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.
Parker Berkeley is the newest apartment house in town. This place is huge! Parker Berkeley covers a whole block plus part of the block across the street. It is not on a spiffy section of Shattuck Avenue, and it is a long way from campus, but it is walking distance to the Ashby BART station. My guess is that the owners of this building are planning to rent to commuters who work in San Francisco. The rental office is now open and here are the rents:
One bedroom $3,400
Two bedroom $4,500
Three bedroom $6,300
Parking is extra, plus the rent is higher if you have a cat or a dog.
If these rents seem high to you, remember that rents for similar apartments in downtown San Francisco are much higher than this. Like all new apartment houses in Berkeley and San Francisco, Parker Berkeley has inclusionary apartments for the poor, but all the other apartments are rented at market rate. So here is my question. If all the new apartment houses in town only have apartments in them for the rich and the poor, then where will the middle class live? I have been asking that question for 30 years. Consider a schoolteacher who makes $70,000 a year. This teacher doesn’t make enough money to rent a market rate apartment at Parker Berkeley but makes far too much money to qualify for an inclusionary apartment. So where will this schoolteacher live? Certainly not at Parker Berkeley or any of the new apartment houses going up in Berkeley or San Francisco. America has long been a middle class society, but we are building no housing here for the middle class. None at all. Zero. Zip. What kind of society are we going to live in if we only build housing for the rich and the poor? I never, never hear local politicians talking about this issue, the complete lack of new housing for the working middle class. It never comes up. I wonder why.