Kaden Kleinschmidt, ASU Walter Cronkite School of Journalism
Residents of the Valley are facing a growing problem: low and middle-income rental housing has become increasingly unaffordable and hard to find. If this isn’t mitigated, it will have long-term negative effects on students, families, and communities at large.
Over the last decade, Arizona has become one of the nation’s most quickly growing states, largely because of Phoenix’s rapid metropolitan growth. This expansion has naturally spurred demand for housing, especially in the rental market. As a result, homeowner vacancy rates and rental vacancy rates have fallen, with new development not keeping pace with the increased demand.
Dr. Alison Cook-Davis, the associate director of research at ASU’s Morrison Institute, believes there are two main trends emerging in the rental market, one of which is continued rent cost increases considering the low amount of affordable rental units, and the second being that new construction typically happens in high-price areas, which bars out middle- and low-income families.
According to the Department of Housing and Urban Development, between 2011 to 2017, the average rent for an apartment in the Valley increased by almost 5% each year, outpacing the national average (4%) and general inflation. Since then, rent increases accelerated to 7% in 2018 and 9.6% in 2019, the highest in the nation. As a result, between 2011 and 2017, the number of units with rent under $800 per month dropped by 36.4%. In addition, an increasing number of apartments have been converted to short-term rentals, depleting the stock of affordable homes further.
Tempe resident Gale Clay has fallen victim to these rent increases firsthand. Clay, 62, has been a tenant for six years at the Silverwood apartments near Apache Boulevard and the 101. Her rent had been affordable for her at under $700 per month, but that changed last month when she and her neighbors got word that a new property manager would be taking over.
“They upped my rent from $675 to $1,190, and this is starting in January. I just can’t afford that,” Clay said. “I’ll most likely live out of my SUV until I can find a new place to live,” said Clay. “I’m a survivor, and I’m going to be OK. My mantra has always been about being fearless.” When asking the new property owners, Market Edge Realty, about the dramatic rent increase, they gave no reply.
Dr. David Schlinkert, a senior policy analyst at Morrison Institute, said Arizona’s rental units are likely to require an increasing number of repairs in the coming years and more than owner-occupied housing. This is especially a problem in rural areas. Even in Phoenix, 214,500 of the city’s 593,300 (36%) current rental units are over 40 years old. Some are far older. Although there is sparse data on repairs undertaken in these units, it is not difficult to understand that these units will begin, or have already begun, to deteriorate without any repairs or rehabilitation.
In April of this year, the Arizona Multihousing Association (AMA), a lobbying group for landlords, talked about the growing number of extreme spikes in rent. Its statement attributed the increases to several things including a shortage of rental units, an increase in land prices and property taxes, landlords not receiving rent from several renters throughout the pandemic, and slow-moving rental assistance.
The AMA statement said in part: "The cost of operating rental property has gone up significantly over the last 18 months. Property owners have no choice but to pass that on to renters."
While the pandemic is on the downward slope in the Phoenix metro area, its economic effects could still be lingering, causing renters like Gale Clay to search for more affordable homes.