Jake responds to the question and observation, “What do people think of the explosion of rent prices in West Oakland and beyond? There is a very real thing happening right now which is a result of the skyrocketing prices in San Francisco.”

I have been paying close attention to the housing market for the past few years, first as a squatter and then more and more as someone looking to buy a house. I have wanted to own a house for a while now and I realized that “squat-to-own” is harder than it might seem, and it seemed like buying could be realistic for me because I had money saved up.

I can tell you all kinds of details about the housing market in West Oakland and in general, and a bit about loan markets, and a bit about gentrification as it pertains to West Oakland. The center of your question, though, seems to be: “What do people think of the explosion in rent?”

Jobs for software people in the Bay Area (even as far away as Google) grew, so there were more people with good salaries looking for places to live. These people are pretty good at networking, so the word went out that San Francisco and Oakland are good places to live, so demand for housing grew, so prices went up. Oakland and San Francisco both have tenants’ rights, extremely strong laws that protect tenants from increased rent or eviction once they’re in. So in theory, as long as people pay their rent and stand up for their rights, they won’t be affected by this stuff.

In reality, though, most people don’t know their rights, and even if they do, they don’t want to stand up for them. A lot of times, I think it’s because they feel like moving somewhere else and they welcome the change. Then there are people who just aren’t making ends meet and can’t afford the rent where they are, even if it’s a good deal, so they get evicted. There are probably other stories that happen a lot, but those are probably the main factors causing people to leave where they are.

A lot of houses in West Oakland are, or were, bank-owned, meaning the banks made loans on the houses (sometimes to owners of fully paid-off houses looking for cash in hard times) and the loans didn’t get paid off, so the banks foreclosed. This was happening in West Oakland long before we heard about it happening to white people in the news in 2008.

The people in West Oakland who have held onto their houses since before the recent market craziness are living very well. They seem to like their new neighbors and the reduced crime very much. Also, since the values of their houses (which they own outright, or are successfully paying the mortgages on) are going up, which makes it easier for them to shop for better mortgage rates or borrow money against their houses if they want.

Even people who are renting in those neighborhoods are benefiting, because while their rents don’t go up, the crime in their neighborhoods goes down.

I think it’s probably bad for drug dealers (like the ones at 8th and Henry), because it’s harder for them to get away with business as usual with so many squares around. I’m not really sad they’re getting a bad deal, though.

But back to your question: “What do people think of the explosion of rent prices in West Oakland and beyond?” Certainly people who are trying to move into the neighborhoods from somewhere else are not benefiting from rent control, because they are moving in fresh. Others and I were renting a place when it came on the market in September, and we were the first ones in there. We got a good deal, and the landlady is getting a good return on her investment. She was able to buy the house because she had money ready (either cash in a bank account or a pre-approved loan) and she knew what to look for when it came up for auction.

So the point is, these new people arriving at the neighborhood are having to pay what is called “market rate.” It’s a capitalism thing, and it’s not new. I don’t like it, but it’s certainly not surprising to me, nor should it be to you. I’m sure people who don’t make as much money as others, and find rents in the area to be too high, really don’t like it. Software people working at Google think it’s fine, and they only think about it once a month when writing the check. It’s low for them.

I am biased because of my situation, of course, but I definitely feel like, if people put more effort into hunting down good, cheap rental situations in cooperation with others (the house where we were rents for $2450 a month for five rooms, one of them tiny), they can get relatively decent rent, but someone has to be approved as a master tenant and has to come up with first and last months’ rent and deposit: $7500 in that case, which is easy for a software engineer, but not as easy for an unemployed activist.

There is a city-run program called ECHO which helps people get into places if they have enough money to pay the rent, but not enough for the deposit and last month’s rent. There are other programs for people who aren’t making a lot of money, but still need housing, but I don’t know much about them. One of them is called Section 8 housing, for example.

We got the house we just bought because I was watching the county tax auctions for the third year in a row, and I had been trying to buy a house for a while, so I was ready. I couldn’t have done it without help though, or my father, who loaned me money for long enough to get a proper mortgage, which is easier to get once you already own the house. Also, the sellers in this case would probably not have waited for me to get approved for a mortgage.

