Study: Berkeley has 8th highest rent in the Bay Area

Photo: Melati Citrawireja

Berkeley has the eighth-highest rent of 30 Bay Area cities, according to a May study by real-estate rental agency Zumper.

Renter Peter Silver can vouch for this — and he is feeling the pain.

Silver, who asked that we not use his real name, has a 7-month-old baby, he’s out of work and his rent is set to go up $500.

“I was a teacher for 10 years,” Silver said as he walked down Shattuck Avenue near the Cheese Board recently. “Now I’m looking for a job in the tech sector. That’s what you have to do to afford to live here.”


The median monthly rent for a one-bedroom apartment in Berkeley was $2,400 in May, according to Zumper, a San Francisco-based company. Two-bedroom apartments were going for $3,540.

Analysts said rents in Berkeley are high for two reasons: First, there’s little room to build new apartments; second, and most important, the tech boom has created strong demand.

“People are being forced out of San Francisco by high rents, so they rent in the surrounding cities,” said Crystal Chen, the Zumper data analyst who authored the May study. A flood of highly paid tech workers, many of whom are young and not ready to buy a home and settle down, has driven up rental prices in areas near San Francisco.

Zumper tracks data for existing family homes, single-family homes, multifamily and new construction leaseups. It analyzed more than 14,000 active listings in April across 30 metro cities for the study.

Beth Miles, another Berkeley renter, said, “Access to (San Francisco) is why Berkeley rents are so high. There are people who want to live in the city, but can’t afford to. There are huge housing costs in San Francisco.”

San Francisco topped Zumper’s list with a median rent of $3,370 a month in May for a one-bedroom and a cool $4,500 for a two-bedroom apartment. In fact, San Francisco was No. 1 nationally for the highest rent in the country, beating out even New York City.

With a median rent about $1,000 lower for both one- and two-bedroom apartments, it’s easy to see why Berkeley is attractive to tech workers, since it’s also close to San Francisco.

Not surprisingly, the most expensive cities after San Francisco were in Silicon Valley. For example, the median rent for a one-bedroom San Mateo apartment was $2,500 in May; Palo Alto, $2,680;  and Redwood City, $3,010.

Though lower than those in San Francisco and Silicon Valley, Berkeley rents are still higher than those of most East Bay cities, according to Zumper. For example, Oakland’s median rent for May was $2,060 for a one-bedroom, Pleasanton’s $2,140, and Fremont’s $2,170.

Oakland is a much larger city than Berkeley, with a greater variety of properties, so it makes sense that the median rent is lower. The median is different from the the average rent, which is derived by adding together all the rents and dividing by the number of units.

The problem with the average rent is that a few unusually expensive units could skew it higher, or a few rock-bottom rents could bring it lower, and it wouldn’t be a realistic representation.

The median rent is simply the rent in the middle, with half of all the rents falling below it and half above.

There is some good news, at least for San Francisco renters. While that city’s rents continue to be soul-crushingly high, analysts said they are decreasing year over year. Slower job growth and apartment construction in San Francisco have caused rents to fall.

San Francisco added 3,600 new units last year, one of the biggest reasons behind the softening in the apartment market. “Supply is finally catching up with demand in the market, so rent growth is starting to slow,” said Nat Kunes, a vice president at property management site AppFolio.

His statement was based on a study conducted by Axiometrics and AppFolio that found San Francisco rents fell 2.3% in the fourth quarter of 2016 compared with the same period a year earlier.

Both Chen of Zumper and Sydney Bennet, an analyst with Apartment List, another San Francisco-based rental site, estimated that San Francisco rents began softening about 12 months ago.

Unfortunately, the analysts didn’t think the good news will spread to Berkeley. Chen said rents in the Bay Area and Berkeley will continue to be expensive because “it’s expensive to build here.”

Bennet said, “There is limited land in Berkeley, so to increase housing stock you would have to re-zone single-family areas for multifamily housing, which can be controversial.

“That would need to happen for a large decrease in rents,” Bennet said, referring to the law of supply and demand. When supply increases, prices tend to fall.

“I don’t know if that’s the most politically feasible approach in Berkeley now,” Bennet said.

Informed of Silver’s dilemma, Bennet referenced an Apartment List study released in April, “Even experienced teachers can’t afford to live where they work.” San Francisco ranks first on the list of the country’s Top Ten most unaffordable cities for teachers; Oakland is No. 6 and San Jose No. 8.

According to the study, in the San Francisco metro area, Pittsburg and San Pablo are the only cities where teachers can live without spending more than 30% of their income on rent.

Silver, who formerly taught classes including digital audio production and multimedia, took boot-camp type classes in UX, also known as user experience design, to qualify for a tech job.

“I was excited about it. I did get a good resumé going, but I have not been employed,” he said. His wife is working and he tends to the baby in the daytime, he said, and applies for jobs at night.

Silver said his landlord is “a good guy,” and is not taking advantage of him with the rent hike, which will increase the rent to $2,400. “He has a daughter entering college. As a property owner, rent should at least cover his expenses,” he said.