Skyrocketing Prices Drive Single Mom to Rent San Mateo Garage for $1K a Month:

Lori Moon, Diana Torey, Barbara Caylor and Emily White, from left, residents of the 40-year-old Forest Glen townhouse development in Mountain View, Calif., pose for a portrait on Wednesday, July 29, 2015. (Josie Lepe/Bay Area News Group)

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MOUNTAIN VIEW — Seven years ago, Lori and Alan Moon moved to Forest Glen Street, a shady lane of townhouses where their son, Michael, has grown up with his friends, playing capture the flag and building forts in the bushes.

"I've got a photo of all the kids," Lori Moon said, reminiscing in her kitchen, "six of them sitting on the front stoop, just being stupid, having fun."

But life is changing in "our little world," as she called the neighborhood. It is a story playing out all over Silicon Valley as high prices push out existing residents of older neighborhoods.

Lori Moon, a resident of the 40-year-old Forest Glen townhouse development in Mountain View, Calif., poses for a portrait on Wednesday, July 29, 2015. (Josie Lepe/Bay Area News Group) (Josie Lepe)

In March, the 24 townhomes that line the lane were sold to the San Mateo-based Prometheus Real Estate Group, and residents say they have been left in a state of limbo about the new landlord's intentions. Fearing that their leases won't be renewed or that rents will significantly increase in a town where rents already have gone through the roof, four families have left, and others say their own departures seem inevitable.

"It's too much stress," said Emily White, another tenant, who came by Moon's home to discuss the situation. "People are leaving. People are emotionally detaching from each other."

"I'd just like to get my kid through the eighth grade," said Moon, whose son attends the neighborhood middle school. "But what are we going to do when we have to leave? Because Mountain View's out of control."

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About 60 percent of Mountain View's residents are renters, and Forest Glen is a microcosm of the city, where hiring by Google and other tech companies is ratcheting up competition for a severely limited inventory of rental units. The result is that new two-bedroom luxury apartments can fetch between $5,000 and $6,000 monthly, while comfortable but older two-bedroom units -- including the 1970s-era townhouses on Forest Glen and 14 more on nearby Granada Drive, also purchased in March by Prometheus -- often cost $2,600-$2,900 and up.

"Middle-income people who have roots in the community are being priced out and are moving away," said Councilman Lenny Siegel, who has met with Forest Glen tenants and Prometheus executives, who say higher rents are needed to recoup investments when older buildings are upgraded. "The source of the problem is that we have too many good jobs, that Google and others are hiring at a rapid rate" and that construction of new residential housing isn't keeping pace.

Even as the council considers proposals to build several thousand additional units over the next few years, he added, "naturally affordable housing" is vanishing, as existing units are purchased and upgraded by developers, including Prometheus.

An exterior view of the Forest Glen Townhomes in Mountain View, photographed on Aug. 5, 2015. Residents are fearing costs to cover planned renovations will be passed onto them. (Josie Lepé/Bay Area News Group)

"It's nuts," said Diana Torrey, a senior manager with a biotech firm, who with her boyfriend rents a three-bedroom Forest Glen apartment for $2,995. "I have lived in Mountain View almost my entire life. My kids have been going to school here since kindergarten. This is our home. I make six figures. And it really bothers me that my ability to provide a stable living environment for my children is out of my control because of greed."

Forest Glen's tenants include teachers, nurses, a vice president of marketing, a Google software engineer and a NASA Ames environmental engineer who serves on the Mountain View Environmental Planning Commission. Moon has been a hairdresser in Mountain View for 25 years, and her husband works in purchasing for a tech company in San Jose. Many have household incomes in excess of $100,000, but making rent still can be a struggle, even at existing levels.

Many three-bedroom apartments in Mountain View list for between $3,400 and $4,500, according to Neighbors Helping Neighbors, a nonprofit that helps clients navigate the Silicon Valley rental market. Because landlords typically ask tenants to prove income that's triple the rent, a $3,400 apartment requires a minimum annual income of $122,400, while a $4,500 apartment requires income of $162,000. Torrey lamented that she also has seen her share of three-bedrooms on Craigslist for $6,000, requiring $216,000 in income.

Emily White, a resident of the 40-year-old Forest Glen townhouse development in Mountain View, Calif., poses for a portrait on Wednesday, July 29, 2015. (Josie Lepe/Bay Area News Group) ( Josie Lepe )

Jonathan Moss, executive vice president and partner at Prometheus, acknowledged that the "demand is clearly outstripping the supply" of available units in Silicon Valley and that the result is an "untenable situation where the cost of housing is far more than people can afford to pay." He said Prometheus has a general policy of capping annual rent increases for its 7,000 existing units around the valley at 10 percent. While rents have yet to increase at Forest Glen and Granada, he said, renovated units would go for "somewhat more than 10 percent" above current rates.

Prometheus must recoup the cost of renovations, likely to start in late April or after, he explained, ballparking them at $50,000 or $60,000 per unit.

The Forest Glen affair began shortly after Prometheus purchased the townhouses on March 18. Tenants were invited to a "meet and greet" with their new landlords at Prometheus's Madera apartments in downtown Mountain View, where luxury two-bedroom apartments can go for $5,300-$5,800. Tenants reported being told by a company representative that they should expect to receive 30- to 90-day notices by August, that large-scale renovations would begin in October, and that the renovated units would rent for "whatever the tech market can bear."

A number of local news reports followed, and a crew from ABC's "20/20" even flew in last month to film interviews for a possible segment.

But Moss said in July that those early comments were "confusing" and marked by "some misinformation" -- and that the Prometheus representative who made them has been replaced. Eviction notices will not be sent out, he said.

Ultimately, he said, Mountain View must address the imbalance between job growth and housing inventory. Only then will housing prices settle down. And until then, he said, just as single-family homeowners want to sell their houses at market levels, landlords will want to set rentals as the market dictates.

And the tenants of Forest Glen will likely continue to look for new homes in other cities.

Emily White, a social worker and startup veteran who moved to Forest Glen a year ago, walked down the shady lane the other day, pointing out the empty units.

"These people are gone," she said, "and this guy's leaving over here. And this couple -- she's a physician, and he's an IT guy, and they have a new baby, and they've decided they just can't make a life here. Our Shangri-La is unhinging."