Apartment landlords across the Bay Area are responding to a loosening rental market by offering sweeteners to attract new tenants.
As thousands of new units hit the market, concessions from free rent to free parking have become more common, the San Jose Mercury News reported, citing figures from Zillow.
In October, two in five apartment listings in greater San Francisco and Oakland offered concessions, and half of listings in San Jose offered them, according to a Zillow study. The bonbons are handed out mostly in new apartments during their initial lease-up period, with offers of free parking or a few weeks of free rent.
“As a way to incentivize renters to come in, concessions are rising across the board,” Zillow economist Nicole Bachaud told the newspaper.
The new units have opened their doors following a mini building boom across the Bay Area fueled by low interest rates during the COVID pandemic, mostly in cities such as Oakland and San Jose.
Last year, 3,158 new apartments were completed in Oakland, and 1,314 in San Jose, according to the California Department of Housing and Community Development.
The Skylyne, a 402-unit, 24-story apartment building, opened in 2020 and reached 95 percent occupancy last year. But the Oakland complex is still offering concessions during the slower holiday season to compete with nearby apartments.
“Even during renewals, we’re offering two or three months free,” Isabella Easton, its assistant community manager, told the Mercury News. “It’s keeping residents, and it’s getting them through the door.”
The Julian, a 381-unit complex north of Downtown San Jose, offers six weeks free and six months of free parking.
A few months of free rent won’t solve the main issue for Bay Area renters — whose housing costs are among the highest in the nation. Despite the cost, San Francisco has dropped to the fourth-most-expensive rental market for one-bedroom apartments in the country; it previously ranked first.
As of September, median rents were about $3,000 in San Francisco and the South Bay, and $2,389 in the East Bay, according to CoStar.
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Although the influx of new apartments has boosted supply, the Bay Area remains under-built.
The state says the nine-county region needs to increase its housing supply by 15 percent to 441,000 homes by 2031 to meet its housing needs.
Apartment vacancy rates were 7 percent in the East Bay and San Francisco, and 5 percent in San Jose, according to CoStar.
— Dana Bartholomew