By Dennis Kaiser

Common’s Amalia Paliobeis, Director of Real Estate, will be speaking at Connect Bay Area tomorrow. Common is a national property manager that designs, operates, leases, and brands multifamily properties to appeal to today’s renters. She shares a few insights before the conference about the trends she sees driving the market, the impact a tight housing market is having, as well as solutions that are emerging in our latest 3 CRE Q&A.

Q: What are some of the overarching trends you see driving the Bay Area market as the year progresses?
A: It’s no surprise that, for me, the biggest housing trend in the Bay Area is affordability. Housing at an attainable price point for the “missing middle” group of the Bay Area workforce has become almost impossible to find. Today, the median one-bedroom rent in San Francisco is a shocking $3,700. Twenty-four percent of Bay Area households who rented this past year spent more than half of their gross income on housing costs.

If that doesn’t say affordability crisis, I don’t know what does. Even with the large swath of lucrative professional opportunities in the area, many people do not realize that several tech companies like Oracle, Paypal, and Apple actually have median salaries well below $100,000. In fact, Tesla’s median salary is $49,920, making rent at 33% of his/her income $1,390. New jobs in the Bay Area continue to outpace the number of housing units coming online (in some cases by 3.5x). As long as there are well-paying jobs, people will want to live in the Bay Area, and ideally close to where they work. Yet, developers I work with on a day-to-day basis are struggling to make workforce rents (and even luxury rents) pencil, and I only see this trend getting worse and worse.

Q: How are people adjusting their views on living in the Bay Area, given the severe housing crunch?
A: Working for one of the largest co-living operators in the country allows me to see first-hand how people are changing the way they share. Simply put: value and experience are growing more meaningful than ownership. It’s no secret that people have been sharing their apartments with others to save money for hundreds of years, but now they’re seeing it as a long-term option. Sharing and renting for later into their lives allows people to save money while living closer to where they work. The norms are changing.

Q: What have you learned from your experience creating co-living spaces, and how is that shaping new communities on the West Coast?
A: I’ve learned so much about the state of multifamily managing Common’s West Coast real estate acquisitions, and everyone at the company has gained valuable insight into the mind of a modern renter from our 4+ years of work in the co-living space. At this point, our sales, marketing, and operations team have become experts in making sure city-dwellers are getting everything they need out of the place that they live: affordable rents, a sense of convenience and a place to build community.

The fact is, co-living isn’t going away. Right now, I’m negotiating at least 30 different deals (the majority having over 200 beds) across the West Coast with Common as the operator. Working with developers has gotten easier, and we’ve expanded the different forms and ways we can work with them – from taking on the operations of a traditional multifamily building to utilizing our expert architecture team to design a new 300+ bed building in San Diego. My biggest learning has been understanding how co-living can stretch beyond typical layouts and designs, while keeping our renter experience top priority.

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For comments, questions or concerns, please contact Dennis Kaiser