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Rising Prices in Oakland Push Artists Into Risky Housing

Rescue workers on Tuesday continued sifting through the damage of the Ghost Ship in Oakland, Calif., where at least 36 people died in a fire during a concert Friday night.Credit...Jim Wilson/The New York Times

OAKLAND, Calif. — San Francisco is full of big dreams. Oakland is where people make them work.

The city of about 400,000 sits on the east side of San Francisco Bay and historically has served as a low-priced alternative to its more famous neighbor, a place where service workers could buy a home, young professionals could get an extra bedroom and artists lived in low-rent warehouses while sleeping beside their next installation.

But over the past few years, as prices have surged across the Bay Area, Oakland’s pricing advantages have mostly eroded. Rents have increased 70 percent in five years, more than in any other big city in the nation, according to Zillow, the online real estate pricing service. The city’s $2,899 median rent is now among the highest, and just short of median rents in Manhattan.

The conditions that led to the fire that killed at least 36 people on Friday night was a result of a dangerous mix of factors in which dozens of partygoers were invited to a warehouse that was dark, congested and mazelike, with flammable art and a jerry-built electrical system.

The victims died because they were trapped in a tinderbox. Yet the economic backdrop of the tragedy is also important because it shows how rising rents and fears of eviction can push vulnerable people in a desperate search for housing to unsafe spaces.

Oakland’s housing prices have always fluctuated with Bay Area booms and busts, and complaints about gentrification were part of the 1990s dot-com boom here as well. The effects are more pronounced this time around because as tech companies have migrated closer to San Francisco from places like Palo Alto and Mountain View, Oakland has been pulled deeper into Silicon Valley’s orbit. Uber, the ride-hailing service now valued at almost $70 billion, plans to open an office in downtown Oakland in the next year or so.

This crisis isn’t limited to the Bay Area. Across the country, and especially in expensive cities like New York and Seattle, urban areas have been flooded with high-paid tech and finance workers who have pushed up rents. Blue-collar workers and families have been displaced to cheaper housing on the fringe, but many creative types have made do by finding alternative living arrangements like industrial property, recreational vehicles and even boats.

In Oakland, where for decades warehouses have served as a haven for artists, this often means living at the whims of any landlord willing to look the other way.

“There’s a kind of unholy alliance in which these buildings are leased with a ‘nod nod, wink wink, nobody lives there,’ ” said Thomas Dolan, an Oakland architect who specializes in live/work spaces and helps building owners convert illegally occupied warehouses into legally occupied lofts. “It’s a precarious situation where tenants exchange cheap rent for substandard housing — and if they rock the boat, they’re out.”

In the aftermath of the fire, artists’ grief over lost friends quickly turned to anxiety that a crackdown could lead to widespread eviction from one of the Bay Area’s few remaining sources of affordable housing.

“The longer-term fear is, ‘Does this mean the end of these spaces in the Bay Area and with it the last vestige of any kind of affordable artists community?’” said Aaron Muszalski, an artist who has spent the past two decades living and working in warehouses across the region.

Unlike San Francisco, whose once-gritty waterfront has been transformed into a high-end neighborhood where the San Francisco Giants play next to multimillion-dollar condominiums, Oakland can still lay claim to the Bay Area’s industrial past. There are bars still frequented by dockworkers, and hipsters wear T-shirts emblazoned with the hulking white cranes that line the Port of Oakland.

Many of the city’s industrial warehouses originally served as a waypoint where shippers stored cargo. But as international commerce was accelerated by “containerization” — the process by which rectangular crates full of products like California wine and Chinese electronics can be loaded by cranes between boats and trucks — warehouses went empty and artists moved in.

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The inside of the Oakland warehouse after Friday’s fire. The conditions, dark and mazelike, created a perfect situation for the fire.Credit...City of Oakland

The result has been a vast gray economy of live/work spaces that, legal or not, are regarded as an important source of affordable housing and part of what makes Oakland, Oakland.

“There have been efforts to legalize Oakland’s live/work spaces for years,” said Joshua Simon, executive director the East Bay Asian Local Development Corporation, a nonprofit that helps develop affordable housing. “Today it’s critical that we find ways to use every housing option that’s safe — the worst thing we could do would be to overreact and eliminate this type of housing as an option.”

The catch, however, is that once a loft becomes legal the rent becomes unaffordable. So while living in an illegal space may require things like coping with a makeshift kitchen with a sink that drains into a bucket, it’s better than living nowhere.

“You bring these places up to code and you end up pricing out the people who make Oakland such a great place,” Mr. Dolan said.

Cheap rent is not the only draw. Several current and former warehouse residents described being absorbed into a broad community centered on building and making noise, whether it’s daytime hammering and welding, or throbbing nighttime parties whose locations are secret.

Part of the bonding experience is in maintaining the charade that nobody lives there.

There are rituals like renting U-Haul trucks to store mattresses on days when the building owner sends an insurance inspector over. If the fire department knocks, you ignore it.

Before he became the owner of the Starline Social Club, an Oakland bar and music space, Adam Hatch, 38, was part of an illegal live/work art gallery called Lobot. He remains connected with the scene, and on Monday night his bar was full of A’s hats, Raiders jackets and tears as patrons observed a moment of silence for a victim who painted nails there on Monday nights.

“Sometimes it’s just sort of magical to be in a place you’re not supposed to be,” Mr. Hatch said of the warehouse scene.

But there is also a risk, as the fire at the warehouse, known as the Ghost Ship, showed. Most of the power accrues to the so-called master tenant — the person whose name is on the lease.

The people who lived at Ghost Ship in the months preceding the fire painted varying pictures of that dynamic.

Shelley Mack, 58, moved into one of several mobile homes housed inside the warehouse in October 2014, paying $700 a month. Soon, she said, the building’s head tenant, Derick Ion Almena, was asking her for another $700, this time for upkeep. She said he cut off electricity for people who disagreed with him and blocked an upstairs exit.

Others, however, said they were just happy to have a place to live. Josh Hershberger, 31, a tattoo artist and muralist, had been homeless before he found the warehouse. Mr. Almena let him pay rent by the day — $10 or $20 — and provided him with a community. “This was my home. It was a foundation.”

Without the Ghost Ship, he said, he would have been on the street.

A version of this article appears in print on  , Section A, Page 14 of the New York edition with the headline: Pushed by Prices Into Illegal and Risky Warehouses. Order Reprints | Today’s Paper | Subscribe

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