'”

In one point they are.

San Francisco rents rose 3% in April to an average of $ 2,157 for a one-bedroom apartment, according to the Apartment List property listing. However, another report on the Zumper listing found that San Francisco rents were down 1.9% from the previous month, and they charged a higher average price of $ 2,600 for the same size apartment.

So what is it And what does that mean for both the Bay Area’s normally busy summer moving season and the thousands of local renters still seeking financial relief after the economic aftermath of the pandemic?

With the explosion of online real estate sites, deciphering ever-changing rental rates has become an art form. The main differences are usually what type of property is included and whether economists analyze the price landlords charge versus the prices renters end up paying.

Apartment List combines Census median rental reports with data on multiple rental listings to weed out brand new units that can skew higher numbers. Zumper analyzes its current online housing offers and includes new rentals.

“We’re trying to get closer:” What is the average rent in San Francisco, regardless of what mechanism you use to rent an apartment? “Said Rob Warnock, senior research associate at Apartment List in San Francisco. And even with the more measured approach, he said, one thing is clear:” Rents are recovering. “

Amouzandeh said it depends on which part of town you’re talking about. He’s starting to see window cleaners returning to the tech offices near his downtown apartment, but he’s also just negotiated a 20% discount with his own landlord. However, all over town in Bernal Heights there is more competition to rent standalone homes and cottages.

Apartment List found that rents in San Francisco are still more than 19% lower than last April, although prices continue to be significantly higher than other major cities like New York, Los Angeles, and Seattle. Zumper reported that asking rents were down nearly 25% from last April, calculating an even bigger 30% decrease in nearby Redwood City and a 28% decrease in Facebook’s Menlo Park home.

Other Bay Area cities where rents seem steeper include Berkeley, Emeryville, and Union City, where Apartment List’s prices have increased 3% to 4% in the last month.

“In terms of transactions, we’ve doubled our number of leases signed every month since November,” said Amouzandeh. “I’m an optimist so I think we’ll probably get it all back by the end of 2022.”

While things may be going well for some landlords, it is far less clear how confusing the eviction moratorium and rent relief programs can be for tenants in San Francisco who are hardest hit by job losses and instabilities caused by pandemic standstills.

Just last week, local faith leaders organized a sit-in at the San Francisco Mayor’s Housing and Community Development office to highlight the inability of thousands of predominantly black and Latin American families to access promised local rent reliefs. Tenants Together communications and legislative director Shanti Singh says rent increases are also returning, and voice access is another major barrier to emergency programs.

“We know people are falling through the cracks,” said Singh, and that many who lost their jobs during the pandemic went into debt to try to stay housed. These invoices will be due in the coming months.

“It’s chaos now,” she said.

Lauren Hepler is an employee of the San Francisco Chronicle. Email: lauren.hepler@sfchronicle.com; Twitter: @LAHepler

The post Are San Francisco rents rising or falling? Relies on whom you ask appeared first on Los Gatos News And Events.

The US rental market is in turmoil. But there is no major city in which rents have fallen as quickly from as high as in San Francisco.

By Wolf Richter for WOLF STREET.

San Francisco, which still has the most ridiculous rents of any major city in the US, is getting less and less ridiculous given painfully low occupancy and massive tenant churn looking for upgrades and savings – recent rumors of a “rebound in rents” on the contrary.

The median asking rents for one-bedroom apartments in San Francisco fell to a new multi-year low of $ 2,600 in April, a 30% decrease from the June 2019 high. This is evident from data from Zumper:

The five-county San Francisco Bay Area is also the only real estate market in the Case-Shiller Index notorious given the nationwide collapse in house prices for condominium prices that have fallen year over year and are at where they are in March 2018 levels.

In San Jose, the largest city in the Bay Area and part of Silicon Valley, the median asking rent for 1-BR apartments fell to a multi-year low of $ 2,050, a 19% decrease from the most recent high in July 2019. and then again in March and April 2020:

These “advertised rents” are compiled by Zumper from rental entries in the Multiple Listings Service (MLS) and other listing services. However, they do not contain any concessions like the very common “two months free” which further reduce the effective rents.

“Median” asking rent means that half of the asking rents are higher and half are lower. The rental units are located in apartment buildings, including new builds, but do not include single-family homes for rent or condominiums for rent.

