One million California renters are behind on their rent payments, and almost 150,00 of them believe that it is very or somewhat likely they will face eviction in the next two months, according to recent Census Bureau surveys. As concerning as these numbers are, they are an improvement from the height of the pandemic, when 1.5 million California renters were behind on rent. Still, rents are increasing across the state, and housing stress is hitting some demographic groups and regions harder than others.
For many, catching up on rent won’t be easy. The majority (60%) of those behind on rent are at least two months in arrears, and one-third are three or more months behind. Economically vulnerable renters are most at risk. Those who have experienced recent declines in wages are almost twice as likely than others to be behind in rent, and low-income households (less than $35,000 per year) are five times as likely as high-income households (greater than $100,000 per year) to be behind. Renters with a high school diploma or less are more than twice as likely (15%) as college graduates (7%) to be behind.
Before the pandemic, California renters already faced the most expensive rental markets in the nation. In 2022, 30% of California’s renters paid more than half their income on housing, compared to 26% in the rest of the nation, according to the American Community Survey. Four of the five most expensive metropolitan rental markets nationwide are in California (New York City being the lone exception, according to Zillow). Rents in San Jose, San Francisco, San Diego, and Los Angeles remain high, while inland regions of the state have seen the highest percent gains in rents.
Sharp increases in California’s least expensive rental markets are of particular concern, as renters in those markets tend to have lower incomes than those in the state’s more expensive coastal areas. Housing stress is typically more severe in the San Joaquin Valley and Sacramento Metro regions than in the Bay Area, despite lower rents. Likewise, as rents have climbed, the share of renting households spending more than half their income on rent has increased in the interior of the state. Los Angeles and San Diego also have elevated levels of stress by this definition.
Renters who are financially stressed are much more likely to be concerned about eviction. California’s statewide pandemic-related moratorium on most types of evictions ended in June 2022. Since then eviction filings have increased to around 10,000 per month, up from a few thousand or less during the moratorium. These trends are of special concern because eviction filings are associated with homelessness. These signs of housing stress point to a California housing market in crisis.