November 8, 2012

“San Francisco Rental Market Drives Applicants to Extremes”

Now that this silly, inconsequential, election is over, we can focus on what we do best here in the Bay Area – increase housing prices. I’m so glad the election is over because now everyone can stop spending on campaigns, and spend more on buying homes. Or paying more in rent.

Recently, I read this piece and… well… frankly I was infuriated:

San Francisco Rental Market Drives Applicants to Extremes

by Sam Harnett | October 23, 2012 — 7:57 AM

San Francisco’s rental market usually cools down in the fall, but not this year. The average asking price for a one-bedroom in the city is now $2,673 a month, up more than 10 percent from last year. This big rent increase reflects a housing shortage fueled on one side by the recent wave of tech hires and the other by an absence of new units. In response, apartment hunting has returned to the frenzy of the dot-com boom, with prospective applicants packing open houses, forking over application fees and even engaging in bidding wars just to secure a temporary place to live.

I experienced this superheated market firsthand. My girlfriend and I spent three months this summer searching for an apartment. We saw over two dozen one-bedrooms, most for more than $2,200 a month, and almost all of them completely horrible. We’re talking shag carpet, mold, and converted garages with no windows. Even the worst places we saw drew crowds. The open houses were like some twisted beauty contest where you had five minutes to tell your entire life story, woo the landlord, and leave everyone else in the dust. Emil Meek puts it perfectly: the process “turns you into a monster.”

I met Meek and his girlfriend Alma Freeman outside of a packed open house in Potrero Hill. They are in their mid-30s and both have that stretched-out look of put-on smiles and constant heartbreak. Meek is a landscaper and Freeman works for a non-profit downtown. They have great credit and collectively earn $110,000 a year, but they still can’t find a place. Freeman says “it feels a little bit like you are looking on the sidelines and not really able to compete.” The desperation of the search has made them manic. They are arriving to open houses as much as an hour early, peeking into the windows to try and scope the place out, and doing everything in their power to get their application in before anyone else.

Even more worrisome Meek says, is how the process corrupts everyone involved. At one place they saw, the landlord was running a bidding war like it was some kind of game show. The couple had actually met the same landlord a week earlier at a different apartment, and there he had said he was looking to fill the vacancy with “just the right person.” At the second place, the “right person” had come to mean whoever was willing to pay the most money. He looked around at all the applicants and then said “sorry, it’s San Francisco!” As disgusted as the couple was, it didn’t stop them from putting down a bid of their own.

[snip]

Good grief.

1. These people should be pouring their money into mortgages and driving up prices, instead of being selfish, non-citizens and renting. Sheesh.

2. These landlords are such novices. Really? Only judging people by their incomes. You can do better than that! Let’s look at how professionals do it. Time for a flash from the past:

Home Front: Sellers can be choosers

June 17, 2005 12:00 am

By Amir Efrati / The Wall Street Journal

Within a month of putting her two-bedroom house in San Francisco on the market recently, homeowner Linda Gao had five offers, each one above her asking price of $699,000. So before accepting the most-attractive bid, she threw in an extra condition: If you want to buy my house, you have to feed the squirrels.

Two weeks later, she and the buyer hammered out a contract that included feeding the backyard wildlife, which Ms. Gao has done three times a week for the past two years. "I don’t think it matters if it’s a buyer’s market or a seller’s market," Ms. Gao says. "Anyone with a good heart would feed them."

In this booming real-estate market, prospective home buyers are encountering some unorthodox requests. As sellers are barraged by eager bidders, they’re seeking not only the highest price or wrangling over who’ll pick up taxes and closing costs — but some also are asking to stay in the house months after the deal closes, or requesting fixtures that typically stay with the property, such as refrigerators and diving boards. In Tempe, Ariz., one seller invited bidders to sit for interviews until he found one he thought his neighbors would like. A homeowner in San Antonio was happy to let her house go, but only to a buyer who promised not to renovate it.

"As a buyer you have no leverage in this market," says Bruce Ross Bernor, an agent in San Francisco. "You have to bite your tongue and go along with it."

