The housing market is doing very well, thank you, but not for renters or home buyers.
According to the California Association of Realtors, a two-bedroom apartment in California averages $3,000 to $4,000 a month. The median price of a California home is over $500,000.
The highest markets are Silicon Valley, the overall Bay Area, Orange County, Los Angeles, and San Diego. Coastal areas also sell at high premiums.
Investors flourish in major municipal hubs such as San Francisco and Oakland where their return on rentals and purchases are accelerated.
In tourist destinations where Airbnb flourishes, renters are agreeable to paying higher prices and then subletting by the day to visiting travelers.
As a result of high housing costs, people are being priced out of living in their local communities.
Berkeley Rent Board Commissioner Leah Simon-Weisberg explains, “There’s been the perfect storm. First off, the foreclosure crisis pushed back into the rental market. It’s made rentals the most lucrative way of making money for big investment firms. [Then] in California all of our redevelopment money was gutted—so there’s been no movement regarding affordable housing. And all the economic growth has been focused in a few places.”
The Costa-Hawkins Rental Housing Act facilitates high rents by prohibiting municipal rent increase limitations on certain kinds of exempted dwelling units. However another bill, AB 1505, if passed, would allow cities to opt out of Costa-Hawkins. In addition, activists in Richmond, Oakland, and surrounding areas have pushed in support of affordable housing with ballot measures and rental boards.
For more information on the need and push for affordable housing in California refer to The California Renters’ Revolt.