Editor’s Note: This is the first in an occasional series about the challenge of renting in Santa Cruz County.
By Jondi Gumz
jgumz@santacruzsentinel.com @jondigumz on Twitter
SANTA CRUZ >> Holly Giegerich is living in limbo, looking for a new place to rent after getting a notice from her landlord that she must move out, finding only one possibility, wondering if she will be homeless on April 2.
“I just want a place to live,” said Giegerich, 54, a petite brunette, breaking into tears as she discussed her situation in her neat one-bedroom rental near La Barranca Park, a couple of blocks from the ocean.
After a divorce and raising two children, she is dealing with a chronic illness, getting a weekly bag of groceries from Grey Bears and paying for her rental with a Section 8 voucher, which many landlords in the county decline to accept.
“I’ve called several rental property agents, dozens of Craigslist ads and I’ve have called dozens of apartment complexes,” said Audra Cobb, her daughter. “They all have turned down my mother because of being on Section 8.”
She worries her mother will end up in the streets or sleeping on family member’s couches.
“I don’t see how it’s OK to deny someone the same right to a home as everyone else just because her income comes from government help,” added Cobb. “She’s not looking for charity or anything of that sort, just for someone to rent to her and treat her like a person that she is.”
A new plan to end homelessness in Santa Cruz County identifies the primary cause as an imbalance between income and the high cost of housing.
Tight market
With a Section 8 voucher, the renter pays 30 percent of his or her income, and the federal government pays the rent.
The Section 8 program is a lifeline to more than 4,300 households in Santa Cruz County, with nearly 2,000 landlords participating.
At any given time, from 150 to 175 households with a voucher are looking for a new place to live, according to Ken Cole, executive director of the Housing Authority of Santa Cruz County, which manages the Section 8 program.
“I know I’m a good renter,” said Giegerich, who has lived at her current rental for 10 years and downsized to one-bedroom after her son married and moved to Burlingame. “I have excellent references.”
Her landlady, a woman in Los Gatos, had a stroke and her three children have entered the picture, according to Giegerich and her daughter.
According to Giegerich, who lives in the front on the first floor of the duplex, a kitchen was installed upstairs to make a third rental.
Jeff Murphy, the city’s code compliance manager, said the kitchen did not meet code and was removed, the home once again becoming a duplex.
No one answered at the phone number he had for the owner.
In November, one of the owner’s grandchildren moved in, and Giegerich got her eviction notice.
Initially she had 60 days to move out, but when she could not find a place, she got a two-month extension from the housing authority.
“The difficulty that Ms. Cobb describes in finding a unit to rent is not unique to Section 8 voucher holders,” said Cole, the housing authority chief. “We have an extremely tight and expensive rental market in our community, and it seems that rents continue to rise and vacancy rates continue to drop.”
The MLS Listing Service, Santa Cruz County Association of Realtors and local real estate agent Gary Gangnes all track local home sales and prices but there is no comparable local database for rentals.
Why demand is up
“Santa Cruz has had some of the lowest vacancy rates around for decades,” said longtime real estate agent Tom Brezsny, now with Sereno Group. “Since the crash in 2008 when more people lost homes, they had to live somewhere so they swelled the renter rolls. The increased number of renters has driven the price of rents up at unprecedented rates.”
The situation was exacerbated last fall when UC Santa Cruz enrolled 700 more freshmen than the year before, pushing more sophomores, juniors and seniors into the community and increasing rental demand at a time when few new multifamily housing complexes were built.
“Low supply and high demand creates scarcity of rentals and drives prices up,” Brezsny said.
Zillow Research estimated the median rent for all homes in Santa Cruz County was $2,571 a month in October as UCSC classes began, up 22 percent from the year before, and close to San Jose’s $2,934.
Cole said the housing authority increased the maximum subsidy several times in recent years trying to keep up with rising rents.
A March 2 increase pushed the subsidy for a one-bedroom rental to $1,362 in Watsonville, $1,388 in San Lorenzo Valley and $1,427 in the rest of the county including the city of Santa Cruz.
A check of Craigslist turned up a one-bedroom, one-bath East Cliff cottage for $1,450 and a one-bedroom 624-square-foot rental in Santa Cruz for $1,845; a handful of other listings had more bedrooms, for which Giegerich does not qualify.
Cole said Section 8 renters “routinely” rent places for more than the maximum subsidy “as long as the rent is reasonable.”
This means the renter pays more than 30 percent of his or her income for housing, something nearly half the renters in the county do, according to a 2014 United Way survey.
But Giegerich said the landlord was wary when she offered to pay more to a get a Beach Flats rental for $1,475.
Landlords’ view
At Shoreline Property Management, which manages more than 150 rental units in Santa Cruz, a majority of owners do not accept Section 8, according to Denise Agosti, a real estate agent and corporation broker there, explaining they chafe at rules set by the U.S. Department of Housing and Urban Development.
For a rent increase, landlords must give 60 days notice, and for a notice to vacate without good cause, landlords must give 90 days notice.
The subsidy is “well below what market prices are,” said Agosti, who has worked in property management for 20 years in Santa Cruz.
She noted college students pay the highest rents because “they put the most people in” a rental.
For those landlords that accept Section 8, there’s little turnover, she said.
Her recommendation to tenants with a Section 8 voucher is to accept a smaller unit than what the voucher is for before the voucher expires. If it’s for a two-bedroom unit, get into a one-bedroom unit.
“Then at your leisure, you can look for something else,” Agosti said.
Giegerich is doing that. She saw a small studio with a private yard in the Seabright neighborhood, within the subsidy maximum, and is waiting to hear back as the clock ticks.
Rent up 22 percent
How median monthly rent, the midpoint, for all rentals in Santa Cruz County jumped 22 percent.
October 2014: $2,571
October 2013: $2,107
Source: Zillow Research
