Article Correctness Is Author's Responsibility: California’s Poorest Big City Faces a Different Kind of Housing Crisis

FRESNO, CA—On a recent weekday morning in Fresno’s Addams neighborhood, 10 women gathered in the recreation room of a mobile home park. A local nonprofit had convened this meeting to assist the low-income community in this metropolis of one million in California’s San Joaquin Valley. Over the babble of toddlers playing in the back, attendees spoke in Spanish about various local needs: One person was concerned about a dangerous street crossing; others described a frustrating gap in trash pickup.

Then discussion turned to housing. “Who has heard of gentrification?” Grecia Elenes, a senior policy advocate at the Leadership Counsel for Justice and Accountability, asked in Spanish. No one raised a hand.

Elenes described the process by which wealthier and often whiter residents transform a neighborhood. Juliana Seguín, who lives with her husband and four children in a nearby three-bedroom apartment, piped up. Her month-to-month rent has climbed from $850 in 2017 to $1,550, as her complex has undergone renovations to attract a better-paid crowd, she said. Another renter in attendance, Patricia Lobato, chimed in: She had been recently forced to move, due to a giant rent hike.

At some point, said Segúin, her property manager explained that the prices were normal for the building’s new owner, who had previously lived in the Bay Area.

“I said, if this is the Bay Area, then bring us the beach,” said Seguín, whose name (along with Lobato’s) has been changed due to her status as an undocumented immigrant. “People don’t make that kind of money here.”

The number of home purchases for flips in Fresno has steadily risen in recent years. (Laura Bliss/CityLab)

The situation highlights an overlooked corner of California’s housing crisis. Almost 60 percent of renter households in Fresno County are considered “rent burdened,” meaning that they spent at least 30 percent of their earnings on housing; about 20 percent spend at least half of their income to keep a roof overhead. That burden is growing heavier: Between March 2018 and March 2019, the cost of the average apartment here soared 6.2 percent to $1,060 per month. According to a recent analysis by RentCafé, that jump was the second-highest among California’s ten largest cities, second only to Oakland, and among the highest in the U.S.

Stockton, Modesto, and other Central Valley cities fit a similar profile, said David Garcia, the policy director at U.C. Berkeley’s Terner Center for Housing Innovation. Compared to L.A. and San Francisco, where one-bedrooms are known to go for $4,000, these cities are dirt-cheap in nominal terms. But a confluence of factors is making shelter increasingly unattainable for people who live there. “Renters in these communities are oftentimes just as cost-burdened as those in high-cost areas—sometimes even more so, due to the disparity in incomes,” said Garcia.

Arguably, the sharp rise in housing costs is making Fresno less affordable for longtime residents than in the pricy coastal metros that loom so large in Golden State housing talk, especially when combined with the hefty cost of transportation around the spread-out region, said Garcia. Certainly, the city provides a stark portrait of how the definition of “affordable” can vary from block to block.

Arising from the sea of agriculture that is the San Joaquin Valley, Fresno often feels like a giant farm town. At least 20 percent of the workforce is in agriculture or work related to the grapes, cotton, cattle, in their midst. Manufacturing and transportation are also significant employers, and healthcare is a growing job sector. But there are no high-dollar tech headquarters, and no bright blue ocean hemming in developable land in this sprawling city. The median household income is less than $45,000 a year, and Fresno has long sat at or near the bottom of national poverty rankings.

A map of extreme housing burden of across U.S. counties. Fresno County is in the clump of dark red in central California. (David Montgomery/CityLab)

With average pay so low, a large portion of the population has struggled with housing costs for a long time. But now demand for single-family homes and apartment rentals is surging. Fresno’s economy is growing, especially with the recent opening of distribution centers from Amazon and Ulta, a beauty supplier. With new employers in town, “you have people who have been living at home with their parents or roommates that are able to move out and find their own place,” Greg Terzakis, the senior vice president of the California Apartment Association, told ABC News last year.

For seekers with a decent paycheck, as well some retirees and remote workers fleeing higher housing costs elsewhere, Fresno is a welcoming market. Sparkling subdivisions keep popping up on the county’s fringes. Within the city, some new infill construction is coming online. And an ample stock of early 20th-century bungalows has made house-flipping a wider phenomenon, especially on Fresno’s south and east sides. Countywide, the number of homes purchased for flips ticked up from 835 in 2014 to 1,317 in 2017.

Most of this activity is geared towards supplying middle- and upper-income levels, said Andres Jauregui, the director of the Gazarian Real Estate Center at Cal State Fresno. All told, prices are pressing upwards, and apartment vacancies are at a historic low. That leaves a scant selection of rentals for Fresnans who are just making ends meet.

