by Rye Druzin
Palo Alto's housing market is known for its million-dollar homes and exclusivity. But for those looking to rent, the rates and lack of supply have begun to squeeze many out of the market altogether.
Matt Bauman, a 28-year-old business student at Stanford, has faced the struggle to rent a home in Palo Alto for the last few months. Bauman, who currently lives in a Stanford apartment with his wife and two young girls, wants to move his family to Palo Alto this summer. He said that the process of finding a home to rent is both frustrating and stressful.
"Not only are there a lot of people, there are a lot of people who also have the same trouble finding a place who are perhaps more financially able to offer more money than us," Bauman said of Palo Alto's housing market.
With an upper range of $3,000, lately Bauman has found just two listings within his budget. Three-bedroom homes on Craigslist in March ranged from a $4,000 duplex to a $7,000 Midtown home.
Some people have attributed the rise in rents over the last few years to the boom of highly paid high-tech jobs. These workers are attracted by Palo Alto's amenities, good schools and relative safety, according to Realtor John Chao of Action Properties, Inc., Mountain View.
"It's fierce," Chao said about the rental market. "You have to be ready to be rejected several times. There are many potential renters coming to see homes as soon as they get listed. For most of the folks, it's just a fierce competition, and it's very hard."
Lena Chow, a landlord in Palo Alto who has rented out a cottage on her property since 1997, knows the competition firsthand. She described her latest open house as "a real zoo."
"There were probably more than 20 people who came through to look at it, and seven strong applicants completed the application," Chow said.
During the open house, at least two potential renters made comments that hinted that they were willing to pay more due to the competition, a practice that can start bidding wars for homes. Would-be renters interviewed for this article said that they had witnessed such offers.
For some the housing market in Palo Alto and the surrounding area has become so competitive that they have been forced to move elsewhere in the Bay Area.
"Facebook, Yahoo and Google have knocked up these prices because they pay their people so well," said Susan Kudelka, a personal assistant whose clients live in and near Palo Alto. "Those of us who live and work in the vicinity cannot live in the area. It is so hard for me to commute across the bridge for my work that I am trying to buy my way out of my lease and move back onto the Peninsula."
Kudelka, who makes around $50,000 a year, lived in East Palo Alto for eight years until August 2013, when her landlord decided to sell the home. When she started looking around for a new rental, she said she suffered "sticker shock" due to the rise in prices since she moved to East Palo Alto in 2005.
Kudelka ended up renting in Newark where she pays $150 more a month for an apartment she shares with her dog, in addition to more than $300 a month on tolls and gas for her commute. She said that she believes there is little chance for her to find a home on the Peninsula in a place she would be comfortable with.
"The people who are being paid outrageous salaries are able to offer more money and snatch up the property," Kudelka said. "It quashed my chances, is an emotional downer, and the other emotion that arises is my resentment towards the companies."
For Bauman, just finding a place with rooms and space for his family has proven to be a struggle. While he admits that the market is limited, he says that starting to look six months before his lease runs out has taken off some of the pressure. But the problem of getting the right home has raised concerns for him.
"(Finding a home) is literally the one piece of the puzzle that would make our lives amazing," Bauman said. "All of my stuff is perfect -- my friends, my family, my job -- but this one piece is missing. It feels extremely unlikely that we'll find an amazing place to live, and it's a little stressful and consumes a lot of time and energy to be checking and everything. And if something comes up then the stress increases because of the competition."
Bauman echoed Chao's statement about what draws people to Palo Alto, saying that "we don't live here for the housing, we live here for the people, the recreation, the entertainment. We have our group of friends nearby, and University Avenue is fun. You can find that in other places, but I think Palo Alto has a special feel."
Bauman may have time to find a place, but finding the right place is always on his mind. When asked what advice he would give to other would-be renters, he replied that "it's about getting on the ball early, because it will take a while unless you get really lucky."