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Sacramento sees low eviction rate despite high rent, homeless crisis

A rental site estimates nearly four million Americans have experienced an eviction.

Eviction is an increasing issue impacting millions of Americans across the nation, according to a report published Thursday by Apartment List, a rental market company based in San Francisco.

However, despite the rising rent and increasing homeless population, Sacramento isn't seeing high rates of eviction. In fact, Apartment List found the city has one of the lowest eviction rates in the country's top 50 metro areas.

Over the past year, more than 80 percent of the 250 biggest cities in the U.S. saw rent growth, according to Rent Cafe Blog, a Yardi Matrix service.

Late last year, Sacramento made the top of the list of cities with fastest growing rent with a 10.5 percent increase, the highest year-over-year rent growth in the nation. It was also the only metro city to end with a double digit increase, more than double the 3.9 percent national average, according Yardi Matrix data.

As of September, Sacramento's rent growth has slightly slowed down, dropping to an 8.1 percent increase, but it still takes the number 10 spot in the list of cities with the fastest growing rent.

After quick growth over the past couple years, the national average rent has remained flat for the past four months. But, Apartment List report found, one in five renters are unable to pay to pay their rent in full for at least one of the past three months. The rental site estimates nearly four million Americans have experienced an eviction.

Surprisingly, coastal metros with expensive and fast-growing rents have the lowest eviction rates in the country. California cities, San Jose, San Francisco, San Diego and Los Angeles, respectively, take the top four spots in the cities with the lowest eviction rates, according to the Apartment List study.

The company estimates an eviction rate of 3.0 percent for the Sacramento metro, which is the number 21 lowest rate of the nation's top 50 metros. For perspective, the San Jose metro has a 1.2 percent eviction rate, the lowest in the country. Memphis is the metro with the highest at 6.1 percent.

But how does an expensive city see such low eviction rates?

It may seem contradictory that expensive metros have the lowest eviction rate. But, while the displacement of long-time renters and rent price hikes is controversial, expensive areas have the best job opportunities with high-paying salaries.

Sacramento is a hot destination for people looking to leave their metro city for a new one. Over the past couple years, the city has seen an influx of residents from tech industry metros such as the Bay Area and Seattle, looking to settle down in the Capitol City. Sacramento's booming culture and cheaper housing market, is attracting a flood of professionals with money to spend.

Last week, the city announced a bid for Amazon's second headquarters in an attempt to continue to push for further economic development by bringing start-ups and tech companies into the region.

When considering Sacramento's recent growth spurt and who many of the new residents are, the low eviction rate makes sense.

ABC10 reached out to Jim Lofgren, executive director of the Rental Housing Association of Sacramento Valley, to weigh in on the report's findings.

Lofgren explained via email, given the tight rental market, most property owners in Sacramento are getting multiple applications for vacancies. Owners are able to maintain high standards for screening applicants, resulting in less evictions. Yardi Matrix data forecasts the occupancy rate will remain in the 96 to 97 percent range over the next 10 years.

Tenants feel the pressure from the competitive rental market and may be more inclined to comply with the terms of their rental agreement, including paying rent on time, according to Lofgren.

Expensive cities, such as Seattle and San Francisco-- and now Sacramento, face issues with homelessness. How does this fit into low eviction rates?

Evictions are a leading cause of homelessness, according to the Apartment List report.

Since 2015, the homeless population in Sacramento has increased by 85 percent, according to Sacramento Steps Forward, the lead agency in the region working to end homelessness.

The agency attributes the spike in homelessness to factors such as housing issues and the disparity between what a low wage can afford for an apartment. Eviction rates for low-income residents are higher than the Sacramento rate, at 4.4 percent, according to Apartment List.

A hike in rent, such as recently seen in Sacramento, can highly impact a low-income resident's ability to pay rent. Sadly, the report found the most vulnerable members of society-- renters without a college degree, black households and poor households with children-- face the highest rates of eviction.

According to Harvard sociologist, Matthew Desmond, who won a Pulitzer Prize for his book, Evicted: Poverty and Profit in the American City, landlords see a high profit margin in inner city, low income neighborhoods.

Concrete eviction rates are difficult to calculate since the majority of evictions are done informally and not listed in court documents, said the Apartment List report. This is why finding a scientific correlation between eviction rates, high rent and homelessness is hard.

But one can speculate, when a city reaches certain levels of fast gentrification and booming rent prices, such as Seattle and the Bay Area, the low-income population suffers the most, contributing to the eviction rate and the homeless population.

Meanwhile, high-income salaries keep the rental market competitive and thriving. Sacramento can alleviate the tension by building more housing units, quickly, since the supply is too low for the demand.

It's possible, Sacramento's low eviction rates may simply be a reflection of growth the city is experiencing, following behind other leading cities in tech and innovation.

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