STOCKTON, Calif. — California has undoubtedly become more expensive over the years, however some of the increases the Golden State saw this decade are nearly double what people saw nationally.
In a RentCafe study, Sacramento came only a few points shy of doubling the national average of 36%. In the San Joaquin Valley, both Modesto and Stockton also saw substantial jumps.
The study says rent increased in Sacramento by a whopping $587 (69%), $400 in Stockton (54%), and $487 in Modesto (61%) over the decade.
- National – 36%
- Sacramento – 69%
- Modesto – 61%
- Stockton – 54%
In a finer breakdown, weekly wages only went up about 21.2% on average over the same period in the San Joaquin Valley, according to Dr. Gökçe Soydemir, Foster Farms Endowed Chair of Business Economics at Stanislaus State University.
“This means the rise in rental rates over the same interval was more (than) three-fold in some areas compared to these numbers,” said Soydemir.
He explained that the increase comes as no surprise. California simply can’t expand westward, and, as a result, people on the coast are turning inland.
That means they’re heading to areas like Tracy, Stockton, Modesto, and sometimes out of the state entirely.
A recent population report from the California Department of Finance shows that inland counties like San Joaquin County had high population growth rates, a trend since 2016. Meanwhile, Stanislaus also saw a bump increase of .68%.
The report also shows that most urban coastal areas gained population at a “very slow pace” while others lost population.
While areas like Tracy have set groundwork for a 5,000 home development, places like Stockton and Modesto have inventory shortages.
“That’s driving up demand here, where there’s already an inventory shortage. It’s putting added pressure on rental rates (and) home prices…,” said Soydemir.
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Soydemir and Stanislaus State University have tracked building permits for areas in the San Joaquin Valley, Modesto, and the Stockton-Lodi area for years.
Modesto averaged hundreds of single-unit building permits each month from 2004 to 2008, but those numbers gradually sank. The data shows only 50 single unit building permits were issued in Modesto for 2018.
The Stockton-Lodi area fared far better, but they were still behind the number of permits they issued in the past.
Full building permit data for these areas is available HERE.
Soydemir says part of the decrease in building has to do with the Great Recession, but, there are also bottleneck issues, like the cost of a permit and the how long it takes to get one.
“Those are the things that the city officials have to address if they want to help alleviate this problem," said Soydemir. "They should think about these roadblocks that are preventing homes from being built.”
The rising cost of housing is among the main reasons Californians have left the Golden State by the thousands. According to the state population report, the state saw more people leave than move in for the first time since the 2010 Census.
Habits have also been changing. The number of millennials who plan on renting forever continues to grow, in part because they can’t afford a down payment on a home.
“In the past, people were buying single unit homes and wanting to settle in homes," Soydemir said. "That’s changing over time. People are choosing smaller spaces like apartments over single unit homes.”
A breakdown of the Modesto, Stockton, and Sacramento statistics is available below.
- 2010 Rent: $852
- 2019 Rent: $1,439
- Percentage: 69%
- Household income change: 43%
- 2010 Rent: $741
- 2019 Rent: $1,141
- Percentage: 54%
- Household income change: 18%
- 2010 Rent: $785
- 2019 Rent: $1,264
- Percentage: 61%
- Household income change: 27%