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The nation’s hottest housing market? Surprise -- it’s Fresno

Liam Dillon, Los Angeles Times on

Published in Home and Consumer News

“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-of-address 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-family-home 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.”

The Row is one version of that change.

Ricchiuti’s family — longtime farmers in the region, with olive groves and almond trees — used to sell their agricultural holdings to builders of single-family homes. But Ricchiuti, 37, partnered with another family of farmers to develop the Row themselves on their land in Fresno’s affluent northern area. He hired market researchers, who said that residents — including aging baby boomers looking to downsize, young families waiting for new homes to be built and young, single professionals — were aching for high-end apartments.

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