Rents Blog: Daysog's data

Rents Blog: Daysog's data

Michele Ellson

Last fall, the City Council passed on a proposal to create a city-sponsored rents task force whose charge would have included collecting data on the Island’s rental market. So City Councilman Tony Daysog, who had favored the task force proposal, decided to collect some of that information on his own.

Daysog offered a brief presentation on U.S. Census data he culled at the council’s January 20 meeting, where council members considered some options for strengthening rights for renters. The upshot: While the median rent in Alameda falls below what the federal government considers unaffordable, it’s rising – as is the proportion of local renters who are paying unaffordable rents.

“There's a certain elegance in the way the data on paper reflects what's happening in Alameda in 3D,” Daysog said this week.

On January 20, Daysog said he didn’t think the data spoke to a need for rent control, but that efforts to strengthen the city’s Rent Review Advisory Committee, which mediates rent disputes, should be considered, along with more money for ECHO Housing, a countywide agency that helps renters and landlords settle disputes.

“The data don’t speak to a generalized approach to the rent issue,” he said. “But I think there is enough there to say we do need very particular case by case solutions.”

Alameda has seen a dramatic rise in the number of renters it houses – and an equally dramatic decline in their incomes in the wake of the 2008 recession.

According to American Community Survey data, the number of renter households in Alameda rose from 14,726 in the pre-recession period of 2005 to 2007 to 15,894 in the 2011 to 2013 post-recession recovery period. Renter households’ median annual incomes declined by nearly $8,000 over that same period, from $59,653 in 2005-07 to $51,712 in the 2011-13 time frame.

Daysog collected and reported the data in three-year time periods because the American Community Survey only collects data from a small sample of Alamedans each year, which makes it less reliable on an annual basis. While the data don’t really provide a clear snapshot of local rent and income trends in any given year, the do offer a sense of trends over time.

In contrast, incomes for the Island’s homeowners are twice as high has those of renters, and they rose during the time periods Daysog studied. The median household income for Alameda’s homeowners rose from $109,817 in the 2005 to 2007 time frame to $113,315 between 2011 and 2013, Daysog found.

“Someone mentioned a rent increase of $450 a month,” Daysog said to renters and property owners who attended the January 20 meeting. “You can imagine when you annualize the monthly rent increase, for renters, how that really draws down on persons’ constrained incomes.”

The median renter paid 29.4 percent of their income for gross rent in the 2011-13 time frame, Daysog found, an amount that includes contract rent and utilities; more than 30 percent is considered unaffordable. That, Daysog said, is a sign that the typical Alameda renter has affordable rent.

Still, the data show at least one sign that could be changing: The percentage of renters who were paying more than 30 percent of their incomes toward rent rose over the three time periods, from 39 percent to 46 percent.

But Daysog said renters’ relative lack of income was the key point. According to the Insight Center for Community Economic Development in Oakland, a single adult with one child needs to earn $55,725 to be self-sufficient. A single adult with two children needs to earn $66,326.

“That kind of underscores even more how just a slight change in the rent upwards disproportionately affects renters,” Daysog said.

Daysog said he collected the data because he wanted to get a sense of what renters’ experience has been in Alameda. In his presentation to the council, he listed objectives that included quantifying unaffordable housing trends and comparing them over time and also, comparing what’s happening here on the Island to neighboring communities (data for Oakland, San Leandro and Alameda County are included in the presentation).

While he’s not supporting rent control, Daysog did ask his dais-mates to consider increasing the city’s business license fee to provide money for both the committee and ECHO Housing, but council members didn’t vote to support it.

The council did vote to move forward with efforts to strengthen the rents committee and boost awareness of it and also, to collect more data about the rental market here and in neighboring communities (Daysog abstained from the vote).

“I am most interested in dedicating more funding especially to ECHO to be able to adequately handle to increased workload that will come its way given the heightened attention of the plight of renters in Alameda, and am open to any number of ways to accomplish this,” Daysog said.

Extra: Daysog’s presentation is attached at the bottom of this story.

