AMA
NOT IN MY BACKYARD The need for rental housing is burgeoning, but some Valley cities are resistant to multifamily development By KYLE BACKER
A
place to live in Greater Phoenix is becoming harder to attain. While homeowners have enjoyed a dramatic increase in the value of their investments, those in the rental market have seen a larger percentage of their paycheck eaten up by rising housing costs. A market report by online real estate company Zillow found that rents rose 17.7% year-overyear in the Phoenix area as of May 2021. Another Zillow study forecasts that by the fourth quarter of this year, typical renters in Greater Phoenix will become housing burdened, meaning that more than 30% of their income
48 | September-October 2021
will go toward keeping a roof over their heads. As a result, the Phoenix metro will drop from the 29th to 38th most affordable metro in the U.S. “It’s Economics 101: the law of supply and demand,” says Courtney LeVinus, president and CEO of the Arizona Multihousing Association. “When the supply of something is low but demand is high, the price goes up in response. Rent works the same way. When we have a robust supply of rental housing in the Valley, rental costs tend to remain steady, but when we have a shortage of rental units — and thousands of people moving to Greater Phoenix every month — then rent increases.” A study commissioned by the National Multifamily Housing Council and the National Apartment Association estimates that the
Phoenix metro needs 150,000 additional rental units by 2030 to meet demand. To hit that target, the pace of current rental construction levels would need to hasten. “In the 1980s, Greater Phoenix saw 105,905 multifamily units built. In the following three decades, the production plummeted, and we averaged 47,000 units per decade after the ’80s,” LeVinus notes. “We built up a great supply in the 1980s that made Arizona’s housing stock quite affordable, but now we are clearly not keeping up with demand.”
IN THE ZONE When a developer is looking to build a new apartment complex, the first step is to find land that is properly zoned for multifamily housing. Lots
