General Articles
Seeking Shelter in the Rental Market


Kimberly Romero woke up at a friend’s house in Windsor at 5:30 the morning of October 9, 2017, to prepare for her job as a computer teacher at Herbert Slater Middle School in Santa Rosa, unaware that a few miles to the south her home on View Court, around the corner from Coffey Park, was already burned to the ground.

She checked her phone and found several messages. Among them, calls from the school’s vice-principal and a few colleagues, informing her that school was canceled.

“I called the vice-principal to ask why,” Romero says. “He said it was because of the fires, and I said, ‘What fires?’ ”

It was then she learned about the firestorm devastating the place she called home for the past decade in northwest Santa Rosa. A neighbor later told her that her house was the first to go.

Her 22-year-old son, Kevin, who was staying at the house alone with the family’s two cats, ran on foot from the inferno engulfing the quiet working-class neighborhood north of Hopper Avenue. He managed to escape with the clothes on his back, but everything they owned, as well as items they were storing for other people, was gone. Her eldest son, 26-year-old Michael, who is attending college in San Diego, was spared the harrowing experience.

Romero eventually tracked down one of her cats, Scooter, which escaped the flames by hiding in the wheel well of a car that didn’t burn. Scooter suffered severe burns, but survived due to the efforts of neighbors and free veterinary services.

Life-changing event

In the ensuing weeks, Romero’s life, like thousands of other people in Sonoma County, was turned upside down.

She remained with her friend in Windsor, while her son stayed with friends in Santa Rosa. In the days after the initial tragedy, and as the fires continued to rage throughout the area, she suffered through power outages and uncertainty.

“We were evacuated from Windsor and the closest place to go was Novato to get shelter,” Romero says. “That’s how far you had to drive to get a motel.”

Waiting in line for mail in Roseland was just one of the many inconveniences Romero and others endured in the wake of the fires. All the while she also dealt with grief, loss and the cost of purchasing household items needed for daily life that she normally wouldn’t have thought about.

For two months, Romero stayed with her friend as she tried to make sense of her new life, but by December, found she needed to have her own space.

It was then she waded into the local rental market, weeks behind an initial rush to find temporary, possibly long-term, housing as she worked through the myriad complexities of rebuilding her four-bedroom home.

Tight markets get tighter

The rental market in the North Bay has had fluctuations in price and availability over the years, but as with most living expenses in the Bay Area, the trend is generally upward. That is due in large part to tight markets with high occupancy rates and the desirability of the region. By the time the fires hit, the vacancy rate had tightened further, leading to a crisis-level market, as a substantial amount of residential housing in Sonoma County went up in smoke.

“If it was possible, we would have a negative vacancy factor,” says Keith Becker, general manager of DeDe’s Rentals & Property Management in Santa Rosa. “We had a vacancy factor that was slightly less than 2 percent before the fire. And then the fire came and we lost 5 percent of the Santa Rosa housing stock. Not all of that had previously been rentals, but still, we suddenly had 5 percent of our community that was displaced.”

Becker says that due to a lack of inventory in Santa Rosa, those displaced from their homes began dispersing to communities further afield, such as Cloverdale and Lake and Marin counties, which could lead to a ripple effect as the rebuilding process moves forward and vacancy rates tighten further with an expected influx of workers to take on the task.

“It’s like the snake eating its own tail: we didn’t have enough housing to start with and we don’t have enough tradespeople in this county to serve the present needs,” Becker says. “To return and build that housing stock back to its original condition, we need to bring tradespeople into the community. Where are they going to live? It really is the snake eating its tail.”

The cost of renting

The median rental price in Napa County was $2,900 per month in September 2017, but that jumped to $3,200 by December, according to Zillow.com, a national online real estate marketplace and information clearinghouse.

The Marin County market has been least affected by the fires, although rentals are not cheap, with a large drop in median price between June and December 2017. June saw a peak of $4,950 per month, but by December that had dropped to $3,950.

In Sonoma County, median rent was $2,550 in September but spiked at $2,800 by December, although there were factors that skewed the numbers, making it difficult for clear analysis of the situation.

