The nation’s hottest housing market? Surprise — it’s Fresno
FRESNO — After five years of planning and months of construction delays, first-time developer Vincent Ricchiuti was ready to open his luxury apartment complex. Then came the pandemic.
“We thought it was the worst time you could imagine,” Ricchiuti said about the grand opening in spring 2020.
Turns out he didn’t need to worry. His project, the Row, was opening in the nation’s hottest housing market: Fresno.
Within months, Ricchiuti had rented all 255 of the Row’s apartments and townhomes, even though its one-bedrooms go for as much as $2,600 a month — a price rivaling those in Los Angeles beach communities.
“We opened, and all of a sudden, here came the masses,” he said.
Over the last four years, no large U.S. city has seen greater increases in rent than Fresno. California’s fifth-biggest city, it’s an agricultural powerhouse on the doorstep of Yosemite National Park but often is thought of as a highway rest stop midway between Los Angeles and the Bay Area. Because of its pollution and poverty, Fresno makes regular appearances on lists of America’s worst places to live.
Yet since 2017, average rent for homes in Fresno is up nearly 39% to $1,289 a month, according to real estate firm Apartment List. That includes a 12% increase during the pandemic, the opposite of what has occurred in Los Angeles, San Jose and San Francisco, where rents have plummeted.
While Fresno’s costs have soared, they’re still low enough to provide a respite for people moving from pricier locales. But they have become a crushing burden to the region’s tens of thousands of lowincome families.
Even though the Central Valley is one of the country’s most agriculturally rich areas, it’s one of California’s poorest. Fresno’s median household income is $58,000 — nearly 30% below the state average.
Many blue-collar and service workers and farmworkers who lost their jobs amid the pandemic are facing possible eviction and feel trapped in substandard homes because higher costs elsewhere make it impossible for them to leave.
“I don’t know if I’ll have next month’s rent. I’m just trying to pay all the other bills,” said Denise Sandoval, 55, who hasn’t worked in a year and pays $725 a month for a two-bedroom apartment in northeast Fresno. “The management here, they know that I’m not employed. I’m just so scared to get behind.”
The reasons behind the increase in rent in Fresno are complex.
Unlike San Francisco — where the dramatic drop in rent is explained by the tens of thousands of people who left the city during the pandemic for more affordable and less crowded places — Fresno’s prices continued to swell even though more people left the city in 2020 than moved in, according to change-ofaddress information from the United States Postal Service and credit reporting data analyzed by the nonprofit California Policy Lab.
Local politicians and housing advocates say the situation is the result of gaps and failures in the city’s housing market that have built up over decades and have yet to be reformed after the mortgage foreclosure crisis nearly 15 years ago.
Construction of homes in Fresno nearly screeched to a halt after the Great Recession and remains stalled, even though, before the pandemic, the region was growing faster than others in the state, fueled in part by a booming healthcare sector. The average home value in Fresno is now nearly $300,000, according to real estate firm Zillow, having risen almost as fast as rents over the last four years.
The result is that rental housing for tenants at all income levels is in extremely short supply, with available apartments at record lows, according to data from real estate firm CoStar. And the ability to charge higher rents has increased speculation from investors looking to squeeze returns from newly purchased older properties.
For as long as she can remember, former Mayor Ashley Swearengin said, Fresno’s political leaders had been lulled into believing that as long as a small cadre of developers was building single-familyhome subdivisions on the city’s fringes, the housing situation was fine.
“We had been engaged in this ‘cotton candy’ kind of economy, that swinging a hammer and building on our periphery was meeting our needs,” said Swearengin, who is now president and chief executive of the Central Valley Community Foundation. “The Great Recession was a wake-up call that it wasn’t. It was glaringly obvious that we were bringing the wrong tools to this issue, and we needed to change.”