“Most jobs here have income levels that most commonly do not allow people to afford a property, so they go the route of a rental,” Jauregui said. “But at the same time, when you have rentals that are increasing in price, it’s getting harder to find a place that they can afford.”

And while the local economy has improved modestly since the end of the 2008 crash, the gap between rich and poor in Fresno has widened in that time. More concentrated poverty exists here than nearly anywhere else in the United States. “A lot of people here are living month-to-month,” said Jauregui.

These trends are taking a toll. In the city of Fresno, the number of unsheltered homeless people rose by 23 percent from last year, according to a recent count. And there is growing concern about urban displacement. Tracking residents who’ve been forced out by rising housing costs is notoriously difficult, since people move for all kinds of reasons. But a recent report by the city did find that the mismatch in growth between income and rental prices in the revitalizing downtown area puts current residents at risk. “We want to be proactive to make sure people can stay in place to enjoy the benefits,” said Elenes. Her group, the Leadership Counsel for Justice and Accountability, is part of a city-backed anti-displacement task force that is forming policy recommendations to help low-income renters remain at home.

A man awaits the bus in Fresno with a shopping cart in tow. (Laura Bliss/CityLab)

Some locals are startled to learn that Fresno is becoming a harder place for others to afford. Kelly Jennings, a 33-year-old retirement services professional, has lived in L.A. and San Luis Obispo; last January, she returned to her native Fresno because it was the only place in California where she could conceive of buying a home. She and her boyfriend recently paid $325,000 for a four-bedroom home in the artsy Tower District near downtown. “Having experienced other parts of the state, I can tell you that this is still a very affordable place,” Jennings said.

Fresno’s bargain status manifests in other ways besides housing, she noted—apartments are more spacious; a cup of fancy coffee or a yoga class require fewer dollars than they would 200 miles away. Still, Jennings feels that the job market is moving too slow. “I can see that if housing continues to increase beyond the average salary, it could become less affordable,” she said. “But I’m not sure we’ve gotten to that point yet.”

For some residents, though, that point is here. After a breakup this past spring, Jeri Alibrando found herself searching for an apartment in Fresno for the first time in years. The 39-year-old hoped to find a one-bedroom to share with her 12-year-old son for less than $600 per month. Three years ago, this would not have been an unreasonable expectation. Instead, Alibrando and her son have been sharing a series of single bedrooms in other peoples’ houses.

Jeri Alibrando, born and raised in Fresno, is struggling to find adequate housing for her and her son. (Laura Bliss/CityLab)

Alibrando works as a caregiver, earning just over minimum wage in piecemeal shifts. She’s never thought of herself as poor. But now she is bewildered by the gap between what she’s making and what others seem to be able afford in her hometown.

“You drive around, seeing these signs advertising houses in the ‘low 300s,’” said Alibrando, wearing Wonder Woman-print scrubs on a block of tract homes near her residence in the city’s northeast corner. “Who can afford that?”

Now, hers is one of more than 40,000 households on the waitlist for subsidized housing in Fresno County. There are tens of thousands more families who would qualify for such assistance, said Preston Prince, CEO and executive director of the Fresno Housing Authority, which develops affordable housing and issues government vouchers. Across the state, advocates have called for increased production of units priced below market rates. In Fresno, a few new developments have come online in recent years. But with building costs rising and federal funding in decline, financing new supply is a challenge.

“Our cost to construct housing is 90 percent of what you see in the Bay, yet rents are one-third their level,” said Prince. “What developers make up in debt, our developments can’t sustain.”

This fall, California lawmakers passed a raft of bills that could make life a little easier for renters up and down the state. That includes a statewide rent control regulation, which caps rent hikes on older dwellings at 5 percent plus inflation. This could help stem the loss of affordable units, said Ashley Werner, a senior attorney at Leadership Counsel who works on housing affordability. Another bill, SB 329, is aimed at stopping discrimination against housing choice vouchers and subsidized rental payments. Werner said that this is becoming more of an issue in the Fresno area with a tighter market. And Governor Gavin Newsom boosted next year’s state budget with a fresh $2 billion for building housing and combating homelessness.

But immigrants who lack U.S. citizenship are not generally entitled to public assistance. Much of Fresno’s low-wage labor force, especially those working in agriculture, face this additional housing challenge. According to a 2014 estimate, 38 percent of the region’s immigrant population is undocumented.

From Alibrando’s perspective, a healthier local economy just seems to be pushing prices up, rather than putting more money in her pocket.

“It’s nice that these people all have jobs, but most of us can’t afford a place to live,” she said. “Not unless you’ve got it. Most people who live in Fresno, they don’t.”