Cruz County renters as well as homeowners in the lurch.

Santa Cruz County third most expensive in nation: Renters waiting for economic recovery

The median sales price for a home has plummeted 40 percent in four years, but rents have not.

In Santa Cruz County, a full-time worker must earn $33.27 per hour to afford a modest two-bedroom rental, according to the National Low Income Housing Coalition, which released its "Out of Reach 2011" Monday detailing the impact of the recession on renters. As a whole in California, a worker needs $26.17 an hour for a two-bedroom rental. In Arizona, you'd need just $17.45.

Santa Cruz was rated the third most expensive place to rent in the nation, after San Francisco and Stamford-Norwalk, Conn., according to the coalition, which favors ending or amending the income tax deduction for home mortgage interest to shift that money into affordable housing programs.

Once-secure working and middle-class renters are feeling squeezed.

Half of America's renters are paying more than 30 percent of their income for rent and utilities, and renters with very low incomes have little left after paying for food and gasoline to save or invest in education to move out of poverty.

In Santa Cruz County, about 70 percent of Latinos and 44 percent of white renters spend that much on rent and utilities.

Newcomers are surprised to find small, rundown cottages in the Seabright area of Santa Cruz with landlords asking more than $1,600 per month.

It's hard to find a single statistic to portray the local rental market because no company or agency tracks all the rental units.

RealFacts, a research company in Novato, reports first-quarter asking rents in Santa Cruz County averaged $1,522 per month, down from $1,628 per month in 2008 but up 1.4 percent from a year ago.

The rate is higher for a two-bedroom, one-bath unit, $1,664 per month, and a three-bedroom, two-bath unit, $2,188 per month.

However, these numbers represent only 1,610 apartments in complexes with 100 or more units, a tiny sliver of the county's rental market.

The federal Housing and Urban Development Department tracks "fair market rent," which covers rent plus utilities. Fair market rent in Santa Cruz County has risen from $1,334 per month in 2006 to $1,583 in 2008 per month and $1,768 per month in 2010.

Another factor is asking rents in Santa Cruz are influenced by the presence of a university with enrollment of more than 16,000, while those in Watsonville are influenced by the agriculture sector and its lower-paying jobs.

There is a huge difference, of a three-bedroom, two-bath house in the Watsonville countryside available for $1,800 per month compared to the same size house on the Santa Cruz Westside offered for $2,400-$2,500 per month.

Proximity to the university is what's driving the price, noting the Westside house was rented to a UC Santa Cruz student who is about to graduate and his friends.

Demand for Watsonville rentals is slow from December through February, when there are few jobs for farmworkers, then picks up in March.

All you have to do is put a (for rent) sign up and within hours you'll have two or three candidates," Mello said.

In Santa Cruz, demand is high year-round because of proximity to the beach, so renters must be ready when an opportunity arises.

A two-bedroom house on the Westside listed on craigslist for $1,600 per month resulted in 25 calls in an hour and the listing quickly disappeared, according to a family who didn't call soon enough to see the house.

Most Property Management offices only have 3-4 vacancies now, but expects more as departing college students give notice.

A two-bedroom house in Scotts Valley is going for $1,450 to $1,500 a month, with homes in Boulder Creek a couple of hundred dollars less, she said.

We've rented to people who have lost their homes, she said, noting renters can qualify if they have a steady history of employment and are current on credit card bills.

Santa Cruz County Housing Authority has seen more families with rental voucher subsidies moving because their landlord is in foreclosure.

Since the first of this calendar year, we have seen five or six per month, he said. "It's extremely disruptive for the family. They're not told by the landlord its happening."

Housing Authority, which receives $46 million in federal funds for 3,800 rental vouchers for low-income households, has a waiting list with more than 15,000 families on it, with typical wait times three to five years.

The authority's fees to administer the programs will be cut because of congressional efforts to reduce the federal deficit but the amount of rental subsidies is expected to remain the same for next year.

We're the perfect storm for high rents. We're small urban county, almost completely built out from a zoning standpoint, and locked up by mountains, oceans and agriculture. It's an extremely difficult market."