First, in the wake of the fires, Governor Jerry Brown enacted Penal Code 396, which caps price increases on life’s necessities, i.e. food basics, utilities and rent, at 10 percent. The initial period of PC 396 expired December 18, 2017, but was extended through April 18, 2018.

Additionally, many rental homes not previously available began to show up on the market. Many of those homes were luxury rentals that cost hundreds of dollars per night. With insurance companies footing the bill, some properties rented for as much as $12,000 per month.

“Napa and Sonoma both saw rent prices increase rapidly in the week’s following the wildfires,” Zillow Senior Economist Aaron Terrazas says. “However, a lot of the rental listings in these areas were new—we hadn’t seen them before on Zillow. This suggests that units that otherwise would have been vacant, or used as vacation properties, were being listed by owners who were trying to provide assistance for those who lost their homes.”

But Terrazas echoed Becker’s fear of a worsening housing crisis in the years to come, particularly if rebuilding efforts drag on interminably.

“If the housing stock doesn’t recover, both renters and buyers in the area are likely to face tough competition, and sellers and landlords will have the upper hand when it comes to negotiating,” he says. “Prices were already high, due to the desirability of living in Wine Country, and they’ll likely stay expensive as the market adapts to the lower inventory.”

Economic realities

For fire victims such as Kimberly Romero, a working-class woman living on a teacher’s salary, the cost of getting into a rental property—on the heels of an often long and fruitless search—can represent a daunting challenge.

When she started looking for a rental less than two months after the fires, the market had already tightened after a rush of desperate residents sought housing in October and November. Romero hoped to find a small house or apartment in a safe community, as she was striking out to live alone for the first time in her life and wanted other people around to ease her concerns.

Though her insurance company was going to subsidize her move, she found the up-front costs beyond her means. She began by calling local apartment complexes owned by corporate entities and then considered going through a rental agency. In addition to the cost of rent, most property owners, whether large corporations or local property owners, require up to one-and-one-half times monthly rent as deposit as well as earning requirements of up to three times monthly rent.

“I called them up and thought for sure they would change their methodology, but they wanted me to earn two-and-a-half times the rent,” she says. “If I had that kind of money, why would I rent? Why wouldn’t I buy?”

While it might seem unfair that victims of a natural disaster should be forced to come up with that kind of money, Becker says state and federal regulations leave little room for negotiation and property owners have to maintain non-discriminatory practices.

“Most corporate and management enterprises are—and have to be—firm in their practices. If not, there’s a great deal of exposure,” he says. “A fair housing claim against someone with 1,000 units would be newsworthy, and therefore worth the attention of our various oversight agencies.”

Eventually, Romero began searching Craigslist and asking around through word-of-mouth. Available housing she found in her price range ran the gamut from property abutting the freeway, which would have jangled her already frazzled nerves, to isolated units with bars on the windows. And though she hoped to find a furnished place so as not to gather unnecessary possessions she might have to purge once her house is rebuilt, she finally settled on a small, unfurnished granny unit near downtown Healdsburg.

“Although I’m further away from Santa Rosa than I’d like, it’s beautiful here and I’m three blocks from the plaza,” Romero says. “It’s calm here. The only bad thing is they don’t allow pets.”

Life has changed dramatically for Romero, a 25-year Sonoma County resident who moved here to raise her family in a rural environment that reminds her of the bucolic 1960s San Jose of her youth. Since she lost everything in the fires, she’s slowly begun to acquire the basics, including the first television she has owned in 20 years.

“I don’t live with my son anymore, and I don’t have a pet, so I’m alone,” she says, adding that she doesn’t want to be one of the first homeowners to rebuild. She prefers to wait until there are other houses in the neighborhood, so she doesn’t have to look out over empty lots and leftover destruction.

“I feel sorry for the people still there,” Romero concludes. “If I had to live next to all that destruction and breathing in the air…I don’t know who’s worse off. It’s not good.”

