By: Stephen Jackson, Senior Vice President, Capital Markets – Multifamily
Living close to – or within reasonable walking distance – of a BART station has become perhaps the crucial factor for Bay Area residents. More and more Bay Area companies report that employees are citing ease of commute as one of the primary factors when deciding on a job. Can they get to and from work quickly and efficiently on both ends of the journey?
While employers are making location decisions using access to mass transit as one of their criteria, employees are more often making close proximity to BART their number one priority when renting an apartment. BART parking is maxed out at most stations. Garages and lots throughout the BART systems routinely fill by 7:30am at the latest during the work week, making it increasingly difficult for commuters traveling to BART by car from close in (but not walkable) locations as well as far flung suburbs to use the system. Add to this that BART parking rates continue to increase: eg. parking costs can range from approximately $600 a year at outlying stations such as Richmond, to almost $2,000 per year at popular stations like West Oakland. (NOTE: until 2014, parking at all BART stations was free.)
This makes transit-oriented development all the more important in the Bay Area and rental apartments within easy access of BART stations increasingly valuable since commuters can reduce travel costs (and hassle) by leaving their cars behind – a big plus, especially with the Bay Area’s heavily congested roadways.
San Francisco saw transit utilization increase 10 percent between 2004-2014 and is the fourth most heavily-used mass transit region in the country (after LA, Chicago and Washington DC). But, according to a report by SPUR, at current rates of ridership growth, BART’s ability to transport riders across the Bay will be maxed out by 2024, further impeding access to a BART station by car.
We have the most expensive rental housing in the country here in the Bay Area and many employees are being priced out of urban living so are forced to look to the suburbs. For these renters, BART access is critical. Yet, BART expansion is incredibly difficult and, even where it might be possible, it will take many years to realize. This means that landlords of properties within easy access of existing BART stations are sitting on some of the most valuable properties in the Bay Area.
For more on the role of BART and mass transit in the future outlook for the Bay Area’s rental housing markets or to discuss other trends which impact those markets, contact: Stephen Jackson, SVP, head of Capital Markets-Multifamily Investment Sales , JLL +1 415 395 4939.
For a national look at Multifamily investment sales, read our recently released 2015 Q4 Multifamily Investment Outlook report here: http://www.us.jll.com/united-states/en-us/research/multifamily