Affordable Housing in Sacramento

Sacramento’s affordable housing situation sits at an inflection point. The region has absorbed significant population growth over the past decade — driven by migration from the Bay Area and, more recently, from Southern California — without a proportionate increase in housing supply. The result is a rental market that was historically affordable by California standards but has tightened significantly, with median rents for two-bedroom units in Sacramento reaching $1,800–$2,100 in 2026, up from roughly $1,200 in 2019.

The rental properties most likely to remain affordable are owned by independent landlords — those with one to ten units who have owned their properties for years or decades and have not reset rents to current market levels at every opportunity. These landlords are the informal backbone of Sacramento’s affordable housing stock. When they sell, affordability ends.

The Sacramento Rental Market in 2026

Sacramento County’s housing market reflects several pressures that directly affect affordability:

Supply constraints: Sacramento’s development pipeline has been constrained by labor costs, materials inflation, and entitlement timelines. New market-rate construction in 2024–2025 added less than 5,000 units to the county’s stock against a population that requires roughly 10,000 new units annually to maintain vacancy equilibrium.

Migration from higher-cost metros: Remote work has made Sacramento attractive to Bay Area workers, who bring Bay Area incomes and purchasing power. This has accelerated rent increases in previously affordable neighborhoods like Oak Park, Del Paso Heights, and South Sacramento.

Vacancy rates: Sacramento’s apartment vacancy rate has hovered around 4–5% through 2025–2026, below the 5–6% level generally considered to indicate a balanced market. Low vacancy means tenant competition, rapid lease-up, and upward rent pressure.

Naturally occurring affordable housing: A significant share of Sacramento’s affordable rental stock is unsubsidized housing — older properties with below-market rents, predominantly owned by small, independent landlords. No comprehensive inventory of this stock exists, but estimates suggest it includes tens of thousands of units.

Sacramento’s Regulatory Environment for Landlords

Sacramento-area landlords operate under a layered regulatory framework combining state law and local ordinance.

Sacramento Tenant Protection Ordinance (TPO)

Sacramento enacted its Tenant Protection Ordinance in 2019, effective February 2020. The TPO applies to rental units in the City of Sacramento built before February 1, 1995 — a substantial portion of the city’s older rental stock.

Rent increase limits under the TPO: For covered units, annual rent increases are capped at the lesser of 3% or the Consumer Price Index. This is more restrictive than AB 1482’s 5% + CPI formula. In a year with CPI of 4%, an AB 1482-covered property could increase rent by up to 9%; a Sacramento TPO-covered property could increase by only 3%.

Just-cause eviction: The TPO requires just-cause reasons for termination of tenancy for covered properties. The categories largely parallel AB 1482 but include some Sacramento-specific provisions.

Relocation assistance: No-fault evictions under the TPO require relocation assistance. The required amount exceeds AB 1482’s one-month minimum for higher-income units.

Rent Registry

Sacramento property owners with covered units are required to register their rental properties annually with the City’s Rental Housing Inspection Program. Registration fees apply. Failure to register is a violation independently of any habitability issues.

Sacramento’s Rental Housing Inspection Program

Sacramento operates a proactive rental inspection program for single-family and small multifamily units. Unlike complaint-driven inspection programs, proactive inspection creates a baseline compliance record. Landlords who participate in good faith and maintain compliant units are at low risk of significant penalty.

The Small Landlord’s Role in Sacramento’s Affordable Housing

Independent landlords in Sacramento provide housing across a range of neighborhoods and income levels. In South Sacramento, Del Paso Heights, and Oak Park — neighborhoods where institutional investor interest has grown — small landlords who maintain long-term tenant relationships and below-market rents represent one of the most significant remaining sources of affordable housing.

Several factors put these landlords at heightened risk of exit:

  • Age of ownership: Many small Sacramento landlords purchased property in the 1980s and 1990s. As they age, estate planning may trigger sales that convert long-term affordable rentals to market-rate or ownership housing
  • Regulatory burden: Compliance with the TPO, the rental inspection program, and state law requirements creates administrative burden that individual landlords without professional management support struggle to manage
  • Rising operating costs: Property tax, insurance, and maintenance costs have all increased faster than TPO-capped rent increases for some property types, compressing margins

LeaseBase Housing Foundation’s programs are designed to address each of these risk factors in the Sacramento market through technology access, compliance education, and research-based advocacy.

Resources for Sacramento Landlords

  • Sacramento Housing and Redevelopment Agency (SHRA): Administers housing programs, HOME funds, and rehabilitation loans for rental property owners
  • Sacramento Tenant Protection Ordinance information: Available through the City of Sacramento’s Housing Services Division
  • Rental Housing Inspection Program: cityofsacramento.org

For information about LeaseBase Housing Foundation programs serving Sacramento landlords, contact us.