Wednesday, July 8, 2020

Bay Area Rents Drop But Are Still Too High

By Danielle M. Mazzella

In this California  Housing Needs Dashboard blog series, members of the Partnership's research team highlight key indicators accessible in our new online data tool. The Dashboard provides key affordable housing statistics and housing market metrics for all 58 counties of California.

With t he impact of the coronavirus pandemic stretching on, our first spotlight is on rent trends in the San Francisco Bay Area. News outlets have documented the mass exodus of renters from the Bay Area's infamously expensive rental market to other parts of California or out of state altogether. A number of news outlets have cited reductions in rent as high as 10% compared to last year, but what real impacts have these fluctuations had for our essential workers?
While these drops in rent could improve housing market access for higher income families, Bay Area rents are still far out of reach for the region's essential workforce. If we take a closer look at the Dashboard's "Who Can Afford to Rent" visualization for San Mateo, San Francisco, and Santa Clara Counties, we see the stark imbalance between local wages and local asking rents.
Average asking rent for a two-bedroom in San Mateo County is $3,233 a month, and a household needs to earn four times the local minimum wage to afford that rent in the City of San Mateo. According to CoStar data, San Mateo has experienced a 2.4% decline in rent compared to last year, and if applied across the county, households with childcare workers or construction laborers would still not come close to the $10,516 monthly wage needed to afford a reduced asking rent of $3,155 a month. 

In San Francisco, CoStar data shows that rents fell by 2.5% percent in the same period, yet even if rents continue to fall to 10% less than the prior year, minimum wage workers and other service industry professionals would continue struggling to earn enough to afford $3,422 a month for a two-bedroom home. 

The story is the same further down the peninsula. The City of Mountain View experienced a 2.6% decrease in two-bedroom rents according to CoStar data. A household with two minimum wage workers would need to earn an additional $3,703 more a month to afford a reduced asking rent of $2,780 from $2,854.  

The Dashboard graphics make it clear that despite some cooling off, the Bay Area not only has been unaffordable for essential workers and lower income households for years, but will continue to be without sustained intentional actions by federal, state and local leaders. 

To explore average asking rents, cost of living, and other housing metrics and indicators where you live, check out our recently released  Housing Needs Dashboard ,  complete with interactive graphics and reports. 
Also, as a reminder, please join us tomorrow (7/9) at 11:30 am for an in-depth walkthrough of the Dashboard with our team. 

Danielle M. Mazzella
Preservation & Data Manager

View this blog on our website.