Rents for 2-BR apartments in San Francisco have been stable in recent months after a month-long slump. The median asking rents were USD 3,500, 30% less than in October 2015 and 27% less than in July 2019.

There is now a brisk exodus in San Francisco as many of the renters who rent month to month shop and rummage through the large number of vacant units.

How bad is it? According to Trepp, who analyzes CMBS, 16% of large San Francisco homes with CMBS mortgages have less than 80% occupancy. For comparison: In numerous cities like Phoenix there are no such buildings with an occupancy rate of less than 80%. None!

So people take advantage of the numerous vacancies and offers they receive from landlords, such as: B. “two months free” to upgrade to bigger and nicer units. Landlords who offer the right offers can have their units filled. Other landlords sit on vacant units and wait for better times.

And some of these upgrades move from one bedroom apartments to two bedroom apartments. This classic flight to quality at the same or lower price changes the mix a bit. And such changes in the mix can push the average rent data up with data providers who offer a combined average rent figure for all types of housing.

These data providers, who place 1-BR and 2-BR apartments in the same area, may have an increase in the average rent in their total number, which is distorted by this shift in the mix to larger, nicer units without the asking rents per Housing has risen kind of. And of course that has played out on the front pages of the local media.

In San Jose, the median rent for 2-BR homes has been around $ 2,660 for several months, after falling 13% since early 2019. Again, the brisk churn and flight to quality has resulted in some stability of larger, nicer units at a lower price.

Affordability crisis is moving inland.

There are now all sorts of accounts of the work of Homers who have left San Francisco and Silicon Valley to go to cheaper pastures. Many of them found these cheaper pastures within a two to three hour drive of San Francisco, and rents in these markets have exploded amid the influx of people who suddenly had plenty of extra money to burn.

In Sacramento, about 100 miles east of San Francisco, the median 1-BR asking rent in April rose 15% to $ 1,450 from June 2019:

In Fresno, about 150 miles southeast of San Jose, the median 1-BR asking rent in April rose nearly 30% from its most recent low in September 2019. Some of these shifts clearly occurred before the pandemic, and the pandemic accelerated them:

And the difference diminishes.

With rents dwindling in San Francisco and rents rising in Sacramento and Fresno, the difference has collapsed. In San Francisco, rent dropped from $ 3,720 in the summer of 2019 to $ 2,600 in April. In Sacramento, rent rose from $ 1,260 to $ 1,450 over the same period. The rent differential between the two cities collapsed 53% from $ 2,460 in July 2019 to just $ 1,150.

In other words, renters who moved in July 2019 saved $ 2,460 monthly in rent. Renters who moved in April 2021 saved just $ 1,150. At some point, when the difference continues to narrow, the savings are not worth the move, and the motivation to move to these cheaper pastures disappears.

And the rental range between San Francisco and Fresno is down 49%, from $ 2,720 in July 2019 to $ 1,380 in April:

Similarly, the gap between 1-BR rentals in San Jose and Sacramento has decreased by 53%; and the difference between San Jose and Fresno has collapsed by 47%:

It doesn’t take much for the exodus from a large market like the Bay Area to result in major rental turbulence in smaller surrounding markets like Sacramento or Fresno, and this could put further pressure on rents in these inland cities. But the narrow distribution of rents makes the move less money-saving and less motivating than it was a year ago.

A similar scenario has played out in the US, with shifts from the most expensive rental markets to cheaper pastures, triggering the corresponding rental slumps and peaks. That the US rental market has been in turmoil is an understatement. And this is just one example – although in no major city have rents dropped from such high pedestals as quickly as in San Francisco.

Have fun reading WOLF STREET and would you like to support it? Using ad blockers – I totally understand why – but would you like to endorse the site? You can donate. I appreciate it very much. Click the beer and iced tea mug to find out how:

Would you like to be notified by email when WOLF STREET publishes a new article? Login here.

Check out these great roof options for homes and other buildings, including apartment buildings, at Classic Metal Roofing Systems

The post It’s Not Over: Rents in San Francisco Down 30%, in Silicon Valley Down 19%, each at Multi-12 months Lows. However Inland Rents Spike appeared first on Los Gatos News And Events.

Logistics real estate provider Prologis Inc. (NYSE: PLD) pointed to continued positive momentum from the fourth quarter as a catalyst for better-than-expected first-quarter results.

