Urban Gentrification Is Rippling Out Into the Suburbs: A Dispatch From California

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While San Francisco gets most of the attention regarding the Bay Area’s housing crisis, in truth, soaring rent hikes have also spread to nearby cities like Concord and beyond. The rising rents in Concord exemplify a larger nationwide phenomenon: as big cities like San Francisco get pricier, gentrification can also expand to surrounding suburbs and outer exurbs.

During a farmers’ market in Concord this September, a group of tenants and activists from the tenants’ rights organization Tenants Together gathered at Todos Santos Plaza. Using a megaphone on the plaza’s stage facing the rest of the park, the group called for rent control and a moratorium on rent increases in Concord.

After the speech, organizers and tenants passed flyers to people around the park. With a tiny handful of exceptions, most people were sympathetic. Numerous people complained about high rents in Concord and said they felt alone in enduring the pinch of rising housing prices. Many were former Concord residents who had moved to the neighboring city of Pittsburg, California, for cheaper rents.

Similar actions occurred throughout California that day, as part of a National Renters Day of Action.

Concord Residents Fight for Rent Control

Rent in the Bay Area is generally between $1,600 to above $3,000 per month. As of November 2016 average rent for one- and two-bedroom apartments in Concord was $2,281 per month, according to the online rental housing search engine Rent Jungle. (The median rent is similar.) Oakland and San Jose have similar rents, while San Francisco’s median rent for a one-bedroom apartment is $3,380 per month.

Thanks to expensive housing, nearly 30 percent of Bay Area residents — almost 1.45 million people —are not self-sufficient, meaning that they do not have a stable place to live or enough money to survive, according to a JobTrain study.

Over the last few months, residents and tenants’ advocacy groups have attended Concord city council meetings demanding rent control and a moratorium on rising rents. At the meetings, numerous residents have complained about how expensive Concord’s housing is. Some rent control opponents — many of whom work in some form of property management — argued that rent control would interfere with the market’s ability to supply housing. Rent control proponents, meanwhile, argued that the housing prices are so ridiculously high that rent control and a moratorium are necessary.

Rent control exists in Berkeley, Oakland, San Francisco, Los Angeles and a few other cities in California, but not in Concord. Under California state law, rent control applies to units built before February 1995.

One resident who’s been feeling the weight of Concord’s expensive housing market is Betty Gabaldon. Originally from Los Angeles, Gabaldon has lived in Concord for 16 years. For much of that time, she lived with roommates. But once she gave birth to her daughter, she moved somewhere else to accommodate her family. Gabaldon has lived in her two-bedroom apartment in Concord’s Monument Corridor neighborhood for since around 2010. When she first moved to her apartment, she paid $1,100 per month. But last year, the apartment’s landlord began raising the rents by $50 per month while refusing to make necessary repairs to heating and plumbing, and failing to address bed bug and rodent infestations. By December 2015 Gabaldon was paying $1,300 per month and by February of this year, her rent increased by $375 — 30 percent — to $1,675. Other tenants in her apartment complex were slapped with the same exorbitant rent increase.

As a result, Gabaldon contacted Tenants Together and the tenants organized a rent strike last April that was successful in ousting their landlord. But even though the property is no longer managed by the same person, Gabaldon said the same issues still persist. “We have bed bugs. We have rats,” she said. If rents keep going up, Gabaldon said, she is thinking of moving further north, to a town near Sacramento, because “it’s cheaper.”

Gabaldon has been a single mother since her daughter’s father passed away last year. Right now, she works at a local convenience store, and the difficulty of raising a family on a single income is intensifying as rents continue to rise.

“What if something happens to me? I’m not going to be able to pay my rent,” Gabaldon said. “What’s going to happen to my daughter? Those are things that I worry about.”

Despite community pressure, Concord City Council has not listened to its residents. A single mother whose rent increased by 40 percent this year — and now spends two-thirds of her income on housing — told the Council, “We’ve been asking for quite some time for a temporary housing moratorium but we have seen very little progress. I feel ignored by this Council.”

As a slap in the face, the city council recently refused to pass a temporary moratorium to cap rent increases, even though most community members at the meeting favored it.

Displacing Residents, “Flipping” Homes

A 2015 UC Berkeley study shows that parts of Concord are either at risk, in the early stages of, or already experiencing displacement and gentrification. According to the study’s methodology, areas at risk of gentrifying and displacing lower-income residents are typically characterized by a strong housing market and the loss of market-rate affordable homes. Those undergoing gentrification and displacement are already losing low-income households and affordable units, along with witnessing a decline of low-income residents and change in demographics. This is similar to Richmond, California (northwest of Concord), which is also experiencing the early stages of gentrification.