Governments wrestle with the problem

A housing market already as complex as a three-dimensional game of chess became exponentially more difficult in the wake of the October wildfires, as state and local governments seek solutions for problems that seem beyond human capacity to solve.

Decades of regulation aimed at maintaining the rural charm and agricultural integrity of Marin, Sonoma and Napa counties, along with terrain not easily developed, have helped exacerbate a problem that, at its heart, requires building thousands of additional habitations.

Rent control measures, such as the temporary cap put in place with the enactment of Penal Code 396, can be popular with renters and voters, but are often seen as inconsequential to the desired outcome of sufficient housing for demand.

“If you’ve been restricting the flow of building permits and you’ve been restricting construction for 20 years—certainly in Santa Rosa permits were low for a number of years after the recession—then you’ve got a helluva backlog,” says Andre Shashaty, a San Rafael author and financial advisor. “And then you say we’re going to regulate rents? Okay, great. But you still have too many people wanting housing and your rent control won’t address that.”

In 2016, the City of Santa Rosa adopted a rent control ordinance. Voters repealed it with Measure C, a rent control ordinance that capped residential rental increases at 3 percent annually, but it was defeated at the ballot box in June 2017.

Later that year, the city released its “Housing Action Plan,” a planning document intended to implement the City’s General Plan Housing Element. The plan in part seeks to facilitate the construction of 5,000 additional housing units, half of which will be affordable, by 2023. But even that’s not enough.

“We had a huge rental problem before October 8, it’s much bigger now,” Santa Rosa Mayor Chris Coursey says. “Almost 3,000 residences were lost in the fires and about half of those folks were renters. All of them, potentially, are renters after the fires. If you just do the raw math, that’s 1,500 additional renters after the fires.”

In December 2017, the city entered into a negotiating agreement with Cornerstone Properties to create a mixed-use, mixed-income project that uses both Cornerstone’s property and the city parking lot.

The vision is high-density housing near transit and amenities to ease the housing crunch and encourage people to get out of their cars. Coursey didn’t rule out the possibility of building vertically.

“We definitely have plans and efforts are underway to encourage building in the downtown: higher density, higher heights, using city property to incentivize development,” Coursey says. “We’re starting to see some movement there.”

The city has also instituted anti-price-gouging measures that include provisions to keep landlords from evicting tenants in good standing so they can raise prices once PC 396 expires, as well as Resilient City Development Measures to help streamline the permitting process and facilitate temporary housing in various forms. Those measures can be found at srcity.org.

Too much of a good thing?

Ultimately, the housing woes of the North Bay come down to the desirability of the region, a strong job market, beautiful open spaces and world-class wine, food and entertainment. The problem is both physical and political. Physically, there isn’t enough housing to go around; politically, it will take a concerted act of will and visionary policies to get through the crisis.

“The solution for escalating rents is that you create enough supply that it comes into equilibrium, and that may very well mean that downtown Santa Rosa looks like a downtown,” Becker says. “It could very well mean that we build upward.”

Shashaty believes the problems are at least partially class-related and California’s politicians have gone to great lengths to maintain a line of demarcation by offering political rather than practical solutions.

“We will widen the freeways every two years—including the narrows leading into Petaluma—and we will spend billions of dollars on freeways and bridges and we’ll tolerate heavy traffic. We’ll create the jobs and we’ll make sure you have your gardener and your home health-care worker and your bus boy,” he says. “But we’re not going to build the housing, so they can live here and get off the roads and stop polluting and jamming up the freeways, and stop running up the highway bills.”

what is a balanced rental market?

A study by the U.S. Department of Housing and Urban Development (HUD) released last year before the fires, reports that as of April 2017, the vacancy rate for rentals in Santa Rosa was 3.2 percent, down from 5.2 percent in 2010. A “balanced” rental market requires a vacancy rate of 5 percent. Of the 1,700 new rental units HUD estimates needed to fill the void, only 200 were under construction at the time of the study.

rebuilding efforts in coffey park

Coffey Strong is not just an uplifting banner for survivors of the fires that destroyed the northwest section of Santa Rosa, but a grassroots effort by residents dedicated to rebuilding their homes.

