A recent report commissioned by the National Apartment Association and National Multifamily Housing Council found that the local apartment market contributes $53 billion to the local economy—but that is only the beginning. The Phoenix market is just taking off, and experts believe that demand is going to continue to grow across asset types.
“The demand for multihousing will continue to be strong. A significant percentage of millennials—the largest age group in the U.S.—are reaching their peak rental years. Because they are delaying marriage, they prefer apartments for a longer period of time,” Courtney Gilstrap LeVinus, president and CEO, of Arizona Multihousing Association, tells GlobeSt.com. “In addition, the senior living cycle also appears to be extremely strong. Baby Boomers are selling their houses and renting so they can enjoy a maintenance free lifestyle, which is also contributing the this increased demand.”
Unlike last cycle, today renting has become a standard in Phoenix. As a result, more apartments are coming to the market. “Apartments are an ideal solution for many, including students, recent graduates, young professionals, families and empty nesters,” says LeVinus. “The apartment industry will continue to work with our elected and appointed officials at all levels of government to expand the apartment housing supply to meet demand. The number of apartment permits has been increasing since 2012 and demand has grown steadily each year. In 2016 and 2017, more than 10,000 units were permitted each. In 2018, in Metro Phoenix, 37 projects were completed totaling 8,162 units.”
As a result, the apartment industry in addition to consumer spending has been a major component of the local economy. “As demand for apartments continues to grow locally, the significant contributions to Phoenix’s economy also increase. Apartments drive our local economy by adding employment opportunities, as well as revenue from resident spending, new construction, renovation and repair, and operations, all of which are positively impacting Phoenix,” says LeVinus. “The study also determined that the apartment industry has a major impact on local, state and national tax economies. Locally, tax payments associated with local apartment operations added $360 million and their residents contributed more than $5.5 billion in taxes to the Metro Phoenix economy. These taxes support schools, improvements to local infrastructure and other critical services in Phoenix.”
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