My new favorite local news blog www.baycitizen.org recently posted an article by Elisabeth Lesly Stevens about a gentleman who owns a set of flats in San Francisco on Divisadero in the NOPA district. He inherited the building from his father who bought it so his family would always have a place to live in San Francisco. The most recent occupant of the building is the gentleman's son, who evicted a tenant in 2007 so he could live there. Now the younger son would like to move in, but can't because the city only allows one "Owner Move In Eviction" (OMI) per building.
OMI issues combined with the limited ability for landlords to raise rents has led many long-time income property owners to keep units vacant rather than re-rent them. The number of units deliberately left vacant is unknown, but nearly every San Franciscan can cite at least one landlord they know who is choosing to keep a unit empty. And all of us have seen vacant buildings all over town that have been that way for decades.
San Francisco's vacancy rate offers some clues to how many of these units are kept off market. Stevens' article cites census data which shows tone in twelve units vacant in San Francisco. If that's true our vacancy rate is roughly 8%-- one of the highest in the country The current rental market, however, feels much (much!) tighter than that. Talk to apartment-seekers and they will tell you that finding a good apartment is really tough right now. Talk to property managers and they will tell you rental rates are firming up in slower neighborhoods (like SOMA) and even rising in premium neighborhoods (like PacHeights and Russian Hill).
The nationwide average vacancy rate was 6% for Q1 of this year. This indicates that landlords are leaving at least 2% of the City's rental stock vacant on purpose for one reason or another.
You can dig into more stats and facts about San Francisco's "shadow" inventory of vacant rentals in the comments section of Stevens' article.
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