Comments

Jon Spangler's picture
Submitted by Jon Spangler on Thu, Feb 5, 2015

Thanks for presenting Council member Daysog's data again--and in a more comprehensible form, too. It was hard to digest these statistics when they were originally presented, with the numbers going by quickly at the late hour when the rent discussions finally came up.

The current experience of the almost 400 members of the Alameda Renters Coalition shows that these dual trends--flat or decreasing incomes among renters coupled with rapidly rising rents--are continuing into 2015. This is a disastrous combination for housing stability in Alameda.

(One renter reported on our Facebook page recently that her new landlord told her the rent will be steadily increased this year until it reaches $2400 a month--nearly double what she is paying now.)

If anything, the situation is more dire now in 2015 than it was in 2013, but these worsened conditions are not yet confirmed by government statistics. The worsening conditions, however, strengthen the case for taking more aggressive measures to stabilize rents in Alameda.

The many people being hit with skyrocketing rent increases--despite their fixed or decreasing incomes--are being forced to move out *now*. They cannot wait for Alameda to ensure fairness in rents in 2016 or 2017 based on new statistical data. Will Alameda wait too long to act?

Submitted by JB (not verified) on Thu, Feb 5, 2015

I don't think it would be unreasonable to pass an emergency moratorium on rent increases above the consumer price index until the city can figure out what to do.

Submitted by JG (not verified) on Fri, Feb 6, 2015

A moratorium on rent increases might be OK if it includes a moratorium on the sale price of single family homes, fees charged by the City for the services they provide Monday thru Thursday, fees charged for work done by plumbers, electricians, roofers, painters, gardeners, and all of the rest of the business people who do the jobs that keep apartments habitable.

Submitted by Alan R. Simmons (not verified) on Sat, Feb 7, 2015

My rent has increased by 10% the past three years and will probably happen again this year. Inflation cannot keep up, nor will my social security check. This is not the way to treat long-term renters. The city should step in.

Submitted by kathryn (not verified) on Sun, Feb 8, 2015

Thank you for continuing to report on this very important rent crisis, particularly your report on who "owns" Alameda. I also appreciate Mr. Daysog's report on rent/income disparities. I would like to make three points:
1. Although the purchase / ownership of 5+ rental properties is fairly transparent, the purchase and subsequent rental of "private homes" is not. In Alameda, large houses have been divided up into less than five units and then rented out. A quick drive around town makes that obvious. The rental of private homes, whether to one family or four, is where we next need to look.
2. LLCs serve as shell companies for any entity seeking to purchase real estate. There has been an increase in cash purchases over the last 3 or 4 years. Private purchasers (that is, actual families vs corporations) cannot possibly afford to do that. Some cash purchasers have simply
paid more than the asking price, thus putting any normal buyer out of the running. Blackstone uses LLCs to purchase houses and their main focus is private homes.
3. On the issue some have raised about Prop 13: while this disaster of a law definitely hurts real families (we bought a house under prop 13 and the property taxes tripled), it does NOT hurt corporations or entities posing as individuals who take advantage of the exclusions. I am not referring to bloodlines exclusions. I am referring to how corporate. entitles manipulate the CIO (change in ownership) so that ownership is divided to avoid triggering reassessment. Here is a link on how to do that:
http://www.realestateinvestorlaw.com/Articles/Using-Exclusions-To-Avoid-...

And here's a link on prop 13 in general. Scan down to "corporate effects"

http://en.m.wikipedia.org/wiki/California_Proposition_13_(1978)#Effects_on_commercial_property_owners

This is part of what is happening here and across the country. See today's New York Times article on LLC money flooding high end property purchases. Granted, this is above little Alameda's range, but Blackstone, LLC purchases, Prop 13 manipulation by new foriegn buyers and non-local entities are the canaries in the mine. Is it possible for the real Alameda families -renters and owners - and the real Alameda Real Estate people -- not out of town -- to come together and protect t all of its residents and businesses from the vampires preying on this country?

These http://www.realestateinvestorlaw.com/AReassessment.shtml that: