New Report Shows Rental Housing Costs Rising Faster Than Income

New Report Shows Rental Housing Costs Rising Faster Than Income title=
New Report Shows Rental Housing Costs Rising Faster Than Income
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Activists protesting the no-cause evictions at the Ventura City Council Meeting in December (Photo: CAUSE)

By edhat staff

A local advocacy group released a report on the housing crisis and found the cost of renting is rising faster than income in Santa Barbara and Ventura counties.

The Central Coast Alliance United for a Sustainable Economy (CAUSE) surveyed 590 renters in both counties with an emphasis on working-class and immigrant neighborhoods where people are dealing with the most severe impacts of the housing crisis. Renters make up 51% of the population in Santa Barbara County overall and nearly 60% in the City of Santa Barbara.

Of those surveyed, 43% had experienced a drastic rent increase, 15% had been evicted, and 39% had experienced unsafe or unhealthy living conditions in the past five years.

The report states that between 2014 and 2019, rents increased by 27% and wages only increased by 8%.  "This crisis is particularly acute in the Central Coast, which has not benefited from the growth of high-wage jobs in California's major urban areas, but has still experienced the ballooning price of land along the California coast. Working families in our low-wage industries like agriculture and hospitality are unable to afford million-dollar home prices at poverty wages," the report reads.

In 2017, 55% of renters in both Ventura and Santa Barbara Counties were considered rent-burdened, meaning they pay more than 30% of their incomes in rent.

Based on the survey, many families have had to move out of their neighborhoods, take on additional jobs, or cut down on expenses such as food and healthcare to cover the cost of rising rent.

"When families face this imbalance and are foregoing basic necessities, rent eats before them," said Rob Fredericks, Executive Director of the Santa Barbara Housing Authority.

The report also covers the local homelessness issue and states there are far more vacant housing units in our region than the number of people without homes. In 2017, the US Census estimated over 26,000 empty units, approximately ten times the number of people in the 2017 homeless counts for Ventura and Santa Barbara Counties.

Those surveyed stated lower and more stable rent as well as responsiveness from property managers to make repairs would improve their lives as renters. The report suggests a "Mandatory Lease Law" that requires landlords to offer tenants the option of a long-term lease as well as a "Rental Mediation Program" and the right to legal counsel. 

Rent stabilization is also suggested as the strongest type of tenant protection as new state law limits rent increase to 5% per year plus the annual rate of inflation, which is typically around 2-3%.

Specifically for local governments, the report urges leaders to make investments with a housing bond or donating land, offer no-cost options by streamlining permitting and approval for affordable housing projects, and work on alternative housing models such as community land trusts and limited equity cooperatives.

The full report can be viewed here.

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rwelsh Dec 14, 2019 12:02 PM
New Report Shows Rental Housing Costs Rising Faster Than Income

It all seems like a basic economics supply and demand course. Subsidies and public assistance and ignorant politicians simply muck it all up. I tried to get my child to take an accounting, economics or finance course in high school and in college. I lost the battle. My child is smart, but not educated in macro/micro economics... just like most everybody under a certain age. There are no mandated high school economics courses teaching reality. So people vote with their emotions... or don't vote at all. Rent control, subsidies and high density housing aren't the answer. It just makes for a less desirable place to live. If you can't afford it, move, get a better job, sell drugs, or become a politician who is bought and paid for. That's reality.

a-1576494004 Dec 16, 2019 03:00 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

Teaching financial literacy is anti-California’s Socialist Manifesto. The CA Government leaders want dependent kids to vote for free and subsidized living rather than delay gratification by working smart for higher life satisfaction.

EastBeach Dec 14, 2019 12:41 PM
New Report Shows Rental Housing Costs Rising Faster Than Income

The capitalization rate for smaller residential rentals in the city of SB is arguably around 4% give or take. So this what mom & pop landlords can expect. They will often accept lower net returns to keep stable tenants. But large/institutional landlords, especially if they're part of a public/private REIT, will want more. Remember, cash has been CHEAP since the 2008 recession. This has enabled large players to become even larger. Most folks don't realize this. Furthermore, the majority of those in the survey reported that they live in large apartment complexes - these are not mom & pop investment vehicles. I'd love to see a breakdown by owner type in the rental market.

