Sabrina Belara, a full-time special education teacher at Downtown High School in Potrero Hill, says it’s crucial to live in the city where you teach.
After she was abruptly evicted from her sublease in the South of Market Area last September, she took advantage of the softer rental market in San Francisco and found an attic unit in a Mission District home for $1,800 a month.
News stories abound on San Francisco’s vacancies and plummeting rents: The vacancy rate for the approximately 3,000 property owners of the San Francisco Apartment Association is 27 percent, according to Janan New, the nonprofit organization’s director.
Rental prices are down 22.6 percent for a one-bedroom, according to Zumper’s year-end review.
Shazam! To some, after years of ever-increasing rents, San Francisco appears to be a renter’s market. But, alas, for many working-class residents and middle-class professionals, rent in San Francisco remains steep, if not unaffordable.
Belara, for example, works two side gigs, as a cooking teacher and a caterer, to pay for her $1,800-a-month attic. Moreover, rent consumes half of her income.
“To use the term ‘renter’s market’ right now is still speaking to a housing market inflated by gentrification, the tax breaks tech companies have been given by our city and the opportunities and mobility gentrifiers have,” Belara said.
Even though renters report being able to negotiate small reductions, like Belara, many tenants said they’re still paying more than the 30 percent that is generally considered a wise limit.
Each week, the San Francisco Housing Rights Committee takes hundreds of calls from tenants unable to pay rent because of the pandemic, said Sarah “Fred” Sherburn-Zimmer, the housing group’s executive director.
But many have negotiated with their landlords or property managers to reduce existing rents or rental listing prices, according to Sherburn-Zimmer as well as more than a dozen landlords, property managers and renters interviewed.
Josh Carter, a veteran, photojournalism student and part-time mental health clinic worker living in the Inner Richmond, asked his landlord for a $700 discount when his neighbor moved out. They bargained a $150 reduction, bringing his monthly rent for a two-bedroom apartment to $3,500.
Ayran Michaels, a full-time technician at Mike’s Bikes in SoMA, sent his landlords evidence that vacancies were going for less. He signed a 12-month extension in return for a drop from $2,000 to $1,700.
His coworker Corey Browning asked his landlord for a $300 decrease for a “kind-of” one-bedroom in the Inner Richmond. The landlord offered a $150 reduction, to $2,350 a month, but Browning found a place for $2,200 — with a washer, dryer, garage and better bedroom to boot — and moved out.
Browning, who works another part-time job and splits the bill with his girlfriend, spends around 30 percent of his income on rent.
Michaels, who swings shifts as a barista and splits the bill with his wife, spends just under 50 percent of his income on rent.
Carter, who gets paid through the GI Bill and splits the bill with his wife, expects to spend around 70 percent of his income on rent.
“Even though rent prices have fallen, it’s still insane … it’s just not quite as absolutely bonkers,” Browning said. “It’s hard to really call San Francisco a renter’s market — it’s more [of] a renter’s market than it was.”
Smaller owners squeezed
A year ago, no one would ask Rebecca Pearson, owner of SF Life Real Estate Inc., for cheaper listings.
These days, every tenant offers less than the asking price, she said.
For landlords, the consequences of the changing market largely depends on their total income, what fraction of their income comes from rent and whether they’re paying off a mortgage, said Noni Richen, president of Small Property Owners San Francisco.
For smaller property owners in particular, expenses like electrical, sewage, garbage, maintenance, repairs, property taxes and insurance add up, said Richen and New, the director of the apartments association.
“It’s not like we just sit on our piles of gold and run our fingers through it,” Richen said.
Price reductions vary with the neighborhood — rent in SoMA, for example, is more affected than in the Sunset because of the difference in job loss and the predominance of housing across the neighborhoods, according to New.
Mike Hirner, a decades-long real-estate broker and landlord, has had tenants leave two of his apartments, but avoided other vacancies by reducing rent for four of his other tenants. Staying competitive can create good showings that yield results, he said.
But he noted that he’s luckier than many when absorbing losses.
David Levy, a real estate agent for the San Francisco-based Baldini Property Management, said the property owners most impacted include those paying off a mortgage as well as senior residents, who often live on a fixed income and rely on rental payments to make ends meet.
One landlady managing eight apartment units is at risk of losing two of her buildings, said Richen, from the small property owners group.
The landlady has paid the mortgage on time for 20 years. But most of her renters are among the minority of tenants citywide who have stopped paying rent, and the eviction moratorium has prevented her from replacing them.
She hasn’t paid the mortgage in months, and East West Bank is threatening to foreclose both buildings. She would probably be financially ruined, Richen said.
“A lot of tenants assume that because someone owns property or multiple properties, they’re millionaires, and they can afford to rent this place out for free,” Levy said. “That’s plain not true. A lot of people who rent out their property rent it out because they need money to pay the mortgage or bills or expenses.”
The master tenant’s dual burden
Jazmin Dominguez will see the rent at her Parkmerced apartment nearly double to $2,100 a month if she doesn’t fill her roommate’s sudden vacancy.
No one’s picked up the $1,000 lease Dominguez listed in November. She may go to $800 and absorb the monthly loss until her own lease expires in June.
Responsible for renting and renting out, master tenants are especially impacted by the rental market and often hard-pressed to list units for less than their original price. Many are students who’ve seen a flux of roommates vacate with colleges’ transition to online instruction.
Dominguez, who attends school full-time and works retail part-time, is just beginning to recover financially after quarantining twice since November. First, she contracted the novel coronavirus; then, she flew out to commemorate the death of a relative who died from Covid-19.
She typically spends 60 percent of her income on rent.
“Honestly, if I cannot find someone by the end of this month, I don’t know if I will be able to pay it off,” Dominguez said. “But at the same time, I cannot afford to not pay it off because if I don’t, then it’s like breaking the contract, and the fees for that are much higher than what I need to pay for the extra spot.”
In her Richmond District apartment, master tenant Natalie Medved has had six roommates in the last year.
Because Medved was unable to fill the most recent vacancy, her rent doubled, and at $2,000 a month, it will consume 90 percent of her income as a full-time grocery worker.
“I take the brunt,” Medved said. “I find the people. I deal with the landlords.”
In this market, that puts master tenants like Medved in the most precarious position of all.