Apartment Industry Contributes $53B to Phoenix Economy

The apartment market in Arizona and Phoenix has become a major contributor to the local and state economy. According to a recent Hoyt Advisory Services study and commissioned by the National Apartment Association and National Multifamily Housing Council, the apartment industry has contributed $73.2 billion to the Arizona State economy and $53.8 billion to Phoenix’s local economy.

“In Arizona, the apartment industry’s impact is the equivalent of the state, playing host to more than 10 Super Bowls each year,” Courtney LeVinus, president and CEO of Arizona Multihousing Association, tells GlobeSt.com. “What helps make the industry an economic driver is that 37% of Arizona residents live in rental housing. Occupancy has historically been strong in the state’s two major metro areas. In 2018, Metro Phoenix recorded an average vacancy rate of 7.1%; Greater Tucson’s rate was 6.7%.”

The apartment market has grown tremendously as a result of increased population and job diversity. “Buoyed by strong job growth, increased personal income growth, positive demographic trends, and solid net migration inflows, the Arizona multifamily market is very healthy,” adds LeVinus. “Pro-growth policies by our state’s leadership have helped to encourage economic growth and will continue to play a major factor in keeping our industry healthy.”

Phoenix makes up a huge portion of total apartment contribution in the state, and it is no surprise. Phoenix has led growth in the overall Arizona market, becoming what some have gone as far to call an emerging primary market. “Metro Phoenix is enjoying robust numbers in job and population growth. A Bloomberg report shows that 200 people on average move into the Valley on a daily basis,” says LeVinus. “This is creating the need for more rental housing, especially workforce and affordable housing. By the end of 2019, Metro Phoenix alone will have completed 45 multihousing projects totaling 10,000 units.”

The booming apartment market hasn’t only meant economic growth, but more opportunities for residents as well. “In Metro Phoenix, the apartment industry and our residents support 284,400 jobs. It also contributes resident spending of $48.6 billion, operations add $1.9 billion, new construction adds $2.5 billion and renovation and repair contribute $770 million,” says LeVinus.

The activity is only at the beginning. “Brokerage firm CBRE reports that between now and 2030, Metro Phoenix will need to build 10,736 new apartment homes each year just to accommodate household growth,” says LeVinus. That will ensure the market continues to be a major player in Phoenix and Arizona overall.