The destruction of scores of houses and apartments in the North Bay fires virtually guarantees that Marin County’s affordable housing crisis is about to get even worse, economic analysts say.
By noon Friday, there were no vacancies at San Rafael’s Embassy Suites by Hilton, Four Points by Sheraton or Extended Stay America hotels. Hundreds more evacuees were sheltering at the Marin Veterans Memorial Auditorium.
Many evacuees will eventually return to their homes, but for others there will be no home in which to return.
“This is certainly going to put pressure on housing markets in the short term all over the place, not only in Sonoma and Napa counties but around the North Bay,” said Robert Eyler, head of the economics department at Sonoma State University and chief economist of the Marin Economic Forum.
Eyler said people with wealth who are displaced, such as former residents of Santa Rosa’s Fountaingrove neighborhood, may decide to relocate to Novato.
“I think you’ll see some upward pressure on demand for housing in Marin County,” Eyler said.
Eyler expects Marin renters to be the first to feel the heat from the increased competition for housing that will result from the fires.
Rent freeze
Sydney Bennet, a research associate with ApartmentList.com, a website that tracks the national rental market, said the fallout won’t be immediate.
“In the areas directly affected by fires, you will see a freeze on rent increases,” Bennet said. “That is what we saw in Houston, landlords saying we’re going to keep our rents at this rate because we know that people lost their homes.”
Bennet said normally property management companies use software that adjusts rental prices automatically as demand fluctuates.
But, she said, “In the longer run in the North Bay, you’ll definitely see increasing rents, once the market begins to determine those prices again. I think you’ll also see a drop in vacancy rates, especially in Santa Rosa and Napa.”
Bennet said in September the median price for a one-bedroom apartment in Santa Rosa was $1,470 while the median price for a two-bedroom unit was $1,910. Rents increased 2.6 percent year-to-year from September 2016.
By comparison, Bennet said, the median price for a one-bedroom apartment in San Rafael in September was $2,470 and $3,100 for a two-bedroom unit. In San Rafael rents increased 3.7 percent year-to-year from September 2016.
The homeowner vacancy rate in Marin County last year was 0.4 percent while the rental vacancy rate was 3.3 percent. In Santa Rosa, the homeowner vacancy rate last year was 1.8 percent and the rental vacancy rate was 2.3 percent.
“There are not a lot of housing vacancies anywhere in the Bay Area right now,” Eyler said.
More burdens
Pat Langley, one of the leaders of the Marin Organizing Committee, which has helped mount the county’s winter shelter program for the homeless and advocated for increased renter protections, said, “The people who will be hardest hit by these fires are renters and people already experiencing homelessness.
“Sonoma County’s already low vacancy rate will be made worse,” Langley said, “and much of Marin’s workforce, already forced to move out of Marin because of our high rents and housing prices, will be further burdened.”
Scott Gerber, director of Bradley Commercial Real Estate and a landlord himself, said he will do all he can to prevent Marin landlords from increasing their rents in response to the increased demand that is expected to result from the fires.
Gerber, who owns 26 rental units in Petaluma, said he has frozen his rental rates at where they were before the fires ignited and has sent out an advisory to his client base of some 250 landlords in Marin and Sonoma counties encouraging them to do the same. The California Apartment Association has issued a similar request to its members.
“The rental prices where they are today are satisfactory for most of us to operate our businesses at a slim profit or better,” Gerber said, “so there is no justification for us to raise those prices. We have a heart and soul, and we care about this community.”
Higher density
Gerber said he is also working with the California Apartment Association to identify available housing for residents left homeless by the devastating fires in Sonoma and Napa counties.
Gerber isn’t convinced that the fires will result in a net reduction in available affordable housing. He said the Estancia Apartments in Santa Rosa, 72 units of working class housing, was destroyed by the fire. But he believes more high-end properties have fallen victim — apartment complexes such as The Boulders and The Outlook, both of which were located in the Fountaingrove neighborhood.
Gerber foresees higher density housing complexes replacing those that have been lost.
“In the long run, I think we’ll see more units built,” he said.
Omar Medina, treasurer for the North Bay Organizing Project, said the efforts of conscientious landlords such as Gerber are commendable.
But Medina asks, “How long are the rent freezes going to be for, a few months? This is something that is more than likely going to take more than a few months to recover from.
“We anticipate that prices are going to continue to rise in a free market,” Medina said. “There are no protections.”
Homeless increase
North Bay Organizing Project campaigned for Measure C, an initiative on the June ballot to enact rent control in Santa Rosa. The measure was defeated by a 51.2 percent to 48.8 percent vote.
The Santa Rosa City Council passed a rent control ordinance in 2016 but put the law on hold after 10 percent of registered voters signed a referendum petition. Marin supervisors has so far rejected rent control as a means of increasing housing affordability.
Higher housing costs may not be the only legacy of the fires. If housing affordability continues to decline, the ranks of Marin’s homeless could swell.
“The long-term concerns for me are catastrophic,” said Jennie Lynn Holmes, director of shelter and housing for Catholic Charities of Santa Rosa. “There are only going to be so many units to go around for while.”
Christine Paquette, executive director of St. Vincent de Paul Society of Marin, said, “I don’t know what the impact is going to be. It’s frightening for sure.”
