Subsidized rents are rising another 7% this year in Alameda County, the third consecutive year they have increased.
Various subsidy programs for senior apartment complexes and for subsidized tenants in other housing rose 7% last year, too. In the previous year they went up 4%, bringing the three-year increase to 18%.
However, the percentage increase is added each year, similar to compounded savings interest. That means any person who has been in a subsidized apartment for the past three years is really paying a 19% increase.
The rent increases are allowed under HUD rules. They are tied to the Area Median Income (AMI), under a complex formula. The AMI also includes Contra Costa County at the same figure.
The higher the AMI goes, the higher the subsidized rents are allowed to rise. Management firms are not required to raise rents, but may do so to the ceiling set by HUD.
In effect, prosperity in Alameda County, with its increasing population of high-salary, high-tech employees, is driving lower income people’s rents upward. HUD bases its formula strictly on household income, not new housing prices.
Building far more houses in the county might help the new housing market for the many tech workers commuting to jobs in San Francisco and the Peninsula, but it won’t impact the HUD formula.
Rent increases over the past three years have been pushing out seniors and others living in subsidized housing. They can no longer afford the rent, for example at $190 more per month than when they moved in three years earlier. The $190 per month totals $2280 per year. That’s a huge sum for some seniors who are depending on savings and Social Security payments.
Tenants have worried about how little money they have left to pay for the remainder of their monthly obligations. One senior resident, who said she lost her job, could no longer afford her subsidized apartment, and felt fortunate to find a much cheaper place in the North Bay, though she preferred her Pleasanton unit.
Rising rents have also contributed to the increase of homelessness in the county, according to a report on a homelessness survey taken in January.
The HUD-allowed increases for the past three years came after several years of no rent hikes at all, said Pleasanton Housing Division Program Manager Steve Hernandez.
The area economy was down before 2013, so the AMI did not grow, according to Hernandez. Further, HUD added some adjustment time for the numbers to settle in, so the first rise allowed in rents was the 4% in 2016-17, then 7% the next year, and 7% again in 2018-19.
The year starts at different times for different apartment complexes. It begins when the apartments are fully leased, and goes for the next 12 months. The cities notify the apartment owners about the rent increase limits. At the end of the year, apartment owners must submit a form stating that they followed the rules. There are a variety of subsidy programs, and rules vary among them, depending on the kind of program.
In Pleasanton, the city has city-owned land that was used at Kottinger Gardens. Mid-Pen Housing is the administrator there, said Hernandez. Other developments have other administrators, including a private developer’s management company.
In Dublin, Eden Housing has worked closely with Dublin in establishing subsidized apartment programs in several projects.
In Livermore, applications for 72 units of senior housing are no longer being accepted. However, the nearby 42 units of non-senior housing is still taking applications. It is under construction, and expected to open next year. Both projects are managed by Mid-Pen Housing.
Under construction is Sunflower Hill Pleasanton, a community for 44 people with special needs. It is being managed by Satellite Affordable Housing Associates and Sunflower Hill.