Nonprofits Struggle to Afford Increasing Rents

Jul 28 at 1pm

It's easy to think about how rent increases affect what you personally have to pay to live in San Francisco, but it can take a moment longer to consider what other rents trending upwards mean for the city as a whole. For example, according to SocketSite, office rents have gone up 81% in the last four years and are likely to continue to go up for the foreseeable future. Even though it feels like a lot of what's being built in SF right now are offices, most of these developments won't be available until after 2015. 

The rather ominous post on Socketsite reported that the average rent for office space in the city right now is $56.84 per square foot, which is eerily close to the $60 per square foot that SF saw during the dot-com bubble. Nonprofits have been hit especially hard by these increases in pricing since they aren't exactly flush with cash. A number of nonprofits have made homes for themselves in Market Street's "class B" buildings, which tend to be a little older and cheaper. 

As Mid-Market rents have gone up in the last few years, most nonprofits have seen big jumps in their rents when it comes time to renew their leases. This is partly because the demand for any office space is high, and supply is low, and partly because landlords have realized they can pretty easily turn class B buildings into class A buildings, which command higher rents that for-profit companies can afford.

Due to these dramatic increases in rents, many nonprofits have moved from their traditional Market Street, SOMA, and Tenderloin locations. Heck, some have been forced to leave the city all together and it's hard to blame them when Oakland rents are roughly half as much. An article on SFGate offers some possible ideas to slow the drain of organizations and services that help some of the most challenged and already underserved populations in the city. 

The ideas include adding a "nonprofit impact fee" to new developments in places like SOMA where there's a trend of zoning up and even using excess space in government buildings. Only time will tell how feasible these suggested fixes are, but it is at least a little reassuring to know that some of the organizations that do a lot of good in the city won't be leaving without taking a hard look at creative solutions first.

[Via: SocketSite and SFGate]

Photos by Roey Ahram and Omar Bárcena

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