According to data provided by Axiometrics, a firm that analyzes data on rental properties, Oakland’s rental housing prices grew 10% last year, making it the sixth hottest growth market for rental housing in the country, ahead of San Jose (#7) and San Francisco (#21).
Despite this growth spurt, Oakland rents, like its real estate, remain some of the most affordable in the Bay Area. By the beginning of 2014, average rental prices in Oakland were $1,868, compared to $2,631 in San Francisco and $2,295 in San Jose.
Oakland local reporter Liza Veale, who started searching for an apartment with three friends at the beginning of the year, confirms that it is a tough time to find an apartment in Oakland. “You have to come prepared with an application, credit report, proof of income,” she said. She reported a rumor that some desperate renters even show up with cash in hand as an advance on their rent.
The good news behind increased housing prices, according to Axiomatics, is that Oakland unemployment is shrinking. In April 2014, unemployment in the Oakland-Hayward-Fremont metro area had shrunk to 5.9 percent, although data for Oakland alone shows a figure of 8.9 percent, almost double the rate in San Francisco.
In response to a query from Oakland Local, KC Sanjay, Axiometrics’ Senior Real Estate Economist, said in an email, “Job growth is always a primary driver of apartment demand and rent growth. However, other factors do play a part. Oakland employment started to recover during 2011, and during 2012 and 2013 averaged 31,800 jobs or 3.2 percent growth. During the first quarter of 2014, job gain was 17,900 or 1.7 percent growth. In May, job gain was 24,000 or 2.3 percent growth.”
“However, current robust effective rent growth is due to mixed impacts from soft job growth and movements of renters from San Francisco and San Jose because of affordability,” Sanjay added.
“It’s really a shame that the statistics don’t seem to follow people when they’re looking at a geography,” cautions Causa Justa::Just Cause (CJJC) Co-Director Adam Gold. “New residents with jobs can set those statistics off.” He noted that people who can’t find work may simply be leaving the area. “A lot of the studies and statistics I’ve seen show that the tech boom jobs aren’t trickling down to people with other trades,” he said.
The demand in Oakland is greater for lower end units, called Class C by Axiomatics, than fancier digs. “The pressures to move on a lot of low income people are really high right now,” Gold said, referring to CJJC’s recent report, which showed that rents are rising the faster in gentrifying neighborhoods than historically affluent areas of Oakland.
“We’re working really hard to pass a new ordinance that would control how much landlords can utilize harassment to push people out,” Gold said. Noting that market pressures on housing are really strong right now, he added, “As the housing crisis heats up, there are things that can be put in place to help hundreds and even thousands of people a year.”
Veale is currently taking a break from her months of apartment hunting. “I’m pretty sure my only shot is going to be a peer-to-peer transfer of the lease,” she said. “I’m on a Facebook group where people post subletting opportunities all the time but also announce when the whole house is going to be available. If you can arrange something with them before the house goes up on Craig’s List you have a much better shot of being picked.” She added, “And if you’re lucky, the landlord might not even raise the rent.”