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Rent rooms, not apartments in San Francisco, big city housing markets

Rent rooms, not apartments in San Francisco, big city housing markets


Rent rooms, not apartments in San Francisco, big city housing markets


People starting out their careers in expensive cities are used to sharing apartments. Now, they’re sharing rooms.

Carina Zhao lives in a four-bedroom apartment in San Francisco’s Mission District – with five other people.

Zhao, 23 and an analyst at Castlight Health, shares a room with her former college roommate. Another pair of roommates share sleeping quarters. Meanwhile, two others each have their own bedrooms.

“We don’t have a lot of space, so we basically all keep all of our clothes and stuff in tiny drawers,” Zhao said. “None of us in the doubles really want to pay for the singles.”

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Joshua Clark, an economist at Zillow-owned rental search platform HotPads, said the trend of doubling up in rooms started around the time of the Great Recession and has continued to grow.

“The share of renters living in one bedrooms and studios has gone down and now more people are living in two and three bedrooms,” Clark said. “There are a lot of renters out there who have more people in the household than there are bedrooms listed in the house.”

This trend is concentrated in coastal cities with strong job markets, he said.

In 2008, around 935,000 people in the San Francisco metropolitan area were living in homes where there were more people than bedrooms, according to Zillow. In 2017, that number was up, rising to more than 1.2 million people.

In the Seattle area in 2008, around 530,000 people were in the same situation, and in 2017 the number jumped to almost 717,000.

Pricey cities that remain popular with young people include San Francisco and New York, which had median rents of $3,700 and $2,980, respectively, for one-bedrooms in May, according to rental site Zumper.

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The average starting salary for graduates from the class of 2018 is about $50,004, according to the National Association of Colleges and Employers.

That makes sharing a room look like a much-needed option in expensive cities.

Sharing a one-bedroom apartment in New York could save you $14,370 a year, said Grant Long, senior economist at real estate listings and data platform StreetEasy.

Zhao and her roommate each pay $1,175 a month for their shared room, while those in the single pay $1,600 for their private rooms.

She said her original budget was between $1,200 and $1,500 per month, as she makes about $80,000 a year.

Some renters are open to giving up the privacy of their own room for neighborhood amenities and a shorter commute.

“You want to live in a certain place, you want a certain lifestyle and you need to find a way to save for that,” Clark said.

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Most lease agreements require you to list everybody living in the unit on the lease, and that it’s possible the landlord will charge more per person, he said.

If you’re not looking to double up, here are some other tips to saving money on apartment rentals.

Search early and often

Monitor rental sites over time in order to get an idea of what’s a fair price for a unit.

This way, you’ll also know how long an apartment has been listed, giving you more room to push back on the original listing price because of lower demand.

“A lot of rents do come down over time and it’s a normal occurrence to negotiate a cheaper rent,” said Long at StreetEasy.

Keep an eye on the rental market even after you’ve settled down, said Clark.

You don’t want to miss out on cheaper options, or the ability to negotiate for lower rent.

Consider living outside the city center

People are increasingly choosing to live closer to city centers, but those apartments are expensive compared to those farther out, Long said.

Rents on some units are declining in New York, including in Manhattan. This is even more pronounced in the city’s outer boroughs of Brooklyn, Queens, the Bronx and Staten Island.

In an analysis of roughly 4,200 units in the city, StreetEasy found that about 44% of the units appeared at a lower price in the first quarter of 2019 than they did in the same time period in 2018 or 2017.

In Brooklyn’s Bushwick neighborhood, 77% of the apartment listings had a lower price than in previous years.

Don’t be afraid to negotiate

“People get the rate hike and they think ‘this is in writing, this is what it’s going to be,’ but you can negotiate,” Clark said.

When the lease was nearly up on his apartment in Seattle, Clark’s landlord tacked on a 5% rent increase if he chose to renew.

Instead, Clark researched rents in his area and found there was no year-over-year increase in his neighborhood. Meanwhile, rents in Seattle went up an average of 2% year over year.

After presenting the data to his landlord, Clark wound up with a 2% rent hike instead of the original 5%.

©CNBC is a USA TODAY content partner offering financial news and commentary. Its content is produced independently of USA TODAY.


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