Tuesday, December 21, 2004

S.J. ranks No. 7 for expensive rents


Mercury News

Metropolitan San Jose is the seventh-least-affordable place in the nation to rent an apartment, according to a survey released Monday.

A renter would need to make $25.25 an hour, or $52,520 a year, to afford a two-bedroom apartment, the survey by the National Low Income Housing Coalition found. If the renter had a roommate, they would each need to make $12.63 an hour to afford the rent. California's minimum wage is $6.75.

According to Novato-based RealFacts, average apartment rents in the San Jose area are more than 30 percent lower than they were in early 2001, when rents peaked. Nonetheless, Silicon Valley remains one of the country's most expensive real estate markets, both for renters and home buyers, despite significant job losses in the past four years.

Residents of metropolitan San Francisco, which the survey defined as including San Mateo and Marin counties, live in the nation's least-affordable area, the survey found. Renters there require an income of $29.60 an hour, or more than $61,500 a year, to pay for a two-bedroom apartment.

Santa Cruz-Watsonville and Oakland also made the top 10 list of least affordable areas to rent, with ``housing wages'' of $25.90 and $25.81, respectively. By contrast, the national housing wage is $15.37, according to the annual ``Out of Reach'' report. The report covers every city and rural area in the country.

``Whether you are in Boston or Nashville, L.A. or Dallas . . . if you are a member of the low-wage workforce or an elderly or disabled person on a fixed income, you can expect to pay more for modest housing than you can afford,'' said Sheila Crowley, the coalition's president.

The study's affordability measure is based on tenants spending no more than 30 percent of household income on housing costs, including rent and utilities. But data from the 2000 census showed that about one-quarter of Bay Area renters, for example, pay 40 percent or more of their income for housing costs.

The rental rates used in the study are based on the U.S. Department of Housing and Urban Development's ``fair-market rent'' estimates for 2005. In the San Jose area, which includes all of Santa Clara County, HUD's fair-market rent for a two-bedroom unit is $1,313.

HUD's figures are used to determine how much rental subsidy is paid on behalf of low-income people enrolled in the federal Section 8 program. Those numbers are often the subject of controversy. Last year's rent of $1,821 for a Santa Clara County two-bedroom was called too high by some, who pointed to the fact that rents began falling in the county following the technology bust of 2000.

That rent figure made San Jose the nation's least-affordable metro area last year. San Jose's fall to seventh place doesn't mean that rents dropped drastically in the past year; it only reflects a change in how HUD gathered the rent-price data.

Candy Capogrossi, deputy executive director of the Housing Authority of the County of Santa Clara, said HUD's new estimates for one- and two-bedroom rents are ``pretty reflective of what we had. . . . We agreed the market had softened.'' But the rents for three- and four-bedroom apartments are too low, she said, and the housing authority is asking HUD to revise them.

Crowley said that although this year's data cannot be compared reliably with last year's, local leaders can look at the hourly wage required to afford a two-bedroom place in San Jose this year -- $25.25 -- and conclude ``San Jose is in bad shape.''

Renter Emily Huynh, who works full time at Kinko's, would likely agree.

``It's too expensive,'' said Huynh, who rents a two-bedroom apartment for $1,000 a month with her sister in North San Jose.

Huynh, 25, wants to move, but is discouraged by what she's seen so far, including a two-bedroom priced at $1,200 near her work. The complex was offering one month of free rent, she said, ``but that didn't really help because after the first month I'd be living paycheck to paycheck, and I didn't want to do that.''


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