The San Francisco-based company reported core funds from operations on Monday at 97 cents per share, 3 cents ahead of consensus and 14 cents higher than the prior-year quarter.

“The demand due to the strong economic recovery, the revolution in the retail trade and the higher inventories has developed more strongly than expected,” said CFO Tom Olinger in the conference call of the company with analysts.

Lease proposals for the first quarter were 93 million square feet, a new record and 13% higher when adjusted for the larger company portfolio size. The contract was signed for 60 million square meters. This was the second highest quarter ever recorded. Management said e-commerce providers accounted for 25% of the new leases signed during the reporting period.

Hamid Moghadam, chairman and CEO of Prologis, said there has been significant demand within consumer products, food and beverage, and all e-commerce-related industries. He noted that the demand for logistics space from healthcare companies has increased and expects the demand from the housing industry to accelerate as well.

According to Moghadam, Amazon (NASDAQ: AMZN), which has been very active in the logistics real estate market, is pushing for smaller properties on the last mile.

“They’ve expanded the basic infrastructure of the big buildings by a long way, and now it’s a trench warfare to find and stand behind those locations with the finishing touch,” Moghadam said. “It won’t be the same impressive numbers in terms of area, but that’s a much higher dollar-per-foot investment and that’s where your focus will be. I would say they are way ahead of everyone else in terms of backbone infrastructure, and now it’s a race for last touch. “

Management said the industry is expected to add 300 million square feet of leased industrial real estate in 2021, the highest level ever recorded. Despite the expansion of capacity, the supply in many markets continues to be restricted by the scarcity of land.

The average utilization of the Prologis portfolio was constant year-on-year at 95.4% and rose to 96.4% at the end of the quarter. However, management said vacancies in several top markets such as Southern California, Toronto and Tokyo, as well as some key markets in Germany, fell below 2%.

A prolonged period of increased retail sales and import volumes to replenish thin inventory levels has resulted in a lack of available logistics space. Rising equipment replacement costs (around 20-25% higher, according to Prologis), tenants with higher inventory levels, and rising interest rates are driving industrial rents up.

US rental growth in the quarter was 2.4% above expectations. Management raised expectations for rent increases to 6.5% domestically and 6% worldwide in 2021. Net effective rent change, which measures the percentage change in rental rates over the life of the lease for new and renewed leases during the quarter, increased 27% across the portfolio (+ 32% in the US). The growth rate increased by 190 basis points compared to the previous year.

Customer retention fell 640 basis points year over year to 69.1%, but management said Prologis was more selective on rental rates and credit quality.

Table: Prologis key performance indicators

Instructions raised

The outperformance in the first quarter led to an increase in Prologis’ guidance. The company now expects to produce core FFO in a range of $ 3.98 to $ 4.04 per share in 2021, compared to the current consensus estimate of $ 3.98.

The utilization is expected to be in a range of 96.25% to 96.75%, 50 basis points higher than originally stated.

New build programs were increased 16% to $ 2.75 billion to $ 3.05 billion. This was the case in the past when the company’s portfolio was about a quarter of its size today. Management said the relatively lower percentage of new developments compared to a decade ago reflects difficulties in obtaining land. However, they see it as supportive of rental growth.

Prologis Ventures is an investor in FreightWaves.

Click here for more FreightWaves articles by Todd Maiden.

The post Logistics house in excessive demand, rents shifting up appeared first on Los Gatos News And Events.

The nation’s 1st Women-in-Color Food Court provides opportunity in San FranciscoSharon Chin reports that the seven entrepreneurs who operate the new La Cocina Municipal Marketplace in the Tenderloin are serving what they hope to be a model for the country. (4-16-21)

35 minutes ago

Pandemic rents are creating hot apartment deals in San FranciscoDespite all the stories of people who fled the city around this time last year to get more space, they are returning but are supported by those in the rental market who never left and did not move in, but with numerous Deals move on. Andria Borba reports. (4-16-21)

50 minutes ago

The popular golf and entertainment complex opens in San JoseTopgolf is a hit in places like Las Vegas, Phoenix, and Austin. Now the popular golf and entertainment complex is opening its first outpost in the Bay Area. Len Ramirez reports. (4-16-21)

58 minutes ago

Walk-in vaccination clinics are now open in Richmond and AntiochThere are new efforts to bypass appointments and make vaccination as easy as entering. Wilson Walker reports from Antioch. (4-16-21)

1 hour ago

Precise forecast for Friday eveningChief meteorologist Paul Heggen has the weekend forecast. (4-16-21)

2 hours ago

19 year old suspect behind mass shootings that killed 8 at the FedEx facility in IndianapolisNikki Battiste reports that police have identified a former FedEx employee who fatally shot eight people and injured others before appearing to commit suicide (04/16/2021).

2 hours ago

Transgender people are at increased risk and identity problems in prisonTransgender people in prison face a variety of challenges in prison, including higher levels of sexual assault. A 2015 study found that people in jail were ten times more likely to be sexually assaulted. CBSN Bay Area’s Michelle Griego spoke to Shaheen Pasha, co-founder of the Prison Journalism Project, and Lisa Strawn, a transgender activist, about what it’s like to be transgender behind bars.

2 hours ago

Armed bikejackers aim at cyclists in the East Bay HillsThe cycling community in East Bay sees a worrying trend: armed robbers appear to be targeting cyclists and their bikes. As Lin reports. (4-16-21)

2 hours ago

Fremont Police release body cam footage of fatal shootings on Highway 84Fremont police released additional details and a video with a body camera in connection with a fatal shooting of a robbery suspect on Highway 84 by police last month. Ken Bastida reports. (4-16-21)

2 hours ago

The FBI is involved in an investigation into mass shootings that killed 8 people at the FedEx facility in IndianapolisCharlie De Mar reports on the ongoing investigation into mass shootings at a FedEx facility in Indianapolis (04/16/2021)

6 hours ago

More people traveling by plane after receiving the COVID vaccinationDevin Fehley reports on the increase in air travel as more people are fully vaccinated against the coronavirus (4-16-2021).

7 hours ago

Contested Mayor of Windsor to step down but not step down from his dutiesAnne Makovec reports that Windsor Mayor Dominic Foppoli has “resigned” from his duties due to sexual assault (4-16-2021).

7 hours ago

Airports in the Bay Area are reporting an increase in air travelAir traffic is showing signs of recovering from the effects of the pandemic as more people are vaccinated and federal officials say it is safe to fly for those who received their shots. Devin Fehely reports. (04/16/21)

9 hours ago

Weather forecast on Friday morning with Mary Lee(04/16/21)

10 hours ago

Liam’s List April 16: SF Film Festival, New Prince Music, Kings & Queens of CountryKCBS reporter Liam Mayclem will provide KPIX 5 users with a weekly tip list on how best to survive the current coronavirus outbreak. (04/16/21)

10 hours ago

Slow recovery is causing businesses to rethink the future in downtown San FranciscoFor small businesses in downtown San Francisco that rely on high volumes of office workers, the post-pandemic economic outlook is as bleak as a summer in the Sunset District. Susie Steimle reports. (4-15-21)

20 hours ago

South Bay restaurants raise funds for anti-hate efforts in support of the AAPI communitySouth Bay restaurant owners spoke out against Asian hatred by raising money this week to fight hate crimes against the AAPI community. Maria Medina reports. (4-15-21)

20 hours ago

California grants immunization rights to residents over the age of 16When California began offering vaccinations for everyone ages 16 and older, Governor Gavin Newsom urged more residents to sign up for appointments. Andrea Nakano reports. (4-15-21)

20 hours ago

PIX nowHere’s the latest from the KPIX newsroom. (4-15-21)

1 day ago

Governor Newsom declares April 15th Vax Day when eligibility is openedOn Thursday, the state opened the door to anyone aged 16 and over to receive a COVID-19 vaccine. Wilson Walker reports. (4-15-21)

1 day ago

Vallejo real estate market among the hottest in the nation during the pandemicCan you guess the third warmest property market in the country? Here’s a hint: it’s Vallejo. Andria Borba reports. (4-15-21)

1 day ago

The Californians are back to work, but the business is far from “common”.The latest new unemployment figures are the first real sign that the California economy is recovering. Kenny Choi reports from San Francisco. (4-15-21)

1 day ago

The post Pandemic-Depressed Rents Make for Scorching San Francisco Condominium Offers – CBS San Francisco appeared first on Los Gatos News And Events.