Metro Phoenix's record apartment buying spree drives up rents and evictions. Here's why
Average rent in metro Phoenix moderated a bit this summer, but many residents are still struggling. ·AZCentral | The Arizona Republic
Catherine Reagor, Arizona Republic
5 min read
Justin Bullinger and Leah Runyan moved into a one-bedroom midtown Phoenix apartment in 2021. Their rent was $1,600 a month.
Early this year, it jumped by $500 a month. The couple moved because they couldn’t afford it.
“We loved our apartment and were happy with the home we made there,” Bullinger said. “We were very disappointed to have to pick up and leave because the cost just became outrageous.”
The couple ended up moving to Los Angeles a few months later because though they won’t be saving anything on rent, the incomes are higher, he said.
Their Phoenix apartment complex sold in 2020 just as an investor buying spree of Valley apartments took off. A Los Angeles-based private real estate firm bought the couple's former complex for about $65 million, and rents quickly went up.
Metro Phoenix rents spiked more than 35% during the investor buying spree. Last month, eviction filings climbed to rival the record from 2005.
Arizona housing advocates have been watching the trend with alarm because the state has a housing shortage and a growing homeless population.
There’s also concern metro Phoenix will lose more residents like Bullinger and Runyan, who can’t afford the higher rents on the area’s typical incomes.
The rent and eviction problem
National research shows many of the big investors who bought apartments during the past few years need to squeeze a lot of profit out of their pricey purchases. That not only means higher rents but also less money spent maintaining the complexes and fewer landlords accepting housing vouchers.
The Valley’s average rent hit $1,691 at the end of last year, compared with $1,250 at the end of 2020, according to ABI Multifamily.
Metro Phoenix eviction filings climbed in August to rival the monthly record set almost 20 years ago. Landlords filed to evict renters 7,693 times last month, according to the Maricopa County Justice Courts.
That’s about 200 fewer Valley eviction filings from the August record set in 2005.
The average eviction judgment was $3,190 last month, almost double the typical Valley monthly rent.
Elisa Gomez rented a two-bedroom in west Phoenix’s Maryvale community, where she lived with her mom and teenage daughter. The apartment complex was sold in early 2022.
When her lease was up last fall, her landlord sent a notice saying her rent was climbing by $400 a month. Also, housing vouchers were no longer going to be accepted.
“We couldn’t pay more with or without our voucher, and we couldn’t find any other place," said Gomez, who worked at a grocery store but qualified for the government voucher because she didn’t make enough to afford rent for her family.
The family moved to south Texas to live with relatives.
Many people with housing choice vouchers, formerly known as Section 8 vouchers, are finding fewer landlords accepting them. That’s because property owners can lease to other renters who will pay more, and they don’t have to deal with extra paperwork and regulations to get paid with the federal rent aid.
The federal housing voucher program provides financial aid to people who can’t afford housing. Typically, a voucher holder pays 30% of their income toward rent and utilities, and the voucher covers the rest.
Rebecca Flanagan, the former Arizona director for the U.S. Department of Housing and Urban Development, said the voucher program was started to provide housing for low-income tenants and to make sure landlords got paid.
“Landlords shouldn’t be able to discriminate against renters because they have housing vouchers,” she said.
Many of the metro Phoenix apartments snapped up by investors during the past few years were some of the most affordable and top locations for renters with housing vouchers.
Phoenix is opening its waiting list for housing vouchers again, but that won’t help if more landlords won’t accept them.
Not enough rentals for the Phoenix area
A big part of the problem is there aren’t enough apartments in metro Phoenix, particularly affordable ones.
Arizona’s housing shortage is estimated to be between 100,000 and 250,000 homes. Metro Phoenix needs the most additional housing.
The building of about 44,000 apartments is underway in the Phoenix area, but it will be several years before they open to renters because of antigrowth NIMBYism fights, labor shortages and higher interest rates making some too expensive to build.
Higher rates are cooling the apartment-buying spree.
But what will really help Arizona’s housing crisis is more homes.
