What’s the real average rent in Oakland?

Natalie Orenstein

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Until very recently, it was difficult to get a clear sense of how much people are paying to rent apartments in Oakland, and how prices have fluctuated over time. 

This story is the first in a series on what we can learn about Oakland housing from the city’s rent registry. Let us know what questions you want answered.

Media and government agencies often report on “average rents,” but those calculations are typically based on data from apartment listing sites like RentCafe or Zillow, which only tell part of the story. These numbers often reflect only apartments currently on the market and can skew toward certain types of properties whose owners feel comfortable using these platforms. The city has not historically tracked rent prices in a methodical manner.

But last year, Oakland created its first-ever rental registry. Landlords are now required to share detailed information about each of their rental units—apartments, studios, houses, even RVs—with the city on an annual basis. We obtained a copy of this new rent registry, which includes information like the amount each tenant is currently paying in rent and what they paid before their last rent increase. The registry also includes the date each tenant moved into their home, the property owner’s name, and the number of bedrooms and bathrooms in each home.

Oakland’s new registry still doesn’t provide a complete picture of rentals in the city. Only owners of properties built more than 10 years ago must register their units. This means the database includes all rent-controlled homes in Oakland and many additional properties, but nothing constructed since 2013, like a lot of the new tall buildings downtown. 

And according to the city, only about half of the units that should be in the rent registry have been entered so far. To incentivize landlords to follow the new law and register, the city prohibits any property owner who hasn’t signed up from raising rents or evicting tenants. Once the database is fuller, the city plans to make it publicly accessible, a spokesperson told us.

Despite the missing data, the registry is still the fullest, most revealing source of information about Oakland’s rental market yet, including information on more than 43,000 homes.

How much does an Oakland studio apartment cost? How about a three-bedroom?

We calculated the median rents for each unit size included in the registry. The median reflects the middle-value of all the rental prices in the database, or the middle-value for each type of home. This may be the most accurate measure of typical rents. The mean average rent calculation, on the other hand, can be distorted more by errors in the dataset or outliers. 

Before making these calculations, we cleaned up the data some. We removed all entries where rents were at least $10,000 per month or $100 and under. Reviewing the data, it is clear that most of these highs and lows are typos or, in some cases, extreme outliers. (That said, if you’re actually paying $52 million a month for a one-bedroom on Monte Vista Avenue, please contact us.)

We found that the median rent for all occupied studios in the registry is $1,493, while the  median for a one-bedroom is $1,746. For a two-bedroom, the median is $2,060, and for a three-bedroom rent it’s $2,550 a month.

The median four-bedroom rent is $3,174, and for rentals with five or more bedrooms, the median is $3,600. But it appears that there aren’t a lot of four-bedroom and larger rentals in Oakland, a subject we’ll return to later in another story.

Keep in mind that these averages do not include apartments built in the last decade, which tend to be the most expensive and are not subject to rent-control laws.

How much is rent control worth?

Most of Oakland’s residential buildings constructed before 1983, except for single-family homes, are covered by rent control, meaning landlords can only raise rents by a certain set amount each year—currently 2.5%. Rent control was established in Oakland in 1980 with the goal of preventing residents from being priced out of their homes. 

But when a tenant moves out of one of these apartments, the owner can set the new rent at any level for the next tenant. In theory, most landlords will charge the highest amount they can get, which is known commonly as the “market rate” rent.

To try to understand the effects of rent control on Oakland housing, we compared the median rents paid by tenants who moved into their apartments 2023 to the median rents overall. Those 2023 levels reflect something like the current “market rate,” since landlords were allowed to set those prices at whatever level they think new tenants will pay. 

The overall median rent, on the other hand, includes all the apartments where tenants have been living for years or decades, where their landlords can only raise the rents by a set, nominal amount each year.

For example, for tenants who started renting a one-bedroom apartment in Oakland last year, the median price is $1,977. That’s over $200 more than the typical one-bedroom rent in Oakland, which is $1,746. 

For a two-bedroom, the difference is $450, with 2023 renters paying a median of $2,510, compared to the overall median of $2,060. 

These differences could be influenced by other factors in addition to rent control. For example, units on the market last year may be more likely to have been renovated recently and thus may be worth more. The database also includes some housing that’s not subject to rent control, such as single-family homes and apartments built in the 1990s. However, the significant difference between what new residents are paying and what long-term tenants pay indicates that the policy has a notable impact. 

“Whenever there’s a vacancy, landlords go as high as they can,” said James Vann, founder of the Oakland Tenants Union, which advocates for stronger rent control. Vann criticized the Costa-Hawkins Rental Housing Act, the 1995 state law that curtailed rent control in California and allowed for “vacancy decontrol,” permitting any rent amount for a new tenancy.

“As long as these laws are on the books, rents are going to be at the very highest level. It’s going to add to the number of tenants being evicted or not able to keep up with rent,” Vann said.

The East Bay Rental Housing Association, a landlord advocacy group, has a different take on rent control, saying government-imposed limits on rent hikes “overly burden the wrong owners and subsidize the wrong renters.” 

Beyond rent prices, the registry includes loads of new information about the rental housing landscape in Oakland. In the coming weeks, we’ll continue to report on takeaways from the data.

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Natalie Orenstein oaklandside.org Housing & Homelessness,Renting in Oakland

SOURCE
2024-01-05 21:19:25 , The Oaklandside

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