Metro Phoenix rents lead U.S. again for biggest increases, low-income families hit hardest
Author: Catherine Reagor, Arizona Republic | Click here to view original article
Metro Phoenix is again leading the U.S. for rising rents with the biggest increases hitting people with the lowest incomes.
After dipping in some Valley cities during May and June, apartment rents rebounded in July, according to new data.
Last month’s increase is a troubling trend since rents in metro Phoenix have climbed much faster than average incomes in the region during the past five years.
Most of the new apartments built in the Valley during the past few years are luxury complexes that most of the area’s renters can’t afford.
The recent rent increase doesn’t mean all landlords are being paid higher rents now because Arizona’s eviction moratorium has been extended until the end of October. Some landlords, particularly for smaller complexes, aren’t being paid at all.
Federal stimulus money has helped many renters in the U.S. keep paying their landlords, but no one received the $600 boost to their unemployment checks last week.
Metro Phoenix apartment data expert Thomas Brophy said not only is Phoenix leading the nation in rent growth, but the area’s many new apartments are filling up because absorption rates are high.
“Even highrise units (apartments) are back to leasing up briskly,” said Brophy, national director of research for Colliers International of Phoenix. “I know there was some talk that this would diminish due to COVID-19, but it’s not showing up yet in the numbers.”
What’s showing up in Valley apartment numbers
Metro Phoenix posted the biggest U.S. increase – more than 4% – in rents for apartments leased by “renters by necessity” during the past year, according to national apartment research firm Yardi Matrix.
The renter by necessity category covers a wide range of lower-income families who typically can’t afford to buy.
- During the second quarter when the pandemic hit the nation, the average apartment rent in the Phoenix area climbed nearly five times faster than the overall U.S. increase, according to Colliers.
- Still, only about 5% of all Valley apartments are empty, reports Colliers.
- More than 20,000 apartments are currently under construction in the Phoenix area, but there has been speculation rental development could slow during the eviction moratorium if landlords can’t collect rent.
- Average rents for one-bedroom apartments now range from $1,400 a month in Scottsdale to $870 in Glendale, according to apartment listing research firm Zumper. The average rent in the city of Phoenix is about $1,010.
- Arizonans need to earn $21.10 an hour to afford a modest two-bedroom apartment, according to the National Low-Income Housing Coalition. People earning the state’s minimum wage of $12 per hour must work 57 hours to afford a one-bedroom apartment.
Much needed affordable housing
A new affordable apartment project for people 55 and older with rents below the metro Phoenix average opened in south Phoenix in July.
All of the 90 affordable apartments at South 7th Village are already leased, and dozens more prospective tenants are on a waiting list for the rental homes.
“It’s not a surprise to anyone that metro Phoenix faces a severe shortage of affordable housing,” said Darlene Newsom, CEO of UMOM, which developed South 7th Village. “Without this kind of affordable option, people can end up in unsafe or inadequate housing.”
She said too many people in metro Phoenix live paycheck to paycheck or barely get by on social security and one medical bill or unexpected expense could leave them homeless.
Rents at South 7th are based on residents’ incomes and range from $492 to $766 a month for a one bedroom to $594 to $922 for a two bedroom.
Johnnie McGee was one of the first residents to move into the new affordable complex. He was paying $500 a month for a studio apartment in Glendale.
The Vietnam veteran, who has health issues from Agent Orange exposure during the war, had water damage in his apartment that led to mold and air conditioning that didn’t always work.
“I feel blessed beyond belief,” said McGee about his new rental home. “This is the life that I have been waiting to live for so many years.”
Reach the reporter at Catherine.Reagor@arizonarepublic.com or 602-444-8040. Follow her on Twitter @Catherinereagor.