Squeezed Out: People struggle to buy houses, pay rent as rising prices outstrip incomes
The Phoenix area faces a growing gap between what people earn and what they pay for housing.
The Arizona Republic and azcentral.com are covering the issue in our series "Squeezed Out."
Rents climbed at a near record pace in 2018, following several years of hefty increases. The result is nearly half of Phoenix-area renters pay more than they can afford for housing.
When it comes to buying a home, the region has almost always been more affordable than the U.S. average. That is about to change as incomes have not kept pace with rising home prices.
If you have information to share about how difficult it is to afford an apartment or a mortgage, contact Catherine Reagor, senior real estate reporter, at firstname.lastname@example.org or on Twitter @catherinereagor.
►$25 AT AT TIME: Solving Arizona's affordable housing problem with small donations
Arizona homebuyers can help put a roof over the heads of people who can’t find a home they can afford.
A new, voluntary program is collecting $25 donations to put toward growing metro Phoenix's stock of affordable housing available to rent.
The average monthly cost to rent in the Phoenix area jumped 8.1%, more than twice the U.S. average.
That increase added $103 to the average apartment renter’s monthly bill, according to a national researcher.
► RECORD HOME PRICES: Metro Phoenix home prices expected to hit new record high in November
The area's median home price was expected to climb from $280,000 to $285,000 in November 2019, based on pending sales.
Bidding wars for homes below $350,000 are common. A growing number of first-time buyers are getting beat out by investors, who are driving up prices.
The gap between what Phoenix-area residents earn and what they pay for housing is growing and putting the squeeze on many.
The only other time the Valley was less affordable than the national average was when housing prices shot up 50% during the boom in 2005 and 2006.
► AN EYE ON INVESTORS: New home sales climb in metro Phoenix, but are investors getting back in the game?
Investors were behind about 14% of metro Phoenix’s home sales in 2019.
That's nowhere near 2006 levels when investors were behind at least 40% of all Valley home sales.
Still, we're keeping watch. During the last boom, investors snapped up a record number of new Phoenix-area homes, then dumped them fast when prices started falling. Those investors played a big role in the housing market crash of 2008 to 2011.
► DISAPPEARING MOBILE HOMES: Luxury townhomes will replace former Tempe Mobile Home Park
New luxury condominiums will fill the vacant space once occupied by a mobile home park, with work starting months after residents were forced to move out.
The development has faced backlash and spurred concerns that new developments are driving up home prices and displacing poor and working-class families.
New-home buyers still can find real-estate bargains in metro Phoenix, but long drives are part of the deal.
Suburbs that were hardest hit by the housing crash and posted the highest foreclosure rates are now offering some of the least expensive new homes.
► HOMELESSNESS: Phoenix residents report 1,500 homeless encampments
Homelessness in Maricopa County continues to rise, and shows no signs of stopping.
The rise is partly a byproduct of fewer shelter beds in Maricopa County, experts say.
For the sixth straight year, unsheltered homelessness — people living on the streets, in desert washes, in vehicles or in another place not meant for habitation — increased.
VALLEY HOMELESS ENCAMPMENTS
► AFFORDABLE HOUSING: Arizona spending $15M on affordable housing and shelters for homeless
More people searching for affordable housing and temporary shelter in Arizona will receive some much-needed help from the $15 million devoted to the state's housing trust fund.
Plans for the money call for funding new homes for people who were homeless, including veterans, and housing for people with mental health needs.
This one-time bump is the biggest increase to the fund since the Great Recession in 2009.
► CITIES RETHINK HOMELESSNESS: Arresting people for sleeping outside is 'cruel,' U.S. Supreme Court affirms
In 2019, the U.S. Supreme Court essentially affirmed a lower court ruling that governments can't enforce a law that prohibits homeless people from sleeping on the streets when no alternative shelter is available.
Cities across the country, including in metro Phoenix, are now grappling with the impacts of the court ruling as they try to reduce the blight caused by encampments.
Tempe stopped enforcing its prohibition on urban camping after the ruling. Glendale and Surprise tweaked their laws to say they can only be enforced if shelter is available.
Phoenix kept its law, but officers are instructed to offer services before citing violators.
► TALKING ABOUT HOMELESSNESS: East Valley cities join forces to tackle homelessness
Tempe, Chandler, Scottsdale, Mesa, Gilbert and Apache Junction have banded together with Phoenix, Maricopa County and the Maricopa Association of Governments to fight the growing issue of homelessness across municipal boundaries.
The group unveiled a joint resolution in 2019 pledging to share data, discuss current practices and explore ways to mitigate the issue.
Tempe City Manager Andrew Ching said he hopes the joint effort ultimately leads to the creation of the East Valley’s first permanent shelter.
► INCOME AND PRICES: How Phoenix's home prices and income levels compare to other U.S. cities'
Phoenix-area home prices are lower than in many other big cities, but so are its household incomes, a crucial piece of the affordability equation.
The median home price in the Phoenix area is about $273,000 — still a relative bargain compared with places like San Francisco and Los Angeles.
► INCOME OUTPACED BY INFLATION: How well Phoenix-area neighborhoods and cities have recovered since the recession
Arizona's average household income is back to what it was before the Great Recession, but that doesn't say much when considering inflation. Income growth has kept up with inflation since 2007 in only two of Arizona's large cities — Gilbert and Scottsdale, according to the data.
► TURMOIL IN TEMPE: City gets creative with housing. But is it enough?
The need for affordable housing is front and center in Tempe, where older apartments and mobile homes have been cleared out for high-end options.
The city is looking at ways to increase affordable housing, but some residents say it's not enough.
About 37% of Tempe households spend more than 30% of their incomes on rent or mortgages — and that's too much, experts say.
► MODEST HOME, TALL ORDER: You need to work 71 hours a week for a 2-bedroom
An Arizona renter with a minimum-wage job must now work 71 hours to afford a modest two-bedroom home, according to a report released Tuesday by the National Low Income Housing Coalition. In the Phoenix metro area, that figure rises to 75 hours of labor.
Under a widely accepted standard for affordability, a household should spend no more than 30% of its income on housing costs.
► PROPOSED DEVELOPMENT: Developer of Mesa Artspace Lofts in talks for affordable housing project in Tempe
Tempe is entering negotiations with the developer who opened the Mesa Artspace Lofts, an affordable housing project that provides live-work space for artists and their families.
The project would go on land leased from the city near Dorsey Lane and Apache Boulevard.
► LET THE MARKET DECIDE? Lack of housing in Chandler divides leaders and advocates
In Chandler, city leaders and community agencies are divided on how to best address affordable housing needs.
Some council members believe it's not the government’s role to provide affordable housing and that the market should dictate prices.
Social service groups say that view edges out those who work in industries that support the high-wage jobs the city is trying to attract.