[snip]

Some buyers aren’t eager to give ground. After Lisa Lai Fook offered the $499,000 asking price for a town house in Oakland, Calif., last month, the seller asked her to write a letter describing her background. Ms. Lai Fook walked away. "I’m really busy," says the 33-year-old chemical engineer. "To sit there and write a letter to someone I don’t know after I’ve put down a ridiculous sum of money is insulting."

Let’s face it… if you’re a property owner (a good person), if you’re not being demeaning and cruel to non-property owners, you’re not doing your job in helping those people understand their place in society.

Landlords! It’s time to turn up the heat! Demand that free cuddling be part of the lease! Demand that the renters feed the neighborhood capybara. Don’t have a capybara? Get one so that they have to feed it! Ask them to take a Meyers-Briggs test – but then throw it away just to make them understand you wanted them to waste their time.

Do it for the good of the Bay Area!

If you were a landlord, what would you do to renters?

Comments (9) -- Posted by: burbed @ 5:55 am

9 Responses to ““San Francisco Rental Market Drives Applicants to Extremes””

  1. Dewane Says:

    I’d make sure that everybody has a well-waxed mustache and a derby hat to go with their Edwardian collar. Including the ladies. Tally ho and pip pip, it’s all about being a distinguished gentleman in Frisco now, old chap.

    I’ve got a friend who lives up there and he’s touchy about this newest fad because I keep clowning him about it. Steampunk will age about as well as leisure suits and white shoes.

    He also gets mad when I call it Frisco. Frisco, Frisco, Frisco.

  2. black_dong Says:

    @1, you chanelling wooster?

  3. Divasm Says:

    #1, nobody in the RBA calls it Frisco. But it is much easier to find a house in say, Daly City. So suck it up 20-somethings and commute like I do!

    Sure I’m occasionally jealous that I don’t get to just walk down the street to cute shops and great restaurants that aren’t part of a major chain like Chili’s, Chevy’s, etc. But I simply couldn’t afford it when I was in my 20’s and now I want a backyard and parking. So I’ve always either driven or taken BART to work.

    We do rent a house to some tenants and I had thought our rent was in the “reasonable” range – about the same as the other houses on our block, adjusted for lack of pool, etc. But we allowed the renters to have pets, and I’ve been told we could have gouged them an additional $500/month for that…I guess I’m a sucker.

    Next time I’ll put in a clause that they all have to dress in Renaissance Faire garb and speak in iambic pentameter if they want the place.

  4. nomadic Says:

    burbed, nice to “see” you. I thought only madhaus created the tl;drs for this site!

  5. DreamT Says:

    I second Daly City, if you have a car. From Westlake Apts to Townsend/King, it takes all of a 10 minutes drive, and the rent is at least 40% cheaper than SoMa. BART runs to John Daly Bd. as well. The place is depressing in part because of the summer fog, but value-wise $/distance it remains anybody’s best bet if you have a job in SoMa and you’re just starting.
    If I were a landlord, hmm… for the few folks who can follow spoken French, here’s a NSFW version of a landlord’s market: http://www.dailymotion.com/video/xdvf5_l-immobilier-a-paris-excellent_fun
    Fortunately, San Francisco isn’t that bad yet.

  6. sfbubblebuyer Says:

    I rented in San Francisco before. I had a lawyer and an accountant for roommates and the lawyer had moved in when she was in law school, so it was below market rent, and we still thought it sucked, price wise.

  7. Tracy Tea House Says:

    My friend moved to Cole Valley from the Middle East, and she had to find a place to rent, with an agent, in one day. She had to sign a year lease and for $5000.00 a month, she has a parking space and a two bed apartment. She will move when the lease is up and her job who is subsidizing stops, but she will not stay in S.F. that’s $60,000 for one year, not including utilities… For that amount, they should have housed her at Santa Row in SJ.

  8. Real Estater Says:

    It’s a great time to be a landlord anywhere in the Bay Area!

  9. SEA Says:

    Is it a great time to own AAPL?


Leave a Reply

Please be nice. No name calling, no personal attacks, no racist stuff, no baiting, etc. Let's be nice to each other in the true Bay Area spirit! (Comments may be edited/removed without notice.)