Another UC Berkeley study looked at numerous case studies of gentrification and displacement throughout the San Francisco Bay Area. One of those cases was Concord’s Monument Corridor, where Gabaldon lives. Monument is predominantly (57 percent) Latino — many of its residents, immigrants from Mexico and Central America — and low-income/working-class. The study accumulated census data and found that in 2013, median household income in Monument was $37,397, which is less than half of the median household income for Concord as a whole (typically around $60,000 to slightly over $70,000). That’s a 22 percent decrease from 2000, when Monument’s median household income was $48,080.

The dynamics in Monument Corridor are a noteworthy departure from typical narratives of gentrification and displacement. The typical framing sets up gentrification as preceding displacement: Lack of investment in a neighborhood leads to low property values; then the neighborhood becomes attractive for its location or proximity to public transportation (Monument is near the Concord BART station); property owners see an opportunity to buy cheap property in the neighborhood and sell at a higher price; rich people and investors start buying property in the area and, as a result, the lower-income people and (usually) people of color who used to live there are displaced from their community. However, some neighborhoods, such as Monument, witness the process in reverse.

The UC Berkeley study points out that vacancies in Monument jumped from 3 percent in 2000 to 9 percent in 2013, even though the entire city of Concord’s vacancy rate was lower in 2013 at 6.5 percent. Monument’s high vacancy rate is “likely due to the housing crisis and recession of 2008.” A high vacancy rate “can signify disinvestment in the Monument, which can ultimately lead to gentrification. Landlords may prefer to leave units empty instead of dealing with maintenance or until the market rebounds. In turn, developers can purchase land/buildings cheaply and still make an acceptable profit after the cost of rehabilitation.” Many parts of Contra Costa County, such as Richmond, Pittsburg and Antioch, were hit hard by the 2008 recession and housing crisis. Concord is no different, and Monument was particularly harmed. Foreclosure data listed in the study showed that Monument had a foreclosure rate of 23 percent from 2006 to 2009, which is nearly four times the city of Concord’s rate at 6 percent.

During the foreclosure crisis, homebuyers and investors purchased property — especially foreclosed property — at low prices, but now those values are increasing. “Concord’s home values experienced an 8.6 percent increase in home value from 2013” to 2014, according to the study. Now, apartments in Monument go for well above $1,500 per month, even for a one-bedroom. Average rent for an apartment in Concord is already over $2,000, while the average monthly rent is $1,972 for a one-bedroom and $2,378 for a two-bedroom.

After the recession, housing prices increased but household income did not keep up. According to a 2015 Harvard University Joint Center for Housing Studies report, “Between 2001 and 2014, real rents rose 7 percent while household income fell by 9 percent.” Those trends increased “the number of cost-burdened renters (paying more than 30 percent of income for housing) up from 14.8 million to a new high of 21.3 million.” Severely burdened households (those spending more than half their income on housing) increased 7.5 million to a new record of 11.4 million. Monument is no exception, as 60 percent of households in the Monument are rent-burdened and 43 percent are mortgage-burdened.

Since the recession, many of the housing units that have been built are geared toward wealthier individuals. Median asking rent for new market-rate apartments (or “multifamily units”) is over $1,300 a month. According to the Harvard study, “the median asking rent for new market-rate apartments hit $1,372 last year [2014], a 26 percent increase from 2012 and well above what the typical renter could afford under the 30-percent-of-income standard.” Only “10 percent of newly constructed units had asking rents under $850, a level that about half of all renters could afford.”

One example of this in Concord is the Renaissance Square apartment complex located in downtown Concord, about one block away from Todos Santos Plaza and walking distance from the Concord BART station. The complex has one- and two-bedroom apartments that are going for between $2,138 and $4,865 per month, according to Rent Cafe. The second phase of Renaissance Square apartments is already underway and is expected to be completed by summer of 2018. While the neighboring city of Walnut Creek has typically been the go-to for building upscale residences and fancy amenities for the well-to-do, developers are looking to do the same in Concord. John Montagh, economic development and housing manager for Concord, told the East Bay Times, “We have a downtown BART station and we really have a jewel of a downtown that’s vibrant and provides the elements of transit-oriented development that developers and millennials that want to have that experience can have.”

One landlord in the UC Berkeley study who owns an apartment complex near Monument spoke bluntly about planning to increase rents on an ongoing basis and using their complex’s proximity to BART “as a marketing tool, aiming to ‘cater to the laptop crowd’ that commutes via BART to work in San Francisco.” They also bragged about “how they ‘got rid of … the 99 percent Latino’ population that formerly lived in the complex.” The landlord ultimately wants to convert the units into condominiums.

Concord is listed among the top 10 cities to “flip” homes for hipsters, according to RealtyTrac. Home flipping is when a buyer purchases a property not to occupy it but to resell the property at a higher price than what they paid for it. RealtyTrac lists four steps for flipping an area: 1) “Identify hot hipster housing markets with good returns on flip” (Oakland and Concord are among top 10); 2) “Find foreclosure homes or other bargain buys;” 3) “Rehab to hipster tastes;” 4) “List + market the home. Close the deal.” So far, gross profit for US single-family home flipping raked in over $58,000 in 2013, up from $45,000 in 2012.

