By Lucas McMaster and Lauren Reagan

The cost of rent in Sacramento has made living unsustainable for many residents, the latest census data show. The Sacramento region saw its first year-over-year decline in rental rates in more than a decade in 2023, according to Collier International’s 2023 Sacramento Multifamily Market Report. But a large number of residents are still spending more than half of their income on rent.

In 2022, the median rent for a two-bedroom apartment in Sacramento was $1,688, an increase of more than $400 per month – after adjusting for inflation – from just seven years earlier, in 2015, according to the U.S. Census Bureau.

Despite this year’s dip, rents in the region are up due to the combination of high interest rates and low vacancy rates, said Bob Shanahan, research director for Colliers International.

This reflects a nationwide trend where on average apartments across the country are slightly cheaper now than they were one year ago, but are still more expensive than they were just three years ago.

Recent data from the census also shows an increased number of tenants paid a larger percentage of their gross income toward rent in 2022. Roughly 30% of Sacramento renters spent half of their wages on rent, and nearly 50% of renters spent more than 35% of their gross income on housing. 

‘Virtually impossible’ to afford rent

Andres Alvarado, 22, a Sacramento renter, said, “I’m able to pay for (rent), but it kind of slows down my financial goals like saving and investing into future things.” 

About 40% of Alvarado’s paycheck goes towards rent, he said, which doesn’t leave him much room to put money aside to save. 

Renters like Alvarado also find it difficult to rent on their own.

“If you’re trying to live here by yourself, it’s virtually impossible,” stressed Alvarado, who currently lives with 3 other roommates in order to make renting possible. 

Alvarado pays $725, for his four-bedroom apartment, and splits the $3,000 rent among a trio of others.

“I think all of us didn’t expect to live with each other,” he admitted, “but I think we all kinda accepted that it has to be this way.”

The city of Sacramento is currently holding mayoral elections, which has renters wondering what changes the city will make for renters to be able to live comfortably.

Tenant Protection Program falls short

In response to an unprecedented rise in rental cost, the city of Sacramento adopted the Tenant Protection and Relief Act in 2019 to establish limits on annual rent increases and protections against unwarranted lease termination. Evaluated annually, the current maximum annual rate increase is 9.2%, as of July 1st.

Those living in unincorporated Sacramento County have no such protections.

According to the city’s website, “rental rates cannot be increased more than once every 12 months and applies to all tenants regardless of how long they have resided in the unit.”

Tamie Dramer, executive director for Organize Sacramento, said that the city’s Tenant Protection Program has had limited success due to the lack of funding and because “most people don’t even know it exists.”

“You can create all the programs in the world, but if you don’t fund them, and you don’t staff them adequately, they can be meaningless,” Dramer argued.

Arselia Morris, a renter in Sacramento, said leaders need to do more to help.

“I feel like there should definitely be more programs to help first time renters, just like how there’s first time homebuyer perks,” Morris said. “There should also be a first-time renter perks, or even like programs to help people who are looking for a more affordable place just to have that type of assistance in the future.”

According to RentCafe, Sacramento’s rent is above the national rent average.

Sacramento rent still up ‘dramatically’

Even though average rent is down by 2% this year, rents in the area are still up by about 20-30%, after a historic cost-of-living increase between 2018 to 2022, said Bob Shanahan, who noticed the numbers in his work for Colliers International.

“Rents are still up dramatically,” Shanahan attested. “The fact that they’re down a little bit this year is probably a temporary dip due to rising supply and slowing demand.”

In fact, construction activity is at a record high for the area, with more than 6,000 new units under construction, Shanahan said. For context, the last peak in construction occurred in 2004 with about 3,000 units under construction.

Many of the new units are priced too high for the average renter in Sacramento, according to Shanahan. 

The average cost of a new 1-bedroom unit downtown – an area with the highest rate of new construction – is about $2,200 per month, Shanahan pointed out.

Bob Erlenbusch, executive director of the Sacramento Regional Coalition to End Homelessness, said that the issue is not necessarily tied to a lack of available housing, but rather a lack of affordable housing.

“We have one of the highest costs of housing in the country,” Erlenbusch explained. “I think for someone making lower wages or considered low income, it’s not very affordable at all.” 

‘On the edge of becoming homeless’

Michael Million said he searched hard for months to find an affordable apartment but had to go into debt to keep it. 

Million, 32, moved to East Sacramento from Santa Barbara in January, but started viewing apartments three months earlier. He now pays $1,200 for a small, one-bedroom apartment that he calls “a diamond in the rough.” As a full-time student at Sacramento State, Million has had trouble finding employment and currently relies on student loans and scholarships to pay his bills.

“I looked at my budget and I know that if I do everything right, and nothing crazy happens, then I’ll be safe until next semester,” he said. “With that being said, my wiggle room is like $100 to $200.”

Over the past few years, Sacramento has experienced an unprecedented rise in people experiencing homelessness. Erlenbusch said that there cannot be a solution until the city and county of Sacramento “find a source of funding that’s to scale for affordable housing.”

“For thousands of residents, all it takes is the loss of income or a health care crisis,” Erlenbusch warned, and you’re right on the edge of becoming homeless.”