
San Francisco rents increased by 13.5% in 2014 - dbg067
http://blog.zumper.com/2014/12/san-francisco-apartment-rents-rose-by-13-5-in-2014/
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jdhawk
Austin isn't much better.

We have a 9% jump in the last 6 months.

[http://www.rentjungle.com/average-rent-in-austin-rent-
trends...](http://www.rentjungle.com/average-rent-in-austin-rent-trends/)

[http://kxan.com/2014/08/01/austin-hottest-real-estate-
market...](http://kxan.com/2014/08/01/austin-hottest-real-estate-market-in-
the-us/)

While these seem like peanuts for Coaster's, its having a pretty huge effect
on long time residents. We're undergoing a building boom that feels insane.

~~~
gojomo
An actual building boom offers better hope that at some nearer point, the rent
increases will pause and reverse.

~~~
jdhawk
You'd think so, but the last 3 years have not brought relief...I'm not
complaining about housing prices - I've owned for a while, but I feel for my
renting friends.

Traffic on the other hand...that's something to complain about

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coldcode
In Arlington, TX where I live I could buy a high quality 3500+ SF house with
pool and an acre for $3000 a month or so.

However downtown Dallas apartments are approaching $2500 because the traffic
is so bad people want to live in town.

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sarciszewski
[http://www.miniwebtool.com/doubling-time-
calculator/?r=13.5](http://www.miniwebtool.com/doubling-time-
calculator/?r=13.5)

At this rate, rent will double every 5-6 years.

~~~
ryanklee
> At this rate

Be wary of any trend extrapolation. Better to figure out the dynamics
underlying changes.

In this case, the rate will change way before rents have the chance to double.
Rental markets are cyclical. In simple terms: They go up; they become
unattractive to renters; they go back down.

~~~
7Figures2Commas
There's no doubt that in many areas, including the San Francisco Bay Area, the
current trend is not sustainable. But I think you're underestimating some
fundamental shifts that have taken place that will put a floor under rents.

First, in the wake of the Great Recession, many folks are simply not able to
buy homes. They can't meet more stringent lending standards and while there
are efforts to make mortgages more accessible, a repeat of what you saw in the
last housing bubble isn't likely any time soon. Making matters worse for folks
still getting their financial footing is that home prices have appreciated
considerably over the past several years.

Second, you need to consider demographics. Most young people can't afford to
buy homes (more and more of them are living with their parents into their late
20s and 30s), and surveys indicate that home ownership is generally less
important to younger people.

Finally, in some areas, including some of the most desirable parts of the Bay
Area, there is realistically not going to be a significant increase in supply
any time soon, so demand is likely to exceed supply for the foreseeable
future.

Obviously, another recession would put a damper on things and double digit
decreases in average rents are even possible in the hottest markets under such
a scenario, but people waiting for $1,500 studio apartments in San Francisco
shouldn't hold their breath.

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tinbad
The rent prices in SF (and around) have baffled me ever since I moved here in
2011. Can anyone explain who is supposed to be able to afford $3k+ for a
studio?

Me and my gf both work in tech (making well north over 100k each) and between
the two of us we barely can afford a 2bedroom apartment for about 3k/mo. I
can't imagine living by myself and paying such insane amounts on rent alone.
After adding in things like student loan payment, car payment and
groceries/living expenses there isn't much left to save or do anything extra?
(Don't even get me started on trying to "buy" a place and coming up with a
downpayment, which is very different dynamic on by itself)

So, I can only assume that everyone who is able to drop 3-5k on rent alone
must be making 200k at least? There can only be that many "Directors of
engineering", "Heads of dev"? Clearly I am doing something very wrong here.

~~~
krigi
I live in SF and I work in tech. I make north of 100k and my rent is 2k. Your
situation seems bizarre to me.

If you and your girlfriend make north of 100k, then you're pulling in
cumulatively 13k-15k/mo after taxes. At $3k/mo your rent is below the commonly
cited <33% of take-home income for housing. With at least $10k left over
between you, why is it so difficult to save? I could very easily save 20% of
my take-home or I could "upgrade" to a $3k/mo apartment. The only major
payment I don't have in common with you is a car payment (and auto insurance).
I'm also not particularly frugal, but I don't go eat at Saison every night
either.

You really are doing something wrong. I don't know if you're griping in vain,
but you and your girlfriend should review your lifestyle and make some
changes.

~~~
tinbad
We are definitely not living in financial hardship and I didn't mean to come
off as someone who did. I definitely consider myself as one of the privileged
ones and it helps that I have someone else contributing to the household. It's
hard for me to imagine however, how I would be able to survive on my own or
try and raise a family in current conditions, let alone being one of the less
privileged, meaning not working in tech and having to live off (way) less than
100k in and around SF.

