The coronavirus pandemic is driving rents down in San Francisco and across the region, reshaping a housing market that for the past decade has generated enormous profits for residential developers while displacing tens of thousands of workers from the inner Bay Area.
Rents are down 9% from a year ago in San Francisco and over 15% in some tech hubs in the South Bay, according to a recent report by Zumper, a rental housing search engine. That trend will likely accelerate as layoffs mount and workers, newly liberated by work-from-home options, flee the Bay Area for cheaper cities, according to housing experts.
While it’s too early to say whether the current health crisis will be a short-term dip or a longer-term correction in the cost of housing, it’s clear that in the next few months, renters looking for housing in the Bay Area will get a lot more for their money than they did a year or two ago. Owners are increasingly scrambling to get tenants to sign leases, offering months of free rent, signing bonuses and other discounts. New market-rate housing development is likely to stop, as builders wait to see how far rents tumble.
“The balance of power has shifted to the tenants — there is no question about it,” said Joe Tobener, an attorney who represents tenants.
Many landlords are proactively cutting rent — usually by 10% or 15% — as an incentive for tenants to stay, Tobener said. Other tenants are taking the matter into their own hands — reaching out to see if their current landlord will give them a better deal.
That was the case for Zenab Keita, who lives in the Landing, a 282-unit apartment complex in Oakland’s Jack London Square. Keita signed her lease in June 2019 for $2,600 a month. While she has managed to hold onto her job managing corporate partnerships in sports and entertainment, 66% of her compensation is contingent on deals, and those have vanished during the pandemic.
With her lease set to expire in June, Keita approached her landlord, Essex Property Trust, to see if she could get $400 or $500 taken off her monthly rent.
“They came back and offered $67 off,” she said. “I was like ‘You should not have even written that email. That was a waste of…