Tiny House-Like Apartment Complexes? Phoenix’s New Trend

Article originally posted on AZ Central on December 25, 2017

Metro Phoenix’s apartment building boom has a different look in the suburbs. You might have driven by one of the new rental complexes and thought it was a new home subdivision.

Developers are building single-story, unattached rental homes with private backyards that look much like single-family houses.

More than a dozen of these horizontal complexes have recently been built or are under construction. And renters are snapping them up.

“I didn’t want to live in an apartment because of all the noise above you,” said Scott Cocuzza, who is moving into the new 136-unit Christopher Todd community at Greenway and Litchfield roads in Surprise.

His complex opens in January is already 60 percent leased.

“My fiancé lives in El Mirage, and I am moving from north Scottsdale/Phoenix,” he said. “She found these great one-story apartments right across from a park, halfway between where we both had lived.”

Trending in metro Phoenix

Most of the Valley’s new single-story apartment complexes come with the popular amenities of new homes: backyards, alarm systems, smart-home technology, 10-story ceilings and even doggy doors.

Most also have the amenities of upscale apartment complexes: clubhouses, exercise facilities, community pools, ramadas and fire pits.

NexMetro Communities launched this new type of rental in the Valley and has 1,500 homes in several Avilla communities underway or recently completed, mostly in the East and West Valley.

Christopher Todd Communities is currently building five, one-story “horizontal” rental complexes in the Valley and has plans to construct another five to seven next year.

“Phoenix is at the forefront of this emerging product type, and now we have clients planning and considering these developments all over the United States,” said Tim Sullivan, principal of national real estate firm Meyers Research.

Location, location, location

Most of the 18,000 new apartments going up in the Valley are located in central Phoenix, Scottsdale and Tempe. Many of the developments are at least three stories high, but can be as tall as 30 stories in downtown Phoenix.

The horizontal projects are after a different demographic.

Many are going up in Valley suburbs that have seen little new apartment development since the housing crash.

“For about $50 more a month, renters are getting more privacy and top amenities in a gated community,” said Christopher Todd CEO Todd Wood, about his company’s “horizontal” rentals. “We have created a new way to live that is resonating with the market.”

Rents in Christopher Todd one- and two-bedroom apartments range from $1,050 to $1,350. Rents in NexMetro’s Valley homes, which are as big as three bedroom, range from $1,025 to $1,689.

Arizona housing analyst Jim Belfiore said the new small, single-story rentals could impact Valley new home sales “minimally” as some would-be buyers opt to rent one of these small rentals and hold off buying for a bit longer.

Renters by choice

Developers building typical multi-level apartments in the central Valley are going after Millennial renters who can’t afford to buy there or baby boomers who want to live closer in and have a low-maintenance home.

The single-story rental developers are going after people who don’t want to buy but want to live in a new suburban home that’s not attached to their neighbors.

The developers are also offering some of the only new rental developments in suburbs including Surprise, Queen Creek and Goodyear.

“We have definitely seen the demand for higher quality, leased-living experience grow on a scale like never before,” said Josh Hartmann, president of NexMetro. “Many people are choosing to rent because they don’t want to be tied down by a mortgage or deal with the hassles of maintenance.”

Cocuzza, who is in his early 50s, said he and his fiancé are signing a two-a-half-year lease because they don’t plan on buying anytime soon.

Linda Giove, who moved to the Valley from New York to retire, is leasing a three-bedroom home in NexMetro’s Queen Creek rental community, near Ocotillo and Ellsworth roads.

“I lived nearby and couldn’t figure out what the little houses they were building were going to be,” she said. “We have always owned homes before, but I walked into this community the day it opened and fell in love. Everything is brand new, and it’s so nice and quiet.”

A Phoenix developer redefined retirement for the country with the first Sun City. Other developers built the first big desert-golf communities here. Looks like the Valley could be launching another new national housing trend.