Now that I think of it, no-one I work with (with families) live in SF, even my
boss and her boss (undoubtedly making north of 200k) all live outside the city
(and even outside the peninsula) in places like Castro Valley, Fremont, etc.
and most of those places have caught up pretty well with SF prices so I have
no idea where to go next. (We bought a house in Tracy, CA that we are renting
out, which was the closest place we could afford to buy).

I can't even begin to think where the next generation of workers will be
living and in what conditions. Seems to me that if the 'middle class' is
already being priced out of the city (and most of the bay area in general), in
another 20 years or so, the city will either consists of VCs/dotcom/execs or
prices will have to fall significantly.

~~~
runamok
My pet theory (with some anecdotal evidence) is that a lot of external
investors are buying up most of the inventory. And a lot of young people
making > 100k will spend large amounts of their income to live in the bay area
even if they have to have roommates, etc. Cities like SF and NYC do have the
advantage that you don't strictly NEED a car at least in some areas (and of
course the gas, maintenance and insurance that goes with it) so that frees up
a decent chunk of cash too.

What generally happens is once people start getting married and having kids
they move to other states. I have seen this with several friends.

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s_m
That's believable, but they don't cite a source…

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weissadam
The last time I visited SF, I saw an awful lot of new construction. Even
though I'm aware that it's unquestionably a landlord's market over there these
days, there has always been a sizable spread between what modern/new stuff
rents for and what the older stock rents for. I'd really have to see a
distribution of years since construction/last major remodel, to really believe
any data like this. To lump it all together seems naive to me.

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MrDom
Are these numbers so low because of rent control? I lived in a 300 square foot
studio last year that cost me $1400 a month. That exact same studio now costs
$2800. I've seen similar increases from craigslist posts throughout the city,
compared to what I was looking at last year. What I wouldn't give for it to
only have increased 15%.

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alexbilbie
It's the same across the pond here in London - 9.5% increase between October
2013 and October 2014

Average rent is now £1411 (~$2200)

[http://homelet.co.uk/index.php/homelet-rental-
index/greater-...](http://homelet.co.uk/index.php/homelet-rental-
index/greater-london)

~~~
dasil003
The benefit of living in London is that there is a super smooth gradient of
rent decrease as you move further out in all directions, and there is
reasonable commuter rail all the way. The downside of course is tiny rat-
infested 150-year-old boxes remodeled 30 times since then, each time with a
poorer job than the last. San Francisco has the upper hand here having burned
to the ground more recently.

~~~
ulfw
It's burned to the ground 108 years ago. Not THAT recent either...

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FreakyT
It continues to strike me as odd that there isn't more focus on building high-
density highrise housing in SF. Is this related to earthquake danger,
historical preservation, idiocy on the part of local politicians, or some
combination of these?

~~~
discardorama
And, to add to what everyone else said: there are out-of-towners who are
buying up this newly-built property; either as a place to stash some cash
(people from China, Russia), or as a crashpad for when they come in to town
(from other parts of Bay Area) for an event or something.

~~~
sdkaufman78
Not sure why parent is being downvoted. I personally know several rich
(corrupt?) people from China who have bought or are actively shopping for
homes here in the SF bay area. They still work & live in China, but from what
they've told me, their goal is to

1) Buy a house for their kids studying in the US; 2) Launder their money; 3)
Own a property outside of China as an investment; 4) Have a safe house in case
they need to flee the country.

The bay area is a popular choice for such people due to the high concentration
of Chinese immigrants / Chinese Americans already living here.

I'm not passing judgement, just presenting facts from personal experience.

~~~
discardorama
Yeah, I don't know why I was downvoted too... I was speaking from personal
experience also. I happened to be friends with a realtor, and he would tell me
about the crazy bids he was getting from China. A property in Pacific Heights
got 2 Chinese bidders in a bidding war, both buying it sight-unseen, all cash,
from China. Crazy times.

And I have friends in the Peninsula who have such crashpads in the City
(unfortunately, I didn't win the IPO lottery like they did).

So I'm not blaming "furriners" or "1%", just stating what my limited
experience has been.

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Pro_bity
I would love to say this is shocking, but it has become routine to see double
digit percentage increases in San Francisco rents. I am curious to see if the
increases were as extreme outside on the city.

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alex_duf
That's why most countries put regulation on rent increases indexed on the
inflation.

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tn13
My rent increased by 9% last year. This year it is increased by another 9%.

~~~
alex_duf
Your rent will double every 7-8 years if it keeps increasing that fast.

~~~
ryanklee
> if it keeps increasing that fast

Any reason you can give that it would?

~~~
alex_duf
If the tech bubble doesn't pop ?

