California rent ‘bargains’ are disappearing. Which ones are left?

“How expensive?” tracks measurements of California’s totally unaffordable housing market.

The pain: Tenants will find dwindling cost advantages when choosing California’s cheapest places to rent compared with the state’s priciest spots.

The source: My trusty spreadsheet reviewed Apartment List’s rent data between January 2017 and March 2024. It’s an interesting metric because it’s a mix of Census Bureau figures and results from the company’s own rental listings for 47 states, the District of Columbia, and 583 US cities – including 82 in California. (Yes, no Alaska, Maine or Vermont).

The pinch

My spreadsheet created a rent “bargain” yardstick by splitting the 82 California cities into two groups.

For high-priced rents, we looked at what stat geeks call the “75th percentile” – the middle price of the 41 cities ranking in the upper half of rents statewide. That cost was compared with low-rent districts: the “25th percentile” – which is the middle rent for the cheapest 41 cities. (FYI: The often-used median is the 50th percentile.)

Back in 2017, there were 36% in rent savings between these measurements of California’s costliest and most inexpensive markets. That was $2,471 monthly rent in the upper half vs. $1,589 at the lower end. Or $882 potential savings each month between renting in a typical pricey California city vs. an “affordable” town.

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Next, we looked at today’s conditions – data for the 12 months ended in March 2024. The housing discount for renting in the Golden State’s less-costly communities fell to 22%. That was $2,748 in the most-expensive cities vs. $2,144 in cheaper ones. Or $604 monthly.

Or ponder the shrinking savings this way: Rents in California’s costliest half grew just 11% since 2017. But there was a 35% surge in the more “affordable” locales.

Why the narrowing gap? You can blame a population push away from the biggest metropolitan areas, mostly near the ocean, and toward lower-cost communities that are primarily inland. That’s the byproduct of remote workers departing job hubs and folks seeking cheaper housing.

Pressure points

Sadly, rent “bargains” in California – relatively speaking – are disappearing.

Think about California’s 10 “most affordable” communities and the hefty rent hikes found since 2017 …

Fresno: $1,327 average rent in the 12 months ended in March – up 42% vs. the 2017 average.

Victorville: $1,641 – no change data available.

Citrus Heights: $1,659 – up 38% since 2017.

Sacramento: $1,667 – up 30% since 2017.

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Santa Maria: $1,761 – up 52% since 2017.

Long Beach: $1,769 – up 19% since 2017.

Riverside: $1,810 – up 48% since 2017.

Pomona: $1,865 – up 31% since 2017.

Santa Rosa: $1,903 – up 18% since 2017.

Moreno Valley: $1,906 – up 48% since 2017.

Contrast those surges to what’s occurred in the state’s 10 costliest places to rent …

Calabasas: $3,302 a month – up 27% since 2017.

Newport Beach: $3,259 – up 27% since 2017.

Lake Forest: $3,169 – up 42% since 2017.

San Mateo: $3,137 – up 6% since 2017.

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Dublin: $3,131 – up 6% since 2017.

Emeryville: $3,032 – off 4% since 2017.

Sunnyvale: $3,019 – up 7% since 2017.

Irvine: $2,983 – up 29% since 2017.

Redwood City: $2,980 – up 2% since 2017.

Santa Clara: $2,979 – up 16% since 2017.

Bottom line

California tenants also don’t fare well within the national picture.

The state’s $2,154 average rent in the 12 months ending in March was topped only by Hawaii’s $2,239. Rent nationwide ran $1,402 a month, by this math. That’s 35% cheaper.

But let me conclude with a dash of good news: California’s overall rents rose by 21% since 2017 vs. US rents that jumped 28% in the same period.

Only six places had smaller rent hikes since 2017 – DC at 5%, Louisiana at 11%, Minnesota at 14%, Iowa at 15%, Oregon at 16%, and North Dakota 17%.

Jonathan Lansner is the business columnist for the Southern California News Group. He can be reached at jlansner@scng.com

Source: Orange County Register