EastBeach Dec 14, 2019 01:07 PM
New Report Shows Rental Housing Costs Rising Faster Than Income

Skimming the survey results I noticed ..... reported rents for a 1BD apartment in SB increased by 12.5% over the period 2014-2019 which is 2.5% annually. But for Santa Maria, 5-year & annual increases were 55% and 9.5%. Holy smokes! For Oxnard it was 29% and 5.5% which is close to the CA state annual increase cap of 5% (if you don't factor in inflation) which I believe applies only to older rental stock. Santa Paula was 30% and 6%. Ventura was 38% and 6.5% ....... Somebody may want to check my math, right now I'm on a tiny laptop with tiny keyboard so may have made a mistake.

EastBeach Dec 14, 2019 01:21 PM
New Report Shows Rental Housing Costs Rising Faster Than Income

Last post .... the Fed's wage growth tracker shows that for the bottom quartile (lowest 25%) of wage earners (which is likely part of the survey group) median wage growth during survey period bounced from 2% to 3.5%. Just wanted a number to compare against annual rent increases.

a-1576493375 Dec 16, 2019 02:49 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

My social security only increased 1.5%. I get $805/month after the feds take out mandatory Medicare which I do not want or need. I’d be healthier eating and having secure shelter. Most of us only need 260 sq feet. Why build big units?

Tee Gee Dec 14, 2019 06:07 PM
New Report Shows Rental Housing Costs Rising Faster Than Income

I'm closing in on seventy years of age. In the mid 1970s I made 4.25 an hour working retail, was a full time college student, and rented a studio apartment in a decent district of San Francisco for one 160. dollars a month.
Carry those figures to today:
That studio (3700 20th Street) rents today at over 3000. dollars a month. Approximately 18 times as much. If we multiply my 4.25 an hour times 18 we get over 75 dollars an hour. There's your inequality . What is the solution? I don't know. I'm just illustrating facts.

a-1576492961 Dec 16, 2019 02:42 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

Like you in1973, I rented for $450/ month at Buchannan and California Streets in SF. I made $650/mo, walked to work, ate the food left on patient trays. Fast forward 47 years. My young 25 year old son lives at Buchanan on Pacific.. his rent is $9300/mo — however he earns $21,000/month. His refrigerator stocked , in comparison to mine being bare. Today’s young educated prepared workers in STEM or a vocational skill are fine. SBUnified Secondary has done an excellent job preparing students who come out of non- SBUnified Elementary Schools. If you’ve a child in a SBUnified elementary , get out or volunteer FT as a teacher assistant to ensure your child is ready for global competition. Prepare your child to be the best at whatever passion and your child likely can pay rents, or will be offered an exchange agreement to pay for what they cannot afford to pay. Too many parents ignore preparing their child with required skills. Teach your child your trade. My construction worker neighbor’s high school only educated son just made partner in a large construction firm because his parents prepared him well. BTW: he’s 39 years old and owns 2 homes: 1 he rents. What’s with those who cannot pay rent? Did they marry or parent too young?

a-1576511244 Dec 16, 2019 07:47 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

02:42 AM: If your son is making $21K / mo, he is well inside "the top 1%" (starts at $12.5K/mo+). Did he perhaps have have opportunities or privileges not accessible to all? You need to seriously ask yourself that if you cannot understand the difficulties had by others. While your advise is not wrong, what if their parents are already working two jobs, or they live in a single parent home, or a hundred other situations? Not everyone has the bootstraps to pull themselves up by.

letmego Dec 16, 2019 10:17 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

2:42 am - my children are in, or went through, SBUnified elementary schools and they are doing fantastically well. I know vast swaths of young adults (19-30) who also went through SBUnified elementary and are successful.

a-1576491524 Dec 16, 2019 02:18 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

STOP ENTITLEMENTS NOW! Good tenants are not evicted, they are valued. Their rents are rarely increased beyond the landlords expense increase for water, taxes, fees, repairs, and labor costs for maintenance. PRIVATE SMALL LANDLORDShave empty rentals all over Santa Barbara refusing to rent to demanding, militant, sue-crazed folks. Approached by reasonable prospective tenants, we will rent. Demanding people protest while others succeed in getting and keeping quality housing from responsive landlords.

