When an average or median price is moving less than 1%, let’s call it unchanged.
San Diego, which saw rent increases slow last year after a period of skyrocketing costs, continues to absorb drops following the start of the coronavirus pandemic.
ApartmentList.com, in its National Rent Report for June, reported that in the region, median rent stands at $1,573 for a one-bedroom apartment and $2,041 for a two-bedroom. Affordability remains an issue for county renters. The national median for two-bedrooms, by comparison, is $1,192.
Recent trends show that:
Rents in San Diego have decreased by 0.3% month-over-month, and are down 0.6% since the start of the pandemic.
Year-over-year rent growth in San Diego currently stands at 0.4%, lower in June than in the recent data.
The researchers noted that the pandemic “put a halt to normal moving activity.” That, combined with job losses, has “dampened the demand for rental housing across the country.”
“The economic fallout from the pandemic does not appear on track for the quick V-shaped recovery that many had originally hoped for,” the researchers wrote. “and this economic weakness is reflected in our rent data.”
This is normally peak season for rental activity. From 2014-2019, rent growth from March to June in San Diego averaged 1.2%.
North County rents are up sharply, year-over-year. The median price for a two-bedroom in Oceanside rose to $2,351. Though rents in Carlsbad fell the most, by .3% in the last three months, median rent for two-bedrooms there remains the most expensive in the county at $2,540.
Median rent in National City is the most affordable for a two-bedroom, at $1,323. It has fallen .8% in the last year, but just slightly since May.
San Francisco leads the nation in rent declines since March, followed by Orlando, Fla. and New York City.
A relief package is being considered – excerpts from the SF Chronicle:
State Senate leaders proposed a massive economic relief package Tuesday to guide California through its coronavirus budget woes by encouraging residents to prepay their future state income taxes and offering struggling tenants more than a decade to make up the rent they owe.
The rent stabilization program would give tax credits to landlords to forgive the rent of tenants who cannot pay because of financial hardships related to the coronavirus, keeping them from being evicted.
The tax credits would be equal to the amount of rent, spread out over 10 years starting in 2024, though landlords who needed immediate cash could sell them to other taxpayers. Tenants would pay back their rent interest-free to the state, also over the course of 10 years starting in 2024. Those who continued to struggle financially would be given exemptions.
Major details of the program, including how many months of rent would be covered, still need to be worked out. But Senate officials said it could benefit about 2.3 million renter households that have at least one worker in a sector of the economy that has seen major job losses during the pandemic. Forgiving that rent would cost the state between $300 million and $500 million annually, if none of it were paid back by tenants.
“This is not a giveaway to anyone. It’s not a free ride,” said Sen. Steven Bradford, D-Gardena (Los Angeles County). “The Senate is giving tenants and landlords a hand up, not a handout.”
The California Apartment Association, which represents owners and developers of rental properties, said it would work with the Senate to refine the proposal.
“During these unprecedented times, we appreciate the Senate pro tem’s creative effort to help tenants and rental property owners,” Tom Bannon, chief executive officer of the apartment association, said in a statement.
Other rent relief proposals that lawmakers have floatedinclude AB828, by Assemblyman Phil Ting, D-San Francisco, which would freeze evictions and allow courts to set up repayment plans for tenants, and SB1410 by Sen. Lena Gonzalez, D-Long Beach, which would create a fund to cover at least 80% of the rent that a tenant could not afford because of the pandemic, for up to seven months, if the landlord forgives the rest.
There aren’t many (if any) of the larger parcels left for big developments, but if the government was an easier and cheaper component, then new infill projects and the repurposing of commercial/industrial properties into residential could benefit – an excerpt from a CalMatters commentary:
If we want to begin to climb our way out of this housing crisis, where do we start? We can begin by fixing zoning, curbing the worst abuses of legacy environmental laws and lowering the mandatory fees that stifle homebuilding at the permit counter.
