Rents for older apartments in Berkeley have fallen to near 2018 levels even as inflation has risen sharply — a shift that some attribute to the city’s recent housing boom.
The median monthly rent for a one-bedroom, rent-controlled apartment in Berkeley was $2,295 in the third quarter last year, down from a $2,600 peak in 2022 and just $100 more than in 2018, according to city figures crunched by Berkeleyside.
Adjusted for inflation — with the Consumer Price Index up more than 25 percent since 2018 — rents are effectively much cheaper.
Housing advocates say the drop aligns with a surge in apartment and home construction. Since 2015, the city has more than tripled its average annual housing production, adding over 2,200 units in the past three years. UC Berkeley has also opened more than 1,500 new student beds.
“The timing of the rent drops correlates with the timing of the development boom,” housing activist Darrell Owens told Berkeleyside. “We spent almost 20 years debating whether building housing in Berkeley would reduce rents — I think the evidence is pretty clear.”
Local landlords agree. In a newsletter last July, the Berkeley Property Owners Association cited rising supply as a reason many owners “are no longer able to command the rents… they once could.”
Still, experts caution that other factors may be influencing the market. Rents are softening across the Bay Area, even in cities without similar housing growth.
UC Berkeley professor Carolina Reid noted the broader regional slowdown and called for more research, though she acknowledged “strong evidence that the trend toward rising prices has been stemmed.”
Some remain skeptical. Leah Simon-Weisberg, former chair of the Rent Stabilization Board, argued rent growth has stalled simply because prices maxed out what people can afford. She rejected the notion that new housing has helped low-income renters.
Yet data show median income in Berkeley rose over 20 percent from 2018 to 2023. Owens argues the combination of rising incomes and stagnant rents has improved affordability — even comparing some older units to the cost of subsidized housing.
“Students today have no idea how much better it is now than it was 10 years ago,” he told the newspaper. “If we had done this 20, 30 years ago, we would’ve had a lot less displacement.”
Academy West Investments placed a bet on student housing in Berkeley — and lost. Last month, the unit of Aliso Viejo-based Sunstone Development defaulted on a $28.3 million loan linked to University Park, a 97-unit student apartment complex at 1709 Shattuck Avenue.
Read more
