STOCKTON (CBS Sacramento) — The price of housing is going up everywhere but people in Stockton are being hit especially hard.
This Central Valley city of over 300,000, 65 miles east of San Francisco as the crow flies, has seen the second-highest increase in rent rates in the U.S. according to Apartment Guide.
The average rent in Stockton is $1,200. In Sacramento, it’s $1,400. That’s a far cry from the $3,700 in San Francisco. But it’s also one reason why rents are on the rise. More people in San Joaquin County are becoming super-commuters to the Bay Area.
Jadin Sharma, age 20, can barely afford his $1,175-per-month rent.
“My rent is more than one paycheck — it’s ridiculous. That’s the price of living in California,” Sharma says.
Some tenants say that, at the end of their lease, they’ll see another rent increase.
“It could be between $50 to $100,” Sharma said.
Sharma lives at Torcello apartments in Stockton. Rents in the city have seen a 25 percent increase in the past year
To understand such a rapid rise in rents, real estate broker Michael Blower says you have to take a look back.
“Stockton was at the epicenter of the whole foreclosure crisis. Our values just plummeted during that time so we really had a big hole to climb out of,” Blower said.
With so much inventory, investors scooped up properties and rented them out and rents were low. The market has changed significantly and the number of homes for sale in Stockton is down 33 percent from this time last year.
“So again, simple supply and demand. That will drive up the cost of rent,” Blower said.
Blower says the rent cap and skyrocketing building costs are discouraging landlords.
For example, the Torcello apartments, where Sharma lives, were built in 2003 at a cost of $25 million. That’s $83,000 per unit. Sixteen years later, the same developer is building Stonebrier apartments. The cost is $36 million or $232,000 a unit, a 277 percent increase.
Blower thinks lawmakers need to find ways to make building more affordable.
“When the legislature passes things that are going to help people, they should look at the big picture. Decreasing the amount of housing available for people isn’t helping,” Blower said.