Rents Rise Above in the Silicon Valley Below

It’s been common to see headlines in real estate news that tell of housing prices in California rising to the point of being out of the average buyer’s reach. Many families that are looking for a new home are priced out of their desired neighborhoods. A similar story is happening in Silicon Valley, where rising rents are pushing families to leave the neighborhoods where they have established their lives and have raised their children.

In Mountain View, 24 townhomes that line Forest Glen Street were sold to Prometheus Real Estate Group and residents feel in limbo about the new landlord’s intentions. They fear their leases won’t be renewed or that rents will continue to increase. Four families have already left and others say their own departures seem inevitable. Current tenant Emily White said, “It’s too much stress. People are leaving. People are emotionally detaching from each other.”

Sixty percent of Mountain View’s residents are renters. In Forest Glen, hiring by Google and other tech companies is ramping up competition for a severely limited inventory of rentals. Now, new two-bedroom luxury apartments can fetch between $5,000 and $6,000 a month, while comfortable but older two-bedroom units often cost $2,600-$2,900 and up. Councilman Lenny Siegel said higher rents are needed to recoup investments when older buildings are upgraded. He also noted that the source of the problem is that Google and others are hiring at a rapid rate and construction of new residential housing isn’t keeping up. Even as the city council is considering proposals to build several thousand additional units over the next few years, affordable housing in the area is vanishing because existing units are purchased and upgraded by developers, like Prometheus.

Ultimately, Mountain View must address the imbalance between job growth and housing inventory. Only then will housing prices settle down.

Are you familiar with the situation in Mountain View, CA? Are you seeing the same story of high rent prices pushing out long-time residents in other areas of California? We’d love to hear from you.

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