We’ve been long-time supporters of the Pacific Legal Foundation, a nonprofit legal organization that defends Americans’ liberties when threatened by government overreach and abuse. My brother worked there after he and the PLF Executive Vice President, John Groen went to school at Claremont Men’s College (the three of us played on the rugby team for two seasons!). Our good friend Larry Salzman is their director of litigation, and I appreciate him passing along the latest links to the ADU laws below.
AB68 is the state law that overrides local building and zoning codes, requiring ADUs to be permitted throughout the state subject to various conditions about health, safety, and nuisance. It allows for one attached, and one detached ADU be added to every SFR property. Here is the law:
The was augmented last year by AB 670, which prohibits homeowner’s associations from unreasonably withholding their permission to allow their members to develop ADUs in HOA-run communities.
PLF just petitioned this case to the California Supreme Court, asking it to decide whether all power to restrict ADUs is preempted by state law or whether local governments retain some discretion to deny the permit applications that meet state law standards.
The city of San Marino adopted building code restrictions that forbid homeowner Cordelia Donnelly from adding an ADU over her garage. Because state law dealing with ADUs fully preempts local restrictions, Cordelia has asked the California Supreme Court to recognize her right to create more housing. Story here:
A two-year-old, Culver City, California-based startup calledUnited Dwellingaims to tackle the affordable housing problem using data, creativity, and underutilized garages and backyards.
United Dwelling plans to eventually build thousands of Accessory Dwelling Units, which are basically 369-square-foot studio homes. The company said its units benefit homeowners who are looking for ways to supplement their income as well as tenants looking for low-cost housing options.
United Dwelling uses data to identify potential lots that would be suitable for its units. It targets mostly low-and middle-income neighborhoods, with some exceptions for workforce housing. The company at first was going to just remodel garages but discovered quickly it’s much easier to tear down old ones and start fresh. So that’s what it does. It replaces those garages with small, affordable and zero net carbon homes in low-density neighborhoods with no out-of-pocket costs to property owners.
It then sets a rental price for the newly built unit and manages the property on the homeowner’s behalf, keeping a share of the rental income. Upon completion of construction, United Dwelling gives the homeowner the option to buy the unit back from the company for just under $88,000. To keep the costs of construction down, United Dwelling aims to build at least five units within a two-mile radius in the same time frame. Its initial focus is on the Los Angeles region with plans to eventually expand to the Bay Area and other locations once its solidifies its process, according to Dietz.
Specifically, the company plans to build over 150 of its detached studio homes in Southern California in 2020 and over 1,500 in 2021 (assuming construction can continue moving forward as an essential function per Los Angeles COVID-19 policy).
“Affordable housing is one of the most daunting challenges facing California and other parts of the county that is both entirely man-made and completely solvable,” Dietz said. “Here, we can do something that’s incredibly relevant. The opportunity is truly immense. Affordable housing is pretty easy. All you need is inexpensive land and construction, and capital.”
When developer Ginger Hitzke first proposed an affordable housing complex on a parking lot in Solana Beach, she envisioned building 18 new homes for low-income families and adults at a cost of $414,000 per apartment.
More than a decade later, her project has shrunk in size by nearly half and become more than twice as expensive.
At $1.1 million per apartment, the Pearl is the priciest affordable housing project in the state and, likely, the country. It also serves as an alarming example of how political, economic and bureaucratic forces have converged to drive up the cost of such housing at a time when growing numbers of Californians need it.
“I have sticker shock,” Hitzke said. “It’s insane.”
Miguel Zamora’s saga, which is also the Pearl’s, began 30 years ago in a rundown, 1920s motel in Solana Beach, where he lived with his wife and four children. Hot water came and went, the roof leaked and toilets overflowed. Cockroaches, fleas and rats infested the rooms.
“It was all dirt. It wasn’t even paved. And it was quite ugly,” said Zamora, who worked in construction and as a dishwasher and gardener. “When it rained, it was really very cold. Everything would get damp.”
