Rising rents causing crisis Rising rents causing crisis (November 03, 2000)

Low vacancies mean no relief in sight

by Stephanie Ericson

A recent city report confirms what most Pleasanton renters know - already high rents are rising more quickly than in past years, threatening to displace many residents. Moreover, with zero vacancy rates at most complexes, the sharp rise is likely to continue.

From January 1999 to September 2000, the survey of more than 3,800 apartments showed, the rent for an average one-bedroom apartment rose by 23 percent; two-bedroom units rose by 27 percent. Market rates for two-bedroom apartments currently range from $950 to $2,400. The city survey does not include rents for larger apartment units, which are few in Pleasanton, or houses.

"People in our complex just got the latest increase, which was close to 30 percent. With rents at $1,500, that's $450 more," said Michael Smith. Smith, who asked that his real name not be used for fear of retribution from his landlord, said that he and his wife worried that they will not be able to afford the new rents when their lease is up in March.

"Market rates are just an excuse for property management companies to come in and exercise their greed," Smith said, adding, "and there's nowhere else to go." Already, he reported, one of his neighbors has decided to move to Modesto.

"Every time I get a salary raise, I don't get to keep any of it," his wife said. "It just goes toward rent, and the dream of improving your situation disappears."

Pleasanton Housing Specialist Scott Erickson reports that more calls have been coming in about the rising rents in recent months.

"I get a lot of calls from people saying, 'They want to increase my rent by X amount. Can they do that?'" Ericksen said. "And if there's nothing in the lease preventing it, they can."

In some cases, he said, the callers report that the landlord is raising the rent in steps, perhaps an $150 increase each month, over several months until a total rent increase of something like $600 is reached.

"I've spoken to a few people who are really at risk of being displaced out of the community because of what's happened," Ericksen said. "Seniors are the hardest hit because their incomes are not going up, and single mothers with kids and young families. Probably the saddest thing to hear is that people are being forced from the community, like survival of the fittest, because other people are out there who want those apartments."

Just as housing prices have jumped dramatically in recent years in Pleasanton and throughout the Bay Area, apartment rentals are experiencing sharp increases in the entire region as well. A May report by the nonprofit California Budget Project reported that less than a third of Bay Area households are able to buy the median-priced home in their community, compared to 55 percent nationally. At the same time, it reported that 45 percent of renters in the Alameda/Contra Costa County metropolitan area cannot afford the fair market price of a two-bedroom apartment.

Michael Smith points out that the high cost of rent adds to the challenge of eventually buying a home.

"We are hoping to buy a home in Pleasanton, as unrealistic as that may seem, and are trying to put some money toward it," he said. But the higher rents make saving for a home all the more difficult.

Pleasanton, like most California cities, has no rent control and at present, a landlord need only give the residents a 30-day notice for a rent hike of any size. The Pleasanton Housing Commission is presently talking about recommending a 60-day notice for increases or limiting rent hikes to once a year. However, such moves will do little more than add a modest delay to increases.

Housing Commissioner Betty Levin described the rental housing situation as urgent.

"With zero percent vacancy rates and rents going up very dramatically, unfortunately the city of Pleasanton is losing some of its below-market-rate agreements with some of the apartment owners in town and we haven't been able to renew them," she said. "That's something I would like to see us work on."

Yet, with the exception of the Promenade Apartments and several senior units, the complexes now offering the 450 below-market-rate units in town pegged those at rates considered affordable for those making 80 percent of the area's median income. That means they are relatively high - $1,082 for one-bedroom and $1,352 for two-bedroom apartments. In fact until recently, market rents at some of the older complexes were lower than those of most below-market units.

At the Promenade complex, rents for its 68 below-market units, targeted at those making 50 and 60 percent of the median income, range from $633 to $912. However, the two to three year waiting list will not reopen until February 2001.

Pleasanton Housing Commission Chairman Larry Levin said he has no problem with the free enterprise system and landlords "getting what they can" in housing.

"But my problem is that in all areas of housing, there's got to be some mechanism for providing affordability," Levin said. He pointed to Pleasanton's new inclusionary housing ordinance, aimed at compelling commercial developers to include affordable housing units in their projects, as one measure toward providing more affordable housing.

However, he says, the problem is regional and he hopes that Pleasanton can work closely with Livermore, Dublin and possibly San Ramon to address it.

"We have to be pro-active," he said. "I don't think we can look the other way and let other folks worry about it."

Nevertheless, comparatively speaking, Pleasanton has provided a fair amount of affordable housing already, said Ericksen.

"On a per capita basis, we are second behind Oakland," he said. "Pleasanton has a good record, but the need is so much greater." <@$p>