Bakersfield's rental housing market is running hot, industry observers say, as construction of new apartment complexes continues to fall well behind demand.
The latest citywide figures from real estate brokerage ASU Commercial show Bakersfield's multifamily residential vacancy rate during the last two years has fallen from about 4 percent to 2 percent. In some areas, such as east Bakersfield, there are essentially no vacancies at all.
Meanwhile, the average rent in Bakersfield for a three-bedroom apartment — $1,092 during this year's second quarter — is up more than 4 percent year over year. In the past two years, rental prices for a three-bedroom has risen by more than 10 percent.
For the average single-bedroom apartment in Bakersfield, rent rose a little less than 4 percent during the past year, having increased only very modestly over the prior 12 months. It now stands at $791.59 per month, according to ASU.
"This is amazing!" ASU's senior vice president of multifamily properties, Marc A. Thurston, said by email. He could not recall another time when vacancy rates were as low as the 2-percent range for five consecutive quarters.
Though the situation is good for landlords, it speaks to a housing imbalance that has created a crisis in some parts of California and is now accelerating locally.
People in the business blame high regulatory, labor and building-materials costs. Unless state government lowers the economic hurdle for new housing development, they say, the housing shortage will only get worse.
Another factor is the booming economy, said Greg Terzakis, senior vice president of the California Apartment Association. People doing well financially shed roommates or move into their own places, he said, adding 2 percent represents a "really tight market."
"When the economy is going up, (apartment) prices do well," he said.
But people not doing so well economically are suffering as rental asking prices continue to climb. Landlords see this up close.
"We think that because the vacancy rate is so low it shows that Bakersfield does have a housing shortage," said Ian Sharples, spokesman for the Income Property Association of Kern, which represents local rental property owners. He said the organization hopes to see greater incentives for development of multifamily properties.
Bakersfield property management professional David Watson said even the smattering of new projects under construction around Bakersfield are unlikely to make a dent in the housing imbalance.
"It's going to help some people a little bit," he said. "It's not going to make that much difference."
ASU data show the highest rents are in northwest Bakersfield, where a two-bedroom went for between $1,125 and $1,525 per month between April and June. The city's southwest was the next priciest, with three-bedroom rents ranging between $765 and $1,512 per month.
The least expensive place to live was in the northern part of town. There, according to ASU, a two-bedroom went for between $600 and $750 per month.
Watson said the market isn't as bad as it is in Southern California or the Bay Area, where some people actually sleep in shifts to stretch the housing supply. But something will have to be done if Bakersfield hopes to attract people from other cities, he asserted.
In a way, commuting patterns suggest that's already happening.
"We are already getting an influx of people from Los Angeles. They're willing to drive two hours" to work, he said.
"It's not an epidemic here yet," he said, "but it's going to happen."