San Francisco tenants break leases in startling numbers, giving renters upper hand

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One in 13 San Francisco renters have broken their lease since the coronavirus stay-home orders went into place nearly 100 days ago, an astonishing out-migration of tenants in the city that could lead to thousands of empty rental units and give renters the upper hand in negotiations.

When measures to fight the coronavirus severely curtailed economic activity nearly 100 days ago, San Francisco landlords were fearful that widespread layoffs and income lost because of the pandemic would result in a wave of residential tenants unable to pay rent.

While that has not happened — only 3% of San Francisco tenants paid no rent in June, and another 2.5% paid partial rent — landlords are instead dealing with an unexpected problem: Rather than not paying, tenants are walking away from leases.

A new survey from the San Francisco Apartment Association found that 7.5% of renters have broken their lease over the last three months. The survey included information from 292 landlords who own 10,329 apartments, about 6% of the city’s total rental units. While the number of broken leases is not a statistic that the multifamily housing industry association has previously tracked, it’s clearly way above normal.

“We don’t have a baseline to compare it to, but I think it’s shockingly high,” said Charley Goss, the association’s policy director. “A pretty substantial group of people are leaving.”

The biggest group of tenants breaking leases in San Francisco are Gen Z workers, those 18 to 25 years old, according to landlord and tenants groups. A new report from Zillow, a marketplace for rentals and home sales, found that some 2.7 million U.S. adults moved in with their parents in March and April, a trend that nationally could lead to $726 million in lost rent this year alone. About 2.2 million of these are Gen Z.


h/t Don

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