Factotum Dec 16, 2019 09:45 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

Small mom and pop landlords get tenants by word of mouth through community contacts. What community organizations do you belong to? Canvas them for rental contacts, where you and your integrity are well known.

letmego Dec 16, 2019 10:15 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

Those landlords are few and far between, I think. Heck, I remember being a model renter 20 years ago or so, and my landlord raised the rent $330 in the first year, from $995 to $1325 a month. It's even worse now than it was then.

letmego Dec 16, 2019 11:36 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

FACTOTUM, actually no - a review of actual market rent history shows that the $995/month was market rate at the time. However, the rental being in Goleta was the issue. Our theory is that we took over the rental in late May (a relatively good time to get a place), and the owner's son took care of the renting while the owners were on vacation. The owners had planned on raising the rents between tenants, and were accustomed to renting to students (2 per bedroom), figuring that an extra $325 comes out to approx $80 each. The son did not get the memo and rented it to us at the prior rate. The $330 rental increase came over the space of 11 months, the final increase of $150 coming JUST before the fall semester the following year (funny thing that). Awesome time to be looking for a new place, let me tell you. Ah, the landlord is fairly well known for owning a LOT of property in town. We'd have been happy to stay for years and years. But unlike some, who find the "unicorn" landlords who only raise rents occasionally, and by reasonable amounts (perhaps my spouse's first landlord fit that bill), we had difficulties again after that, as we rented a condo that was suddenly sold 9 months into our renting of it. After that we gave up and moved to student housing for a couple of years. For sure saving up over many years to get ourselves a mortgage was the best long term strategy. STILL though, at current market rental rates we could rent our house for the mortgage payment, but it would not cover the property tax. That is the case for a fair % of the smaller landlords, who perhaps bought and then had to move out of town. It is still far cheaper to rent than buy in this town.

Bene Dec 18, 2019 03:53 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

Yes, I see your point 7170. I look at the pictures in news stories of tenants rights groups and their angry hate-filled faces, and all I can think is what landlord in their right mind would rent to that? These groups are trying to make an adversarial relationship between them and landlords, with the absurd presumption that ALL landlords are greedy and all of them are rich. Not only is the "rent too damn high" as these groups chant, but everything, including food, clothing, cars, gas etc. is too high. The expenses landlords pay for property taxes, maintenance costs, city fees, insurance, etc also are too high. When I can no longer afford to live in SB I will move, not try to force someone else to subsidize me. If you are a landlord look out though. The next thing these groups, which include the Aids Initiative group, are planning to force into law is removing a landlord's ability to choose their tenants.

sbsunny Dec 16, 2019 10:29 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

According to rent cafe, the average rent in Santa Barbara is about $2200. In a beautiful Salt Lake City, for example, the average rent is about $1200. Taking into account average salaries (according to payscale.com), this means about 20% goes to rent in Salt Lake City and 35% goes to rent in Santa Barbara. There are plentiful jobs available in both cities. This is just one example of another nice city where someone could rent for less.

Sooo, someone could choose to live much more easily in another city if they didn't want to struggle with rent in Santa Barbara. It is a choice.

If rents were dropped to average $1200 here in Santa Barbara, then guess what? We would have so many more people trying to rent here and even more housing advocates demanding that there is not enough housing and we need to build more.

Frederick Dec 16, 2019 10:44 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

Those of fortunate enough to own a piece of paradise we are indeed blessed. For those who cannot and probably never will be able to afford owning it's probably time to consider moving to a more affordable community where home ownership is still possible if you have a decent job.

PitMix Dec 16, 2019 01:37 PM
New Report Shows Rental Housing Costs Rising Faster Than Income

And those of you who are fortunate enough to own here and hire service people to work on your stuff, and police to keep your stuff safe, it's fine to have them live 70 miles away and spend a significant portion of their lives burning fossil fuels to help you out. Really it is a very precarious system that is one day bound to go bad; you got a little taste of that during the Montecito disaster with the 101 closed for a relatively short while. 6 hours to drive from Ventura to SB via Sta Maria.

ZeroHawk Dec 17, 2019 10:41 AM
New Report Shows Rental Housing Costs Rising Faster Than Income

right Fred...right, so people like you can control the market and push out the middle class and lower class? Think again. That won't happen. If you're a landbaron and charge obnoxious rent to the locals that work and support this city and county, then you are just part of the bigger problem.

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