SAN FRANCISCO (KCBS) — There’s increasing evidence the price of housing is blunting the Bay Area’s economic turnaround as renters continue to face mounting pressure.
Rental prices in the Bay are growing at the same pace as they were earlier in the year, but they continue to grow. Real estate website Zillow says overall U.S. rental prices rose 3.8 percent in August from a year ago, down from the 4.2 percent growth the month before.
The trend is encouraging, but rents have risen so much over the past few years, that any growth at all continues to eat into whatever disposable income renters have, especially around the Bay Area.
A joint study by Harvard University’s Joint Center for Housing Studies and Enterprise Community Partners Inc found that 11 percent of U.S. households will pay more than half of their incomes in rent by 2025, and the problem could be heightened by the lack of housing being built for lower to moderate income families, as federal housing subsidies have been cut in recent years, and builders lack the profit incentive.
Another recent study by University of California, Berkeley and University of Chicago economists suggested sky-high rents in San Francisco, San Jose and New York were constraining economic growth in those cities as compared with other U.S. metropolitan areas.
Apartment construction has been on the rise, up nearly 13 percent from last year, and as that stock has come online, it has helped reduce some pressure on prices, but clearly not enough to make a difference for many people.