Many of the burned-out neighborhoods were planned cookie-cutter designs built on agricultural land subdivided and built in the mid-to-late 1970s. Costs of scale on such projects make for affordable developments. Coffey Strong is an attempt to recreate affordability through information gathering and cost-saving labor sharing.

It began with a loose collection of online connections, such as nextdoor.com and Facebook groups, where displaced residents went to share grief over their losses and speculate on what would come next.

“There was, obviously, the initial shock, but after the first week it started to die down,” says Jeff Okrepkie, president and one of the initial organizers of Coffey Strong. “[The experience] was like the stages of grief, where they started to move on to the next one.”

Okrepkie saw information posted that was “not necessarily accurate,” he says. He waded into the conversation with knowledge gained through his time working for the George Petersen Insurance Agency, dealing with developers, contractors and insurance companies.

As Okrepkie’s group began gaining steam, Sonoma County’s Fourth District Supervisor James Gore was working with similar groups in the Larkfield/Wikiup/Mark West area, creating a blueprint for the herculean rebuilding efforts to come.

Gore began by dividing each community into four or five separate areas, identifying “block leaders” who would show up for weekly meetings and facilitate the dissemination of information. He further helped organize homeowners into subgroups according to insurers, mortgage companies and others so they could reduce instances of repetitive efforts.

“It was Community Organizing 101,” Gore says. Gore invited Okrepkie to attend the town hall meeting for the area on the east side of the 101 to see if they wanted to do something similar in Coffey Park. They connected and created a similar map for Coffey Park neighborhoods.

A November meeting at the Luther Burbank Center for the Arts saw about 250 residents in attendance and the effort has grown from there.

“They have taken that and run,” Gore says. “This is the most productive thing that’s happened post-fire. It has given voice to those most impacted by the fires, and put them in the drivers seat for the recovery effort.”

Weekly meetings with representatives from different organizations, such as Legal Aid of Sonoma County or Habitat for Humanity, explain intricacies of the rebuilding process and how to deal with insurance companies, government agencies and builders.

“We’re also working with the city to get answers to certain questions from the city,” Okrepkie says. “We need to clarify things so that when we go to talk to builders we don’t get surprises in the permitting process.”

Tricia Woods has worked closely with the organization and brings her own perspectives and skills to the table.

Woods, whose Hopper Avenue home burned down, owns rental properties in another part of Santa Rosa, so when it came time to find a place to live, rather than evict her tenants she found her own rental home.

“I’d rather not displace another family,” Woods says. “I have the unique situation of being on both sides.”

Despite all the time and effort expended so far, the rebuilding efforts have a long way to go and face many obstacles. The organization found that 80- to 95-percent of the people who lost their homes are underinsured. Additionally, 43 percent of the residents of the area were renters and not involved in the process at all.

And although the City of Santa Rosa is working hard to stay ahead of the process, the nature and sheer scale of streamlining permitting takes a lot of time for staff that also has to deal with the day-to-day running of the municipality.

Unforeseen externalities and unpleasant surprises keep cropping up as well. In late January, property owners found that protective walls lining Hopper Avenue, though city-maintained, actually belonged to residences on parallel streets. If the structural integrity of the walls has been compromised, replacement costs will fall on the homeowners.

A few days before that, DeNova, a large homebuilder in the Bay Area, announced it wouldn’t participate in the rebuilding efforts. An estimated 75 homeowners had expressed interest in hiring the company. Okrepkie is disappointed, but remains undeterred in his efforts.

“If a builder like DeNova, which is of substantial size, had plenty of work lined up and is already building in Sonoma County can’t entice subcontractors to come up to the rebuild, what does that mean for the builders that aren’t their size or have their workload?” he asks. “I hope that the dozens of these builders involved in the rebuild are doing their due diligence on labor and financing, so homeowners aren’t put through anymore financial and emotional distress than they already have been subjected to.”

For more information, go to coffeystrong.com.