It’s about more than high rent. Welcome to the post-Great Recession housing crisis

Cat Karell said she owned a home until an injury forced her to stop working and she briefly became homeless.

“It’s an experience that stays with you,” said the 74-year-old Sacramento resident.

Now she rents an apartment and wants Sacramento City Council to place what activists call “Real Rent Control” on the ballot.

“Let the voters decide,” she said at a rally outside City Hall last month.

Sacramento voters probably won’t get to decide this one. That’s because City Council brokered a compromise with the ballot measure’s original proponents. The deal caps rent increases for properties built before 1995 to between six and 10 percent and restricts no-fault evictions for tenants who have lived in their units a year or longer.

As part of the compromise, the three people who submitted the measure agreed to pull it. At the time, state law didn’t allow localities to remove charter amendment ballot measures, but subsequent legislation made it possible.

Then one of the three, Michelle Pariset, changed her mind and refused to sign paperwork to remove the proposition. Some activists say that means they still get to vote on it in November. The measure would go further than the compromise or a similar state rent cap. It limits increases to five percent, creates an elected rent board and restricts no-fault evictions for tenants regardless of length of residency.

Putting it on the ballot would violate a deal already in effect and benefiting renters. But activists supporting the measure have a point. Aside from Pariset, they weren’t in negotiations with city officials. They say the 44,000 or so who signed the petition to qualify the measure deserve a vote. (SEIU 1000, the union that funded most of the signature-gathering, agreed to drop the measure.)

If the measure goes forward, activists could lose the campaign after getting outspent three to one by landlord and developer groups. That’s what happened with Proposition 10, a statewide rent control measure that failed in 2018. Such a loss is what the compromise helps avoid.

But what other option do desperate renters have if they feel the compromise won’t protect them? Roll over and say, “Thank you, City Council, for doing whatever you feel is politically safe?”

Before you judge tenants too harshly, consider what it’s like to rent these days.

Different world

We live in the post-subprime mortgage crisis, post-Great Recession, post-record student loan debt world.

Nationwide, millions who lost their homes during the crisis will never become homeowners again. Even after the crisis, the comparatively privileged can’t afford to build equity. College-educated millennials, shouldering historically high student loan debt, aren’t buying homes.

The proportion of black households in Sacramento that own homes dropped from 43 percent in 2006 to 27 percent in 2015, according to Sacramento Bee journalist Phillip Reese’s analysis.

Before the housing bubble burst, we talked about whether low-income people could afford to buy or rent. Now we talk about whether people can afford rent, or, if not, find a safe place to sleep in their car.

People involved in housing 15 years ago say they didn’t even talk about rent control back then.

Fast forward to today, and more people rent. A Sacramento Area Council of Government analysis of Census data found that 52.8 percent of Sacramento city households owned their homes in 2005. That dipped to 45.2 percent in 2014, and as of 2017 was 48.6 percent.

We don’t build new housing at the rate we used to. When we have built housing in recent years, very little has been affordable for low-income residents.

Into this situation has come an influx of people fleeing the increasingly feudal economy of the Bay Area. Partly because of that, Sacramento metropolitan area rents are up 45 percent compared to seven years ago.

Typical rent for a unit in 2012 was $1,057 in today’s dollars, according to a prior Bee analysis using data from real estate listing firm Zillow.com. As of 2019, the average mid-range rent was $1,535.

In the last two years, the number of homeless people in Sacramento County rose 19 percent to at least 5,570 – mostly long-term local residents, mostly in the city of Sacramento.

Renter power

Rent control is a Band-Aid. Some researchers say it prevents displacement. Economists warn it can drive up rents in the long run.

But this fight over “Real Rent Control” is also about the political power of tenants.

Renters comprise about a third of likely voters in Sacramento County and statewide, according to Dean Bonner, associate survey director at the Public Policy Institute of California.

Could that change? Renting – and, increasingly, homelessness – are together more common in Sacramento than homeownership.

“I understand people’s frustrations overall with the situation, and it’s our job to be responsive,” Mayor Darrell Steinberg said in an interview. “But I believe we are being responsive.”

Local leaders may feel they’re listening to constituents, but their efforts today come after failed policies made life harder for many. Those living in tents, or close to it, want stronger efforts to counteract the radical economic changes of the last couple of decades.

Activists agitating for stricter rent control may not represent what politicians consider “mainstream,” but they represent a growing number of people with similar frustrations – and they are a rising political force.

This story was originally published January 2, 2020 at 5:00 AM with the headline "It’s about more than high rent. Welcome to the post-Great Recession housing crisis."