Demand has grown so strong for apartments in Sonoma County that Pine Creek Properties this year stopped putting rental ads on Craigslist.
“We are looking at being 99.9 percent full at any given time,” said Patty Goodwin, chief financial officer for the Santa Rosa property management company. “The units are renting pretty much the day we’re getting a 30-day notice” from a departing tenant.
Fueled by such demand, the county this spring recorded some of the fastest rent increases in the nation.
The average apartment rent rose to $1,521 a month in Sonoma County in the second quarter, a jump of 13.3 percent from a year earlier, according to Real Answers, a Novato-based rent research firm formerly called RealFacts.
While the dollar increases were slightly larger for rents in San Francisco and San Jose, the rate of Sonoma County’s increase was the greatest of 23 metropolitan areas in California that Real Answers studies — and higher than all the 29 other metro areas that the company reviewed around the United States.
Similarly, Dallas-based rent research firm Axiometrics reported in May that Sonoma County tied for fifth, with the Vallejo area, among U.S. communities with the fastest yearly rent increases. The only areas with faster rate increases were Odessa, Texas; Napa; and Honolulu.
When you ask why rents are rising so fast, experts repeatedly give two answers: job growth in the Bay Area and a lack of new housing in Sonoma County.
“The number one answer is the regional economy is the strongest in the nation,” said Scott Gerber, a senior vice president with Cassidy Turley in San Rafael. Gerber, who specializes in the sale of apartment complexes, said job growth in San Francisco and Silicon Valley is “creating a wave of rent pricing that is significant and pushing outward.”
As well, supply remains constrained. Few new houses and apartments have been completed in Sonoma County since the housing market began its crash nearly seven years ago.
From 2004 to 2007, the county added about 1,100 market-rate rental units, said Real Answers spokesman Nick Grotjahn. But since then, only 71 units have been built.
Two new apartment complexes are under construction in Santa Rosa and Rohnert Park, and both are slated to have their first units ready early next year. Even so, Grotjahn said, the increase is “probably not going to make a dent in the demand.”
Rents remained relatively stable in Sonoma County during the Great Recession.
But they began rising in 2011 and have soared for the last two years. Since the second quarter of 2012, the county’s average rent has jumped nearly 22 percent, according to Real Answers, which typically surveys complexes with at least 50 units.
In June, 97 percent of the county’s apartments were full. In terms of profitability, that’s actually a better occupancy rate than 100 percent, said Grotjahn. If an apartment complex over time had zero vacancies, he said, it would mean the landlord was “leaving money on table” by not raising rents even higher.
The low vacancy rate can be found in all sorts of apartment complexes around the county.
For example, the 230-unit Altamont senior complex in Rohnert Park is just as full as the rest of the 908 units that Pine Creek manages, Goodwin said.
So far, there has been no sign of a pause in rent increases.
By the end of June, the average rent had jumped a hefty 5.8 percent from $1,438 in the year’s first quarter, according to Real Answers.
Carmelita Howard, a housing manager with the Santa Rosa Economic Development and Housing Department, said rents seem to be increasing each month.
“If you look at Craigslist,” she said, “it’s like crazy.”
Howard recently spoke to worried residents at the former Lamplighter senior apartments near Coddingtown Mall.
The apartments were sold this year and converted to a complex for all ages called Parc Station. Some existing residents, who received Section 8 rent assistance from the city, voiced concerns about proposed rent and fee increases, she said.
Howard told them she understands their concerns. But the proposed rents remain comparable or lower than similar complexes, she said.
Moreover, the residents would have a hard time finding another apartment today.
“Just be careful,” she recalled saying. “If you give your 90-day notices, there’s nothing available right now.”
Such concerns reflect the angst felt by multitudes of county renters.
“They’re all getting worried that their rents are going up,” Howard said.
Santa Rosa Housing Authority Board Member Emilio Gonzalez knows firsthand such concerns.
A retired financial officer for a nonprofit group, Gonzales has watched the rent on his west Santa Rosa apartment rise in two years from $1,000 to $1,250. As a result, the 76-year-old said he now pays more than half of his monthly income to rent. As a former Navy veteran, he receives assistance for the remainder through a joint program of the U.S. Veterans Administration and the Department of Housing and Urban Development.
Gonzalez readily acknowledged that many local landlords charge more for two-bedroom apartments that are similar to his place.
Even the average one-bedroom in the county went for more this spring — $1,322 month, according to Real Answers. But such facts don’t lessen the dilemma that he and many other renters face to make ends meet.
If rents go up again in January, he said, “I’ll have to pay that, because there’s no place else to go.”
Looking ahead, two new apartment complexes are on track to open their doors to their first renters in early 2015.
The Annadel, a 270-unit complex formerly called Range Ranch apartments, is scheduled to have its first units ready near the end of January, said a spokesman for the developer, the Wolff Co. of Scottsdale, Ariz.. The complex is under construction south of Coddingtown Mall at Jennings and Range avenues.
And in Rohnert Park, the 244-unit Fiori Estates complex will set up a leasing trailer in the next few weeks in order to take applications, said Alexandros Economou, a regional vice president for Stockton-based A.G. Spanos, the project’s developer.
Apartments at the complex off Dowdell Avenue are slated to be ready around the first of the year, he said. The company has yet to set the rents.
“We expect a really good reception and a lot of interest in the project,” said Economou.
Even with the new units, most expect that county landlords will keep experiencing strong demand for rental housing for at least the next few years. Last week, Sonoma County supervisors voiced concerns about the need for more affordable housing, even as they struggled to find the money to help subsidize the construction of such units.
Howard of the city housing agency predicted that more people with limited means will be forced to share housing.
“Families will be renting a house together,” she said, “because they can’t afford it on their own.”
You can reach Staff Writer Robert Digitale at 521-5285 or email@example.com. On Twitter @rdigit