NEW GRADUATE STUDENT HOUSING COMES TO MY NEIGHBORHOOD.

The apartment house at 2711 Shattuck Avenue is nearing completion and will be ready for occupancy soon. The entire building has been rented to the university, which will sublease individual units to individual graduate students. The apartments are all 310 square feet, which is very small. These apartments were built in China and arrived at the Port of Oakland in standard 8′ x 40′ shipping containers. The apartments came fully furnished and ready to move in. Each studio apartment will rent for $2180 a month and are all single occupancy (one student per apartment). This apartment house has no amenities aside from a coin-operated laundry room on each floor. There is no lobby, no yard, and no elevator. That means that if you live on the 4th floor of this building and have 4 or 5 bags of groceries, you have to shlep them up 4 flights of stairs as best you can. There is only one parking space (that’s not one parking space per unit. It’s one parking space for the whole building.) Pre-fab apartments from China are popping up in San Francisco and more are planned for Berkeley. Try to imagine what it would be like to live in an apartment that is only 8 feet wide.

What Is A Luxury Apartment in Berkeley?

I went to campus on Cal Day, April 22. Several of the new apartment houses in Berkeley near campus had booths there. There was one thing that these booths all had in common. They all claimed that they were renting luxury apartments, and only luxury apartments. The word ‘luxury’ was on everything. It was on the sales literature, the promotional giveaways, and the clothes that the sales agents were wearing. See the photo below of a shopping bag that I picked up on Cal Day. I asked a man working at one of these booths: “Your literature says that all your apartments are luxury apartments. What does that mean? I toured your building last week. I walked through a couple of 2 bedroom apartments. (One apartment was $4,500 a month. The other, which had a better view, was $4,800. a month including a parking space). They weren’t very big, and they didn’t seem to have anything luxurious about them, you know, like fine woodwork or marble floors, drapes, etc. In fact, neither of them even had a separate living room. What makes them luxury apartments?” The man working at this booth had an answer for me. I could see that he had been asked this question before. He said: “By luxury, we mean that our apartments are luxury priced.” AHA! So now I know what the word ‘luxury’ means, at least in Berkeley! ‘Luxury’ just means very EXPENSIVE! It tells you nothing about the apartment. Now frankly, I don’t think that ‘expensive’ is a reasonable definition of the word ‘luxury.’ Do you?

How Much Money Do You Have To Earn In Order To Rent An Apartment In A New Building In Berkeley?

As I said last month, Parker Berkeley on Shattuck Avenue is now open and renting apartments. It is 4 blocks from my house. This place is huge. It covers a whole block and half of the next block. 2 bedroom apartments at Parker Berkeley rent for $4,500 a month. Parking and utilities are extra. The rent is even higher if you have a cat. (You know, I have been a landlord for a long time, and it seems to me that if a landlord is getting $4,500 a month for a 2 bedroom apartment, he can afford to let a tenant have a cat for free.)

So – how much do you have to earn in order to rent one of these apartments? By my calculations, you would need to make at least $200,000 a year. You see, a person making $200,000 a year is only going to take home $100,000 after withholding. He is going to spend 33% of his income on federal income tax, plus 10% for California state income tax, plus 6% for Social Security. That leaves this guy with $100,000 a year or $8,300 a month in take-home pay. Landlords don’t like to rent apartments to people who are going to be spending over half their take-home pay in rent. So – what kind of people are going to live in this building or any of the other pricey new apartment houses going up in Berkeley? How many people in Berkeley make $200,000 a year? A lot more apartment houses like Parker Berkeley are going up. Many are already under construction. I think this a bubble, and I think it will end badly. The thing that I especially dislike like about these new apartment houses in Berkeley and San Francisco is that they only contain housing for the rich, the poor, and the elderly. Nothing, absolutely nothing, is being built for normal working people.

If You Think Berkeley Rents Are High, Wait Til You Hear What They Are Charging In San Francisco.

If you have driven over the Bay Bridge anytime in the past 3 years going to San Francisco, you probably noticed the Jasper building which is under construction on the right side of the off-ramp on top of Rincon Hill. The building is thin and 40 stories high. The Jasper will be finished soon. They has just announced their rent schedule:
  • Studios $4,250 a month
  • One Bedroom $5,300
  • Two Bedroom $7,000

jasperWhy would anybody pay $7,000 a month rent for a 2 bedroom apartment? I know several people who bought houses in San Francisco within the past couple of years, and all of them are spending a lot less than $7,000 a month for housing, and they all have mortgages. To be fair, the Jasper really is a luxury building. The apartments are large, and the building has a lot of amenities. Most of the apartments have balconies; however, I don’t know how much time I would spend on a balcony next to the Bay Bridge on-ramp at rush hour, especially on a hot, dry day. Breathing air like that can’t be healthy.

The minimum wage in San Francisco is now $12.25 an hour, which I think is too low. I ask you – how can anyone live in San Francisco who works at minimum wage? According to Zillow, the average apartment in San Francisco rents for $3,950 a month. That means that a worker would need to make $79 an hour, or $153,000 a year, to rent the average apartment in San Francisco without spending more than 30% of his pre-tax income on rent. I don’t know how much McDonalds pays their hamburger flippers in San Francisco, but I’m pretty sure that it is considerably less than $153,000 a year. There are a lot of people working for minimum wage in San Francisco, but where do they live? I really can’t figure that out. The people who work at McDonalds and Walgreens in the City must live someplace – but where?

