Why Has the Most Affordable City in the West Morphed into One of the Most Expensive Places?
Ten years ago, Phoenix was considered to be the most affordable city with one of the best qualities of life. Today? Well, let’s just say “times, they are a-changin”. Those who once benefited from the economical lifestyle provided by this city are now being pushed by the overdevelopment of high-end apartment complexes being built downtown.
Phoenix over the past few years has seen an emergence of luxury apartments. So much so that over 87 percent of all new rental complexes are high-end apartments catered towards the upper-middle class. To make way for these new living quarters, older complexes that housed middle- to lower-income families were torn down. Thus, it is not really any surprise that the metro Phoenix area saw an 8.1 percent climb in rental prices––the highest out of any U.S. city.
When you take into account that wages in the area have not risen even close to that number, it’s no surprise that lower-income people are moving out. For those who are able to stay, they’re watching their life’s savings dissipate into the dry desert air. To put this into a more literal, numeral perspective, “46 percent of Phoenix-area renters are paying more than 30 percent of their incomes to housing.”
If the median household income of renters in Arizona is around $40,000, that means almost half are paying $1,000+ per month. This doesn’t even include the $8,000 they would pay in taxes beforehand, leaving them less than $1,700 per month for things like car insurance, groceries, gas, savings...you know, the necessities in life.
The big issue that Phoenix officials are worried about is the inability for companies to attract employees. One of the main reasons Phoenix was initially so enticing to transplants was the affordability. Companies who moved their businesses from sybaritic Los Angeles are losing that competitive advantage. If things continue to grow at this rate, Phoenix will see a drastic change that limits the economic prosperity of the area.
Solving Phoenix’s housing issues stems down to building affordable apartments and investing in their light rail transportation system. Building near the downtown area is limited by space and current infrastructure. If Phoenix can figure out a way to construct affordable housing on its outskirts that’s easily accessible through an expansive transportation system, they will be able to stabilize the market. The longer they wait, the more susceptible they will be to increasing prices. Developers need to match this increasing demand before it is too late.
Prices in the Valley of the Sun are sweltering, and the heat isn’t letting up anytime soon.
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