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What We're Facing

Nov 3, 2017

If you’re a renter in Sacramento, looking West may fill you with trepidation. A steady stream of residents continues to approach from the Bay Area, with no signs of letting up. While these new residents bring with them the potential for more vibrancy in the region, they also bring an unsettling prospect - rising rents as our housing market gets increasingly squeezed. 

This migration and its impacts can seem like a tidal wave, a force of nature immense and beyond our control. But it doesn’t need to be this way. Tools exist to protect residents from being forced out of their homes and suffering through increasingly brutal rent increases. One of the most powerful of these tools is rent control.

Before delving into the power and structure of rent control, it’s important to take stock of the Sacramento region’s unique situation, and the potential for harm the region faces if current trends continue.

Perhaps no attribute of Sacramento makes it more vulnerable to increased housing costs than its geographic location. For many, we stand as the closest, most desirable urban area to escape to after being forced out the Bay Area due to the rising cost of living. A relatively short drive away, the Bay Area currently represents one of the biggest job centers in the world, with a GDP roughly the size of Belgium’s. This GDP will likely continue to balloon: last year the Bay Area’s pace of economic growth ranked 18th in the world.

With this growth has come powerful and sometimes negative side effects. The Bay Area now ranks as the least affordable housing market in the nation, with only one in five households able to afford a median-priced home. A recent report by Redfin proved what many have long assumed - that Bay Area residents are most commonly looking towards Sacramento as their ticket out of their untenable situation.

These trends have not been without benefit for Sacramento. The city grew by 30,000 people over the past year, and the region’s economic growth doubled the national average over the same period of time. But, like the Bay Area, housing affordability has taken a resulting hit. Since 2000, median rent rose 14 percent locally, and more than half of residents here now spend more than a third of their yearly income on housing costs alone. The average American spends just 16 percent of their budget on housing.

Bay Area migrants alone aren’t to blame. We often imagine landlords as mom and pop outfits, using rental income to supplement a quaint retirement. But after the housing crash, a large-scale transfer of housing ownership from actual people to banks and investment firms occurred as underwater homes were sold off to the highest bidder. This moved much of our housing stock from the realm of personal investment to a commodity, in which far-off investors try to squeeze as much cash as they can out of the housing they own, without regards to the communities they’re affecting.

Yet as rents rise, real people feel the impact. Families must increasingly make a series of difficult decisions: what essential expenses, such as healthcare and food, must be cut as housing takes over the family budget? Would moving still allow working family members to keep their current jobs? Would children need to be pulled from their current schools due to a move? What about nearby neighbors and friends that families have come to trust and rely on? Could these relationships be maintained?

Sometimes, families don’t have the time to consider such questions - landlords simply evict these families to make room for higher income tenants. The effects can be devastating. According to a recent Harvard University study, evictions can lead to impacts like depression, poorer health and higher levels of stress that can last for years.

As people move away due to evictions or economic despair, the ripple effect on community stability becomes massive. Residents with a network of relationships built through their jobs, children and friends must rip themselves away from the fabric of their neighborhoods, replaced by those unfamiliar to the area. This trend disproportionately impacts women of color, the demographic that pays the greatest share of their income towards housing in Sacramento.

For those that love the Sacramento region for its identity and culture, watching it transform from a place of community stability to chaos seems painful and unnecessary. For those that love the residents of Sacramento, watching them endure severe economic hardship and growing health risks due to housing costs also seems painful and unnecessary.

We possess the methods to prevent such transformation. One of those methods is rent control, and in our next article, we’ll take a closer look at exactly what it is.

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