So all in all, I would say that the more people pay attention to what’s going on around them (gentrification, property values, or lack thereof) the more they can work it to their advantage. People who aren’t aware of trends in rent going up or down can leave a rent-controlled situation when they don’t have to, and have trouble finding another deal as good. People who bought houses years ago on bad advice got taken advantage of, and a lot of them ended up evicted.

There were also a lot of houses in West Oakland that were owned outright and fully paid off, but when the owners left their houses to their kids, they didn’t realize the value of them, and of course the banks did. Until we change the system to be more fair, and even once we do, it’s important for people to realize the power of seeing the big picture of what’s going on around them.

6 Responses

  1. mebbenot

    You gloss over two things that jumped out at me immediately:

    You spent time slumming in a predominately black working-class area.
    Then you got money from your parents to buy the property you wanted.

    Whatever else you think you’re doing that’s so positive, you took full advantage of white privilege to be wherever you wanted–at the beginning not even paying rent to anyone!–and then using money from your dad to establish a permanent stronghold. When white people earn more and keep their jobs and have 20 times more wealth than black people, out the gate your article reads like self-justifying, cynical nonsense. Where are young black families who want to buy supposed to turn when black people get bumped from jobs willy-nilly and don’t have an inheritance coming–your dad?

    I think you need to do some real soul-searching about why you’re in Oakland. There are places that are chock-full with poor and working class whites–why aren’t you colonizing those places? Gentrifiers are always going on and on about the good they do for poor communities. Why are black folk always the “beneficiaries” of displacement?

    Reply
    • David Cutter

      mebbenot,

      Many white people have been displaced from Oakland – so many moved to Hayward, Concord, Castro Valley, further inland. Oakland used to have way more white working class families who have also been gentrified by both white and black middle class folks.

      As to your point about the wealth gap between white and black, it’s important to compare “categories” and not groups of people. If you compare married, college-educated couples that are white and black, black couples earn more on average than their white counterparts. It’s just that there aren’t enough black people in that category. There is a formula to creating wealth and many black folks (at least in Oakland) aren’t as interested in the long time horizon required for that formula – deferred gratification, investment in education, deferring children, getting and staying married. The median age of black people in Oakland is much lower, and the ratio of dependents (children) to adults is much higher. Plus, there are fewer homes with two earners. Hard to create wealth with that approach.

      Reply
    • A

      David’s comment above this explains some of the major reasons why there’s such a huge gap. Culture (thug life vs. productive), family values, and education are major pieces. That’s not to say that there isn’t any black families who values those items, but on a macro level, especially here in Oakland, its apparent that an alarming amount of black families do not value those type of values. It’s not a secret that many of those families come from broken families which another family member is raising children instead of the mother and/or father.

      I’ve volunteered on several occasions to work with minority high school students in at risk areas to get them interested in pursuing education to better themselves. We’ve had quite a few success stories but overall the majority of kids regress and go back to living unproductively. Typically the kids are not supported at home or their community to change what they value or what is important to get ahead.

      The questions is, what do think mebbenot is the reason why this gap exists?

      Reply
  2. Pablo

    I find it difficult, even worthless, to read commentaries by unknown authors. All we know is that someone named Jake has an opinion, but nothing about who Jake is or why he is qualified to comment – other than being disabused of the notion that he could ‘squat to own’ ! Please provide some info on the writers so we readers can get a sense of where they are coming from.

    That being said, the term ‘gentrification’ is overused and misunderstood and doesn’t address any real issues of the need for affordable housing for the working class.

    Reply
  3. Jerry

    Gentrification is just another code word used by the left that is aimed to discriminate and ostracize whites. It seems that the only whites accepted by blacks when it comes to sharing neighborhoods is white women, families, males and especially gays need not bother. Isn’t diversity wonderful?

    IMHO, “Gentrification” is a DOG WHISTLE FOR ANTI-WHITE. So the blacks want to keep whitey out. Smells like a civil rights issue to me. What Oakland needs is some good old fashioned Neighborhood busting.

    Why must a ‘historically black neighborhood’ be preserved at all costs but a ‘historically white neighborhood’ must be destroyed by federal law???

    Another point, Blacks incessantly complain that white folk don’t care about their communities. But when whites move in and improve the quality of the neighborhood, blacks throw a hissy fit.

    It’s pointless trying to help people who won’t or can’t help themselves.

    Reply

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