Rent Increases in Berkeley

3000 block of College Ave.

Rents in Berkeley are rising dramatically. What’s going on? Two things are creating upward pressure on both rent- and non-rent-controlled units. These phenomena are:

1) The skyrocketing rents in San Francisco, which push people across the Bay, and
2) The ongoing construction of expensive new (thus not rent-controlled) apartment housing in Berkeley.

If you’re a doctor or high-paid techie, no problem. But if you’re a teacher or postal worker, good luck! Berkeley is becoming a bedroom community of upper-middle class professionals.

From $1817 to $3465
1300 block of Euclid Ave

This one-bedroom unit was rented back in 2002 at $1,550 to one tenant. Its 2014 rent ceiling is $1,817.93. Had it remained rent-controlled under pre-Costa-Hawkins rules, the rent ceiling would be $1,353.

The owner recently filed a Vacancy Registration stating that the unit had been rented to a new tenant on July 1 for $3,465. Still listed as one bedroom, still rented to one tenant.

From $1250 to $3380
1200 block of Alcatraz Avenue

This one looks like a flip, and sure enough, some pretty big rent increases have been taken. Here is the history:

All three units were rented out by the previous owner in 2007/2008:
#A was rented out in 2007 at $1,250;
#B was rented out in 2008 at $1,000;
#C was rented out in 2008 at $450 (it is a studio, but this still seems like a below-market rent).

In 2008 #A was claimed exempt because it was rented out to a Section 8 tenant, and #C was claimed exempt as not available for rent. (No change reported for #B.)

In December 2012, the entire property changed hands, and all three units were claimed exempt as owner-occupied as of that date, probably in error.

Then, in May 2013, the property was sold to a new owner. And sure enough, in August of 2013: Rents more than twice those charged in 2007/08!

#A was rented for $3,380;
#B was rented for $2,380,
#C was rented for $1,080.

The new owner has listed the property for sale several times – this is from one recent real estate listing: “Currently Producing $6840 a month from rent. THE HIGHEST RETURN ON THE MARKET IN BERKELEY! Average rent per unit is $2280. Over 200 applicants prior to August 2013 placement of current tenants. There are no substitutes for good quality of life & peace of mind! Maybe that’s why an all cash million dollar offer was dismissed?

From $3090 to $3690
1500 block of Walnut Street

This also seems to represent fairly big rent increases over the years, but it also needs to be said that the rent goes up as the number of tenants goes up.

In 2002, it was rented to 4 people for $2,200.
In 2005, it was rented to 2 people for $1,750.
In 2009, it was rented to 5 people for $3,090.
In 2012, it was rented to 7 people for $3,690.

Thus, not quite apples to apples. Without Costa-Hawkins rent increases, under Berkeley’s old system of rent control, the rent ceiling would be $1,326.

From $1600 to $3200
3000 block of College Ave

Two of the units have turned over and been fixed up. The tenant in the third unit, who had several cases before the Rent Board, recently passed away. We assume that in the near future the Board will receive a revised registration form raising the rent significantly.

While the owner has done substantial work on the property, it was purchased for a bargain price in 2008 and the owner only pays taxes on a value equal to the average single family home bought in Berkeley this year, while soon his rents will total Over $110,000 a Year for this triplex.

Unit 1
Before Costa Hawkins increase — $674.27.
After Costa Hawkins increase — $3,300.00 (8/1/13).

Unit 2
Before Costa Hawkins increase — $581.61.
After Costa Hawkins increase #1 — $1,600.00 (8/1/12).
After Costa Hawkins increase #2 — $3,200.00 (6/1/13).

Unit 3 (long-term rent controlled tenant) — $670.46.

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