SF’s wealthiest renters are having trouble paying for housing, says Harvard research

San Francisco continues its trendsetting ways, as the rest of the country has begun emulating our rental market, with renters nationwide becoming, on average, older, wealthier, and more frequently burdened by the cost of housing.

You’re welcome, America.

Curbed calls it “perhaps the most significant change in the nation’s rental landscape,” a conclusion based on data sifted out of the census by Harvard University and distilled by the school’s Joint Center for Housing Studies into resources examining rental trends going as far back as 2006.

It really was a different world just a few years ago—or at least a different lifetime in purely economic terms. Consider the following.

• In the SF metro area, the number of renters making $75,000 or more increased by 127,515 between 2010 and 2018. Meanwhile, the number of renters in all other income brackets declined during the same period, with the biggest drop being those making $45K-$75K, down nearly 32,000 people.
• In a related trend, the number of SF area renters that are considered cost burdened—that is, paying more than 30 percent of their income toward rent—declined significantly overtime: In 2006 it was 48 percent, and the rate peaked in 2012 at 51, but since then has dropped every year, hitting 44 percent in 2018. While this sounds like good news, in practice it means that more people who were previously rent burdened ended up pushed out of the Bay Area altogether.
• Over the years, the middle class got hit the hardest: Between 2006 and 2018, the housing burden rate for those making between $45,000 and $75,000 leapt from 45.1 to 66.5. And for those making more than $75,000, it went from 9.9 to 13.3. In the meantime, the rate for those in the lowest income brackets was either flat or even declined a bit, although since they were all well over 75 percent to begin with this is middling news at best.

A couple of abstractions in the data should be mentioned: One, this is a measure not of San Francisco itself but the SF metro area, which includes all of San Mateo County and the East Bay and significant parts of the North Bay.

Second, those with sharp eyes surely picked out a problem with the data: $75,000 per year is not a lot of money in SF these days, but it’s the highest income bracket that the Harvard researchers bothered to break down.

In San Francisco (the city and county itself), the census estimates a median household income of over $112,000 in 2018. But as recently as 2010, that median was less than $72,000.

So the $75K marker would have been closer to a reasonable rubric back then—and then in the last ten years we just blew that away.

What do all of these numbers mean for the average person? For one thing, it means that the conclusions of those Harvard researchers are magnified in the context of the Bay Area.

And that could be worrisome; one other point Curbed notes about the national implications of the wealthy-renter trend is that it creates “a perfect storm for raising rental costs,” driven by factors like low vacancy rates, depressed housing construction, attrition in the number of low-income homes, and the very presence of so many wealthier renters themselves.

That’s an assessment of major cities across the U.S., but it could also be any given assessment of SF housing trends from the past decade or so. If there’s a perfect storm on the horizon, the Bay Area is the thunderhead.

And the situation will get worse. “With only limited federal support, state and local agencies are doing what they can to expand the affordable housing supply,” notes the Harvard study, but without a “comprehensive response from all levels of government,” there’s a cap on how much they can do.

Meanwhile, the problem sure isn’t going anywhere on its own.