Valley rents outpace pay
FORECLOSURE CRISIS, FEDERAL POLICIES ARE BLAMED
By Sue McAllister
Mercury News

Silicon Valley not only remains an expensive place to own a home, the area is still a pricey place to rent. A worker in Santa Clara County needs to make nearly $24.87 an hour to afford a basic two-bedroom rental in the area, an affordable housing advocacy group reported Monday.

That's slightly up from the 2006 figure, when a worker needed to earn $24.69. Rents have risen more steeply than wages, and the gap is being exacerbated by the foreclosure crisis and federal policies that encourage home ownership over renting, said Sheila Crowley, president of the National Low Income Housing Coalition.

Titled "Out of Reach" and produced since the 1990s, the study "tells us how out of balance U.S. housing policy has been," Crowley said Monday.

While home ownership has been promoted enthusiastically by the government, she said, there are not enough federally supported programs to create affordable rental housing.

As steep as rent can be in Santa Clara County, renters in San Francisco and San Mateo counties have it worse. They must earn just over $30 an hour to afford rent and utilities for a two-bedroom apartment in those areas, the group said.

While some Bay Area renters make that kind of money, many others find local rental rates hard to bear. The study said the "fair market rent" in 2008 for a two-bedroom apartment in Santa Clara County, for example, is $1,293. To afford that, a renter needs an annual income of $51,720,

according to the study, which assumes renters spend no more than 30 percent of their income on housing.

In fact, many workers must spend more, especially in the high-priced Bay Area. The report had sobering news for minimum-wage workers: In no U.S. county could someone working full time for the federal minimum wage of $5.15 afford to rent a one-bedroom home on one salary.

Affordable rentals have been a rarity in Silicon Valley for years. But in a trend that reflects the slightly weakened employment picture in the Bay Area, more units were vacant at large apartment complexes - those with at least 50 units - in Santa Clara and other counties in the fourth quarter of 2007 than in the previous quarter. And the rate of increase for rents slowed a bit, said Gerald P. Cox of RealFacts, a Marin County company that tracks rental data.

"You've seen this downward tip in occupancy," he said, which is typically followed by falling rental prices. At the same time, he said, there are more people entering the rental market who've been affected by foreclosure - either their own or their landlord's. Some of those vacant houses will become rental properties, but "that's not going to show" in RealFacts' data.

"We're in for a very, very interesting few months" as the rental market reacts to the changes, he said. RealFacts plans to release its first quarter 2008 data next week.

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