Next to a dearth of housing, one of the most difficult things to grasp when it comes to Bay Area rental markets is the difference between average market rent and average real rents in any given city.
When rental platform sites like Zumper, Apartment List, Abodo, and Rent Cafe release their monthly rent reports, these figures represent only the average rents that landlords list on each site. Apartments on sites like these veer toward newer constructions and thus more expensive on average compared to the actual average apartment in a city.
On the other hand, when the U.S. Census estimates city rents via its American Community Survey, like it did with a new raft of data in September, this data includes rents paid on older homes and rent controlled units, which aren’t as likely to show up on the aforementioned rental sites.
In short, market rent is what a new renters looking for a place right now will likely have to pay; real rent is a measure of what everyone already living here is probably closer to paying—less, in almost every case.
SF-based rental platform Zumper released its new survey of average market rents for one-bedroom homes in SF and the Peninsula last week. To illustrates the mark-up new renters face, we compared Zumper numbers to one-bedroom home figures from the U.S. Census’s American Community Survey*.
It can cost twice as much to rent at market rates in SF compared to what people already living here pay. In October, Zumper provided an SF figure of $3,550 per month. But according to the census figures, the average SF renter paid $1,880 across every sort of SF home—a difference of 88 percent.
On Zumper, a modest Redwood City rental is $3,190 per month. Per the census, denizens already living here pay an average of $1,956—a mark-up of at least 63 percent.
One of the Bay Area’s most expensive rental markets by any metric, Zumper estimates Mountain View rentals average $3,520 per month. The census figure for similar rentals in Google’s hometown come to $2,509 per month—a difference of more than 40 percent.
It takes Stanford-grade money to rent in Palo Alto these days, averaging $3,220 per month. But according to census figures, most people pay $2,433 per month—a difference of more than 32 percent.
Though San Jose may outshine Santa Clara as the capital of Silicon Valley, Santa Clara remains the more exclusive redoubt with consistently higher rents. In Zumper listings, units average $2,860 per month. The census rent pinches pretty hard too at an estimated average of $2,305—a margin of 24 percent.
South San Francisco
Although South City maintains a reputation as a less prohibitively expensive place to live than SF, South SF’s median rent comes to $2,165 per month. The census marks it at $2,660 per month—a difference of 22 percent.
When the U.S. Census released median gross rent estimates for most of the Bay Area in September, Sunnyvale clocked in as the most expensive rental market in the region. No surprise, then, that the difference between Sunnyvale’s market and actual rent is one of the smallest in the Bay Area: On Zumper the city averages $2,860 per month while the American Community Survey figure came in at $2,580 per month—less than 11 percent difference.
But even narrower margins exists, like in Milpitas, which differences less than $200 from one rubric to the other. The average market rent listed on Zumper for Milpitas right now is $2,570 per month, only a little more than eight percent higher than the $2,377 that the census estimates.
*Note that census figures represent the averages from 2018.