Madame de Florian’s Apartment

deFlorianMadame de Florian was a wealthy French socialite in the 1930s. She lived in a large and lavish apartment in the fashionable Opera Garnier district of Paris. In 1942, Madame de Florian moved from Paris, which was under Nazi occupation, to the south of France, which was not under occupation, but she continued to pay the rent on her Paris apartment. Madame de Florian intended to return to her Paris apartment after the war was over, but she never did. She liked life on the French Riviera. Madame de Florian died in 2010. After her death, an auctioneer hired by her heirs entered her Paris apartment. It was the first time that anyone had entered the apartment since 1942. When the auctioneer unlocked the door to the apartment, he was astonished. He found a perfectly preserved time capsule of what life was like for the French aristocracy in the 1920s and 1930s. The apartment was full of treasures. It took weeks to catalog everything. Some items in Madame de Florian’s apartment have already been sold, including a framed portrait of Madame de Florian herself by Giovanni Boldini. The painting sold for over 2 million Euros. Many other valuables in the apartment are still awaiting sale.

How Come I Never Advertise My Vacancies?

I get asked this question quite frequently, usually by tenants of mine who have friends looking for housing and having a hard time finding anything. Well, the answer is simple. It has been a very long time since I had a vacancy. When one of my tenants moves out, a new tenant usually takes possession the next day.

Why? Well, it is not because of the chocolate room. I don’t tell prospective tenants about the chocolate room until we are ready to sign a lease. I don’t want people renting apartments from me just so they can get free chocolate. Of course there is a housing shortage in this area, but I like to think the main reason why I never have vacancies is because my units have more amenities than most rentals in this area.

Do You Have A Legal Right To Keep A Kangaroo In Your Apartment?

Maybe. I’m not sure. In 2011, I covered a story about a woman in Broken Arrow, Oklahoma who was fighting her landlord’s efforts to evict her – and her kangaroo. The woman had an Australian red kangaroo in her apartment. She said she had a legal right to have a kangaroo in her apartment under the ADA (Americans with Disabilities Act.) She has a letter from a therapist who says that due to her depression, she needs a ‘therapy kangaroo.

After fighting her landlord and the city of Broken Arrow for several years, the kangaroo’s owner has finally thrown in the towel. In August, 2013; she turned over the kangaroo to an exotic animal park, The Garold Wayne Interactive Zoological Park, located about 60 miles south of Oklahoma City. To see photos of the ‘therapy kangaroo’, go to: Therapy Kangaroo.

Kangaroos and Twizzlers. This ‘therapy’ kangaroo’s name is Irwin. According to his owner, Irwin’s favorite food is strawberry flavored Twizzlers, which I think is appropriate considering that he is a red kangaroo. I doubt that kangaroos in the wild eat Twizzlers, but if they do, that might explain why red kangaroos are red. I don’t know enough about Australia or kangaroos to be sure about this. Apparently, Irwin isn’t the only kangaroo who eats Twizzlers. There are several videos on You Tube of kangaroos eating Twizzlers. Here is one of them. Kangaroo Eating A Twizzler. I know an executive at Hershey, the company that makes Twizzlers. I will ask him about this when I see him next week.

Can you imagine what it would be like to live directly underneath an apartment with a kangaroo in it? Boing! Boing! Boing! I wonder if this woman’s landlord was able to rent that apartment. I have never personally received a rental application from someone with a ‘therapy kangaroo‘, but I did once get an application from somebody with a ‘comfort pig.’ I have often wondered if there is a therapy animal that a landlord can refuse to allow in his building on the grounds that the animal is inherently too dangerous. Is there a point at which the safety of the other tenants in the building and the neighbors trumps the ADA? I have asked this question to a number of lawyers who specialize in disability law, including government lawyers, and none of them had an answer. Frankly, I am not sure what I would do if I got an application for an apartment from somebody with an obviously dangerous animal, like a ‘comfort rattlesnake’ or a ‘therapy grizzly bear.’ What would you do in that situation if you were the landlord?

Shrinking Bay Area Apartments

Apartments are getting smaller and smaller in San Francisco and Berkeley. As a general rule, the newer the building, the smaller the rooms. 8′ x 8′ bedrooms are now common in new buildings, including expensive ones. And now, micro apartments measuring only 240 square feet are popping up all over San Francisco. Not to be outdone, the city of Berkeley has given permits to build 160 square foot apartments, and construction of them will begin soon. 160 square feet is the size of a one-car garage. These apartments are so small that every room has to serve multiple functions. For example, in the micro apartments scheduled to be built on Shattuck Avenue near Berkeley Bowl, the kitchen table will have a foot pedal underneath it. When you press down on the pedal, it will lower the table. Then you can cover the table with a mattress that is stored in the wall. Although micro apartments are small, they are not cheap. Most of the ones in San Francisco rent for over $2,000 a month. Would you pay $2,000 a month for an apartment that is so small that you have to sleep on the kitchen table?

LivingRoom1Rooms in existing buildings are shrinking too. Many landlords are moving walls within apartments in order to create more bedrooms. They take space from other rooms, usually living rooms. I have seen recently remodeled apartments in downtown Berkeley with living rooms that are only 5 to 6 feet wide. You can touch the 2 opposite walls by stretching out your arms.