PHOENIX — Phoenix has been successful in building tens of thousands of new apartments in recent years, but outside factors could become speed bumps in the momentum.
This month, Phoenix city leaders celebrated reaching their goal early of creating or preserving 50,000 housing units by 2030.
With more than 20,000 new apartments built last year, the Phoenix metro area ranked fourth in the country for new apartments, according to a study by RentCafe.
“You can see that when you drive around town,” Jamison Manwaring, co-founder of Neighborhood Ventures, said.
As a renovator, developer, and real estate expert, Manwaring said his company helps serve people on lower-to-moderate incomes by giving new life to dilapidated complexes, even converting a Mesa hotel into apartments.
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“A lot of the new buildings that are going up, those tend to be higher-end, class A apartments that are quite expensive,” Manwaring said. “And so, for the affordable apartments, you’re not seeing new supply of those affordable apartments."
Manwaring said the good news for renters is that the new supply of apartments in recent years has kept rent costs stable. However, interest rates, insurance, materials, and building costs have continued to skyrocket.
“When the borrowing cost goes up, the project doesn't make sense anymore,” Manwaring said. “So there's been a lot of supply that have come on the market the next few years, there's not much planned.”
Developers are also watching more outside factors, like recent changes in the Trump administration.
“We don’t know the full effect of some of these federal policies on our ability to continue to deliver housing in the numbers that we need to keep up with the economic expansion and do it in a way that remains attainable,” Arizona State University professor Mark Stapp said.
Potential impacts could come from reinstated tariffs on steel and aluminum, as well as an immigration crackdown.
“We knew what happened after SB1070 and what happened to our construction labor and how long it took for us to recover,” Stapp said.
