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Biggest affordable housing project in Elk Grove is still just a 'dent' in housing crisis

The last affordable housing project in Elk Grove had 28,000 unique applicants all searching for an affordable place to live - up from 1,400 applicants 2 years ago.
Credit: City of Elk Grove
A rendering of the nearly 400-unit Poppy Grove affordable apartment project in Elk Grove.

ELK GROVE, Calif. — Facing overwhelming demand for affordable housing, the Elk Grove City Council recently approved the biggest affordable housing project in city history. 

But its far from being the silver bullet that'll solve the housing crisis.

At 387 units, city officials say the Poppy Grove apartments puts a "meaningful dent" in their housing needs. Sarah Bontrager, housing and public services manager for Elk Grove, said the city needs more than 4,000 affordable units by 2028, a standard set by the state. While the project is far from being the sole answer, it's a welcome sight.

"This is a meaningful dent in that, and it will provide housing for hundreds of households that are probably overpaying for rent right now or who are currently homeless,” Bontrager said.

While rents won't be set until the complex is constructed, estimates would be in the range of roughly $700 up to $1,800 for a two-bedroom apartment if based on current affordability. 

“The rents are set at different income levels so that someone who's extremely-low income would pay at the lower end of that range, and someone who's closer to the median income, who might be earning 80% of the median income, would pay at the higher end of that range,” Bontrager said.

The complex comes with a pool, playgrounds, a bocce ball court, outdoor spaces, community rooms, bike racks and parking, as well. Speaking with 30 years of real estate experience, April Cooke says the projects looks like it'll be a welcome addition to the area.

"It is going to be a pretty nice complex," Cooke said. "And it's going to integrate the trails into the Elk Grove trail system, which is going to be nice, and it's going to have some outdoor facilities, some yards for kids... and swimming pools (and) some inside facilities."

She added that the selection of apartments also translates to good news for a housing-hungry demographic in the area.

“That's going to be great for families, one of the biggest groups of people renting apartments are between the ages of 18 and 34, so it's a huge demographic and finding affordable housing is critical,” Cooke said.

According to Bontrager, recent affordable apartment projects generated a lot of attention and applicants. Two years ago, a roughly 90-unit apartment complex had 1,400 applicants. However, the most recent project in 2021, a similar size effort, had 28,000 unique applicants.

"This one really, really did show how much more challenging this situation had gotten, even in just a couple of years,” Bontrager said.

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There's a number of factors that went into that applicant number, including some intense marketing from Elk Grove to find applicants, but there's other factors at play, some even extending back to 2009. 

Generally, Bontrager said there wasn't a lot of new homes being built between 2009 to 2014 during the recession and some families had also doubled up in homes.

"Coming out of it, we saw households split - meaning new households formed, putting more pressure on the market, but it was a market that hadn’t built many new homes during the recession," Bontrager said.

In addition, people who stayed at home during the pandemic stopped the usual turnover the city would usually see. Whereas a normal affordable housing vacancy rate is 5%, Elk Grove is seeing about 1%, according to Bontrager. It's similar in market rate housing, as well.

Cooke said she's seen home values go up 14% to 20% every year for the last two or three years.

“We look at a little house on a street that, a few years ago was selling for a couple hundred thousand, is now selling for $400,000 or more. It boggles the mind when you see the prices on some of the housing,” Cooke said.

She said what the city is currently seeing the top of the market, and it's not clear just how long it'll stay there or how long it'll keep climbing. There's also not much good news for apartments when it comes to affordability.

“Apartments can cost more and be more difficult to rent than to buy a house. It's funny to say that, but it's true. It could cost more to rent an apartment than to buy a house,” Cooke said.

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It begs the question as to why these prices have gone up so high. Rent from just five years ago aren't the same range of rent Elk Grove is seeing now. Bongtrager said the market rate apartments are around $2,400 to 2,800 a month, and the reason is an all too familiar one, supply and demand.

The city doesn't have the supply to keep up with demand, as evidenced by the 28,000 applicants for the most recent affordable housing project. Rentals of single-family homes are also being sold, meaning tenants exit into a market with very low vacancy rates, lots of demand and high costs.

For now, the Poppy Grove is a welcome addition to a city, like many others, facing an affordable housing crisis. Elk Grove has more than 1,000 affordable housing unit projects in their pipeline, but its not clear how many of those will cross the finish line.

However, even though the Poppy Grove apartments are still a ways from being constructed, Cooke can already predict the result.

“It's going to take a while to get built at this point, but the applicants that will be applying will far, far exceed what's available. It'll get rented out fairly quick,” Cooke said.

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