Rents in downtown Oakland steeply drop
Some speculate tumble may curb development
All you had to do to save $400 a month on a downtown Oakland apartment was wait.
Early in the pandemic, the Uptown — a 665-unit apartment complex a block from Oakland’s 19th Street BART station — offered a one-bedroom, 650square-foot rental for $2,310 a month, according to a June 27, 2020, capture of the apartment’s website from the Internet Archive.
Now, nearly four years later, a similar unit in the Uptown was listed for about $1,920 a month, plus 10 weeks of free rent and a one-time $1,000 discount.
The Uptown is not the only Oakland rental resorting to steep price cuts to bring in tenants. The city’s median asking rent has tumbled since the pandemic began, from about $2,400 a month for a one-bedroom unit in January 2019 to about $1,800 in April 2024, according to Apartment List data.
Those declines are seen mostly in downtown Oakland, home to the city’s biggest rental buildings. And with no indication that the trend will reverse, some developers may not want to build in downtown Oakland, an Apartment List researcher said.
In the past year alone, Oakland’s asking rents fell by 10%, by far the most of any of the 100 largest U.S. cities in Apartment List’s data. And over the past four years, several rental complexes in central Oakland have seen drastic rent cuts:
• A one-bedroom, 600square-foot apartment at the Lydian cost about $2,460 a month in November 2020, an Internet Archive capture shows. In May 2024, the same unit was going for $1,950.
• A one-bedroom, 630square-foot apartment at 17th and Broadway was listed at $2,740 a month in September 2020, an Internet Archive capture shows. A unit of the same size is now listed for $2,480.
• A one-bedroom, 780square-foot apartment at 528 Thomas L. Berkley Way was going for $3,250 a month in July 2020, according records from Zillow, a real estate brokerage site. It’s currently listed for $2,500.
Some tenants of those buildings told the Chronicle they had mixed feelings about living in downtown Oakland. They generally said they liked their access to restaurants, bars and public transportation, but some added they felt they were overpaying for their units — and that there wasn’t much keeping them living downtown.
“When the rent is still relatively expensive … it does make you think about going somewhere else,” said James Hutmacher, who lives in the 17th and Broadway apartment complex.
Oakland’s largest rental developments are concentrated in the city’s 94612 ZIP code, said Rob Warnock, a housing researcher with Apartment List. That means changes in Oakland’s estimated rent could reflect shifts in its downtown market. In other words, while the tenant of a high-rise in downtown Oakland might be able to move to a cheaper unit down the street or even see their rent drop, the same might not be true for the renter of a house in North Oakland.
Other data seems to support the idea that the price drop downtown is driving the citywide decline. Zillow estimates that the 94612 ZIP code, which includes Oakland’s downtown, Uptown and Lakeside neighborhoods, saw a 7% decrease in asking rents from April 2020 to April 2024, and a 10% fall over the past year.
A slightly smaller four-year dip was estimated in West Oakland’s 94607 ZIP code, according to Zillow. The company uses listings on its site as the foundation for rent estimates, while Apartment List bases its estimates on U.S. Census Bureau data.
Softened demand, not more supply, is chiefly behind Oakland’s declining rents, Warnock said. The rise of remote work — especially in the tech-friendly Bay Area — has emptied downtowns in Oakland and San Francisco, he added.
“We didn’t add a ton of new apartments, but we did pull a lot of people out of needing or wanting those apartments,” Warnock said.
The softened demand has contributed to Oakland’s relatively high apartment vacancy rate — more than 9% as of April 2024. That share, based on a sample of properties with at least 10 units in Apartment List’s system, is the highest of any California city.
Those vacancies have dogged apartment developers, with one calling downtown Oakland “perhaps one of the worst submarkets” in terms of rental revenue. Many larger complexes are offering weeks or months of free rent to lure back tenants.
With developers struggling to profit from rentals and interest rates remaining stubbornly high, it may be hard for investors to justify building new Oakland apartments, Warnock said. But some could continue to build, he added, hoping to capitalize on downtown’s eventual rebound.
If Oakland’s rental market does shift in landlords’ favor, many downtown residents might not be able to keep their lower rents. Many of the apartment buildings downtown were built after 1982, meaning they’re not subject to Oakland’s rent control law. And California’s statewide rent cap doesn’t apply to units built in the past 15 years.
But for now, the relatively lower rents and concessions are attracting some tenants like Nathan Barker, who lives in the Adam’s Point neighborhood but decided to tour the Uptown, which he said was “surprisingly cheaper.” If that changed, he added, he might have looked elsewhere.
“I think it’s just about the price,” he said.