Berkeley ranks as most expensive college town in US, according to Realtor.com

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Tim Hyon/Staff

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Berkeley ranked the highest of 300 cities throughout the country as the most expensive college town, according to the National Association of Realtors.

The association’s official website, Realtor.com, published the rankings Tuesday and ranked more than 300 college towns by median home price, listing the top 10 most expensive and least expensive areas throughout the nation.

In determining which cities were the most expensive college towns, the association used two criteria: first, that the area had more than 5,000 student residents and second, that these students composed more than 20 percent of the town’s population.

From that information, the association found that the median home price in Berkeley was $849,000, ranking the city as No. 1, followed by Santa Cruz, California, and Boulder, Colorado. The least expensive college city was Muncie, Indiana, with a median home price of $77,900, followed by Charleston, Illinois, and Macomb, Illinois.

But the listings are no surprise to UC Berkeley’s students or the city of Berkeley, which have had ongoing conversations about alleviating the city’s high cost of living.

According to Igor Tregub, vice-chair of the city’s Housing Advisory Commission, members of the workforce in the private sector are increasingly unable to find housing in San Francisco because there isn’t sufficient supply. Instead, these workers tend to reside in surrounding Bay Area neighborhoods.

“Berkeley has benefited from positive changes made in San Francisco but has also suffered from afflictions of the displacement that is endemic to the Bay Area,” Tregub said.

John Ellis, a UC Berkeley city and regional planning lecturer, agreed that houses are not being built fast enough to accommodate workers seeking housing in the Bay Area.

Ellis added that current policies complicate the process of building homes in Berkeley.

For instance, California’s Proposition 13, a tax reform act capping property tax increases at 2 percent a year, deters the city from building residential homes because developers benefit more from expanding commercial developments.

The Housing Advisory Commission is reviewing solutions for surging housing prices, including a mitigation fee, which fee developers can pay in lieu of making a certain number of units as low-income housing and is assessed per unit of rental housing. Originally, the fee was set at $28,000 but has since been temporarily discounted to $20,000 by City Council.

Another solution, proposed by Ellis, is the construction of micro-units, or properties that measure about 220 square feet in total. Ellis said micro-units are a compact and affordable living option.

Mijoo Kim, a UC Berkeley sophomore, said developing affordable housing is important, especially for students who already struggle with paying tuition.

“I used to live in SoCal, and I remember that a one-bed apartment was less than $2,000 and homes were easily found,” Kim said. “Here, you’re very lucky to even find a house.”

Contact Jennifer Kang at [email protected] and follow her on Twitter @jennikang.

Correction(s):
A previous version of this article incorrectly referred to Igor Tregub as the chair of the Housing Advisory Commission. In fact, he is the vice chair of the commission.

A previous version of this article also incorrectly stated that the Affordable Housing Mitigation Fee is the fee developers have to pay before building a house. In fact, the fee, which developers can pay in lieu of making a certain number of units as low-income housing, is assessed per unit of rental housing.

A previous version of this article also incorrectly stated that the mitigation fee may potentially increase from $28,000 to $34,000. In fact, although the fee was originally set at $28,000, it has since been temporarily discounted to $20,000 by City Council.

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  • elrod

    Is Palo Alto not a college town? I don’t see how that town isn’t the most expensive on the list.

  • I’m pretty sure the Nimby berkeley city council drives away any new building or housing in the city. you want a permit to build? denied! you want a permit to rennovate? need a public hearing first! then denied!

    then people wonder…. why do we not have enough housing and why are all of our apartments run down?

    figure it out sherlocks.

  • bob

    Interesting how as soon as Prop 13 passed, CA public schools went to the bottom of the list nationwide, while simultaneously ensuring that no new properties would be built. The widest income inequality disparity is right in our own backyard. It appears that old, ensconced Berkeley citizens continue to reap rewards of skyrocketing home prices while anyone dumb enough to show up now will face a mountain of debt going forward. Congrats NIMBYS, you won!

    • diogenes

      Prop 13 passed in 1978. Bob tells us that since then “no new properties” were built in California. What are you on, Bob?

  • BillPasadena

    I would have thought the most expensive college town would have been in some greedy right-wingnut town in texas.

    • diogenes

      In the past 15 years over 30 apartment buildings of 30 units and more have been constructed in Berkeley. They were developed by city hall “insiders” with a pervasive appearance of corruption surrounding the entire process, and they are mostly owned by giant predatory absentee investment firms like Blackhawk, owner of student-killing “hell hole” (tenant quote) Library Gardens, an NYC hedge fund that owns 400,000 apartments in America, our country’s biggest slumlord. The money they strip-mine from renters pockets — two and three to a room to pay their gouge rents — is pumped to NYC — Berkeley never sees a nicke of it. It trickles down through Chinese sweatshops — or wherever the casino lords of Manhattan decide to “invest” it. And now the “developers” of proposed further rent-strip-mines like the Harold Way project tell us that these will help Berkeley provide “affordable rentals.” Just how stupid are you, Berkeley?

  • CalAlum99

    I guess they forgot places like Boston and New York.

    • still trying

      Berkeley is geographically a small town and cannot grow anymore without building up. Boston and New York are much larger in size and are not subjected to the possibility of a major quake, well one every 150 years. The problem with that is the type of buildings that are going up are mostly poorly constructed and being built for students. Very little is being built for new families or for someone looking to down scale in size. Another problem appears the poor construction and building for students is the noise and trash they create. (Library Gardens) is a good example. All the older people moved out when the City and property owner refused to address these trash and noise issues. Older couples looking to down size but not wanting to move out of Berkeley will not want to move into a building that will be trashed and not provide a peaceful life, so they stay were they live which prevents the turn over needed for a healthy single family home market. We are also built on a fault line, one of the most dangerous in California. Without the City spending more on infrastructure the City will not be able to support the housing that is needed. Berkeley faces more than 600 million in sewer upgrades, but the City continues year after year spending less to improve them. Everyone is getting the cart in front of the horse and Berkeley’s resident will have to pay for a declining quality of life. Presently according to stats compiled recently, trash and noise complaints are rising double digits every year. They now consume an ever increasing percentage of calls for police and fire which puts all residents at risk. Our City leaders are negligent in planning for the future.

    • Annette

      Headline is a bit misleading since students have to be comprise more than 20% of the city residents. So though Boston and NYC may have higher median home prices, apparently the student population percentage is smaller.

      • CalAlum99

        Got it, I had skimmed the article, missed that part. I guess Cambridge, MA didn’t make the threshold % either.

    • Nunya Beeswax

      Not college towns.

  • Pixilicious

    The fact is, Berkeley is a nice place to live with a great university and folks will always bid up the price of housing to live here. Muncie Indiana is a horrible place to live with an awful school and nobody with any brains would want to live there. That’s why it is cheap. You get what you pay for.

    More to the point, Kang seems to believe that the remedy is to simply build more housing.. Uh where?? Short of tearing down existing neighborhoods of single family houses and constructing inner-city tenements, there’s not a whole lot of space available to build anything in Berkeley; certainly not anything that would reverse housing cost trends.

    It’s all about demand, not supply and this article is probably more worthy of someone who should be living in Muncie Indiana rather than Berkeley.

    • diogenes

      “Inner city tenements” are exactly what Berkeley has been building for the past 15 years, with more on the way. Except they’re pitched by hired liars as providing “affordable housing” and “housing for empty nesters”. Our city government and its planning department give every appearance of being corrupted by absentee “development” and rent-serf “investment” money. It will only get worse as long as this is allowed to continue.