If you’re a current or new renter in the Sacramento area, you probably already realize that rents have increased substantially over the last year. The median rent for a one-bedroom apartment has gone up by almost 10 percent year-over-year. You’ll need to pay approximately $1,600 a month in rent for a one-bedroom apartment and $1,950 for a two-bedroom, according to the most recent rental data.
What you might not realize, however, is what this means when calculating how much you would have to earn to afford rent in Sacramento. A recent study by the National Low Income Housing Coalition (NLIHC) does the math for you. The NLIHC housing report crunches the data nationwide to determine a “housing wage” by state and metro regions in the U.S.
A housing wage refers to how much a person would need to earn each hour without spending more than 30 percent of household income on rent. Spending more than 30 percent on rent puts you at risk of not having enough money left for other basic living expenses, such as food and utilities.
How much you need to earn to afford rent in Sacramento
The Out of Reach report reveals that in Sacramento you would need to earn $23.62 an hour just to afford the rent on a modest one-bedroom apartment. Looking to rent a larger home? According to the report, you would then need to earn $29.67 an hour for a two-bedroom or $42.15 an hour for a three-bedroom home.
This puts housing out of reach for many renters on a fixed income or earning the minimum wage in California of $15 an hour. The report calculates that minimum wage workers in Sacramento would need to work 63 hours each week just to afford the rent on a modest one-bedroom home.
Why are rents so high in Sacramento?
Certainly, supply and demand is a key factor in why rents are so high. There simply isn’t enough housing available to meet the increased demands on the rental market. In California, there would need to be an additional one million new homes built just to meet the needs of the people with the lowest incomes.
California building codes, government regulations, and pushback from local groups that oppose construction in their neighborhoods have also added to the cost and challenges builders face when trying to develop affordable housing.
Also driving up prices are the influx of people moving to Sacramento from more expensive areas of California. Some prospective homebuyers from San Francisco (where the median home price tops $1.6 million) have opted to relocate to less-expensive Sacramento. This not only drives up the prices of homes in the area, but it also increases rents as more people compete for the limited amount of housing.
Have you been affected by rent inflation in Sacramento?
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