In 1992, the city of Solana Beach filed a criminal complaint against the motel’s Beverly Hills-based owner. As part of the settlement, the city demolished the motel, but agreed to provide Zamora’s family and more than half a dozen other residents new affordable housing by 1999.
Zamora and the others also received federal housing assistance vouchers, which helped him find an apartment five miles away from the old motel. His family has been living there for the last two decades, but the apartment they never received still weighs on his mind.
Should the Pearl or other low-income housing ever get built in the city, Zamora has the right to move in first. He longs to bring his family together in a place that feels more like home.
“I’d like to enjoy my grandchildren,” said Zamora, 67. “Because being apart is hard.”
Even though the deadline to provide the affordable housing was 1999, it took almost another 10 years for Solana Beach’s leaders to take the first step of asking developers to pitch projects.
Two houses on a 11,814sf lot in North Park. The smaller house facing Nutmeg Place was built by the Sellers’ parents in 1942. They built the larger house at 3115 Olive Street in 1956.
“Wealth is the vector.” That’s what sociologist Tressie McMillan Cottom tweeted last week, in reference to the spread of COVID-19 across both the globe and the United States.
Wealth is not the cause of every concentrated outbreak dotting the United States. But it’s the common denominator of so much of its spread outside of major urban areas. It’s the reason why so many of the coronavirus hot spots in the Mountain West — Sun Valley, Idaho; Gunnison County, Colorado; Summit County, Utah; Gallatin County, Montana — overlap with winter playgrounds for the wealthy. The virus travels via people, and the people who travel the most, both domestically and internationally, are rich people.
A party in the tony bedroom community of Westport, Connecticut, all the way back on March 5, became what one epidemiologist referred to as a “super-spreading event,” with infected attendees dispersing throughout Connecticut and New England, and one party-goer falling ill on a plane ride back to South Africa. In Idaho’s Blaine County, home to Sun Valley, more than half of the residential properties are second homes or rental properties, and more than 30,000 people fly into the regional airport during ski season alone. As of March 31st, 187 people in the county of 22,000 have tested positive, including local emergency room physician Brent Russell. Two people have died. The town’s small hospital has two ICU beds and a single ventilator.
“People come here from all over the world,” Russell told the Idaho Statesman. “Especially this time of year. When I’m in the ER, I get people from New York, Washington D.C., San Francisco, Seattle. Every week there’s people from those places. Most likely someone from an urban area or multiple people from urban areas came here and they just set it off.”
All over the United States, people are fleeing urban areas with high infection rates for the perceived safety and natural beauty of rural areas. Some of them own second homes in those areas; others are paying upwards of $10,000 a month, depending on the area, for temporary housing. The common denominator among those populations is, again, wealth — either their own or their families’. They can flee the city because their jobs can be done remotely, or they don’t work at all. They either had a vacation house already, or they can afford to fork over what amounts to a second rent, or second mortgage.
Not everyone leaving a big city because of the pandemic is heading for a vacation home; many people with mobile jobs are relocating to stay with family in suburban and rural hometowns. And many of the rural places that will eventually be hardest hit by the coronavirus are not upscale ski and beach towns, but small and often poor communities that have no tourist economy — or any of the infrastructure that comes with it. The resort areas seeing an influx of potentially virus-carrying city dwellers now are a kind of canary in the coal mine: a preview of how desperately overwhelmed rural areas across the country will be by the coronavirus, whenever it arrives.
From the coast of Maine to the North Shore of Lake Superior, hundreds of thousands of people have either already arrived or are scrambling to find vacant rentals. Some are taking precautions when they leave their primary dwellings, fully isolating themselves for 14 days or more in their new, temporary towns, as the White House has recommended for anyone leaving New York City. But many, presumably, are not.
“The worst part is that these second-home owners are coming up and acting like isolation is a vacation,” said Jen, 39, who lives in the northwest Colorado Rockies.