Where Displaced People Move

The expense of housing in San Francisco and Oakland is forcing people to relocate to other parts of the Bay Area and Northern California. According to Census data released in 2014, between 2007 and 2011, over 5,000 middle-class individuals — those earning between $35,000 and $74,999 a year — moved out of San Francisco to other parts of California, many to other Bay Area counties, such as Alameda. This was 40 percent more than those in the same income bracket moving into San Francisco. Alameda County includes the cities of Oakland and Berkeley and is the next county east of the city and county of San Francisco. While Alameda received 3,156 residents from San Francisco, it “lost 5,589 to neighboring Contra Costa,” according to SFGate.

As low- and middle-income residents — including many Black and Latino residents — leave San Francisco, they are being replaced by higher-income, predominantly white, residents. In 2013, the number of households making above $100,000 annually grew by 6 percent, while those making less than $100,000 decreased by 5 percent.

Some people are buying homes even further from San Francisco and Oakland and commuting to their jobs in those cities. Some are buying homes in Brentwood, California, which is in east Contra Costa County and 55 miles northeast of San Francisco. Others are moving as far as Tracy in San Joaquin County, which is over 60 miles east of San Francisco. In fact, the number of people commuting from the San Joaquin Valley to the Bay Area more than doubled between 1990 and 2013, from around 32,000 to nearly 65,000, according to a Bay Area Council report.

Where to Go From Here

The typical solution presented to tackle the Bay Area’s housing crisis is to simply build more housing. Specifically, more market-rate housing. A February 2016 report by the California Legislative Analyst’s Office (LAO) argued for this, asserting that building more private, market-rate housing in urban communities would help make housing more affordable for low-income residents. Essentially, when more market-rate housing is built, it said, housing prices eventually come down, which “make[s] it easier for low-income households to afford their existing homes” and mitigates displacement.

However, the LAO report’s evidence does not provide much hope. It cites data from San Francisco and Los Angeles to show that new housing becomes cheaper as it ages. Relatively expensive housing (top fifth of rental units) in those cities that was built between 1980 and 1985 became “considerably more affordable by 2011,” dropping to “rents near the median of all rental units.” It took 25 years for luxury housing to become modestly priced. Considering how high housing prices are in Bay Area cities, that rate of decrease is not very encouraging for people struggling to hang on to their apartments in San Francisco or Oakland. In 25 years, a city’s character and demographics can change; for instance, it can go from working-class to super rich. So while it is true that building market-rate housing does decrease housing prices, it takes a while for that to occur. In the meantime, there’s no telling what other changes will happen to the area in question.

The LAO report drew some criticism, among the sharpest of which was a May 2016 UC Berkeley study pointing out that the report omitted subsidized housing production data.

After reanalyzing the same data, with subsidized housing data included, the UC Berkeley study found that subsidized housing is actually better at mitigating displacement than market-rate housing. According to the study, “At the regional level, both market-rate and subsidized housing reduce displacement pressures, but subsidized housing has over double the impact of market-rate units.” It also mentioned that “Market-rate production is associated with higher housing cost burden for low-income households, but lower median rents in subsequent decades.”

Dr. Miriam Zuk, one of the researchers who worked on the UC Berkeley study, told Truthout that given the nature of cities, both market-rate and subsidized housing need to be built. “It’s not a question of either-or,” she said. However, when it comes to providing enough housing for lower-income residents, Zuk said that “building market-rate isn’t enough. That’s not going to provide affordable, sustainable housing units for low-income households and people in poverty in the long-run [and] in the short-run, especially.” The reason market-rate housing does not adequately serve the needs of lower-income residents lies in the nature of supplying housing in the private market system. Put simply, it is not profitable for developers to build housing for lower-income residents. They make more money building housing for rich people.

“Market-rate housing is developed by for-profit entities and they’re trying to make profit,” Zuk said. “It’d be very hard to make a profit off of people in poverty — people that have unstable income, that might have a hard time making rent each month.”

Zuk also questioned whether profit should, in fact, be the motive behind providing housing for low-income people. “Should you be making profit off of people that have very inherent instability in their day-to-day lives?” she asked.

This is why there are calls for rent control not only in Concord but in other cities throughout the Bay Area. Recently, voters passed rent control measures in both Richmond and Mountain View, which is located 10 miles southwest of Facebook headquarters in Menlo Park. There is an ongoing fight to build more housing in Mountain View, and voters recently elected three pro-housing candidates to the city council.

Because of how severe the housing crisis is, residents and advocates throughout the Bay Area are upping the ante by pushing for progressive policies like rent control and affordable housing. If something is not done quickly, the struggle could heat up even more.