Metro Phoenix Rents Fell 5%. Here’s Where Costs for Tenants are Down The Most Article originally posted on AZ Central on February 13, 2024 Metro Phoenix renters are finally getting a break. Valley rents have stopped their heady increases and are down in most areas. Also, Arizona legislation has been introduced to give tenants more help. It’s needed after metro Phoenix led the nation with a 30% rent hike in 2021 as the area drew droves of new residents during the pandemic. Many tenants trying to renew leases in 2022 were hit with increases of hundreds of dollars a month. But rents aren’t dipping because the Valley’s growth has stalled. The Phoenix area ranked second to Houston for apartment leasing in 2023. “Phoenix was one of the nation’s top apartment demand performers in 2023” because of strong job growth, said Kim O’Brien, an analyst with apartment data firm RealPage. The growth is driving more much-needed apartment development, which could put more downward pressure on rents. How many rental deals were inked in 2023? The median monthly rent in Phoenix was $1,355 in January, according to Apartment List. That’s down 5% from a year ago. That makes the Valley the 59th most expensive metro area for rent. The median U.S. rent is $1,373. Avondale posted the biggest drop in costs to tenants. The West Valley city’s median rent fell almost 6% during the past year to $1,281 for a two-bedroom. Phoenix and Goodyear saw rents fall about 5%. Surprise was the only metro Phoenix city to see rents climb, with a 1% increase. Now, the once-affordable suburb’s median two-bedroom rent cost is $1,748, only $14 less than in the Valley’s priciest city, Scottsdale. Renters inked deals for 12,027 Phoenix-area apartments in 2023. That’s only behind Houston’s pace of 15,506, according to RealPage. Construction started on more than 20,000 apartments across the Valley last year, ranking the area No. 4 for multifamily building. But housing analysts say more is needed to tackle the housing shortage. Not all of the apartments are being built from the ground up. Almost 1,400 apartments underway are coming from office conversions, according to RentCafe. The redevelopment of the Kierland Sky offices on the Scottsdale/Phoenix border will add 420 apartments. Attempt at Legislature to rein in rents New Arizona legislation calls for stabilizing rents with a law that limits the amount landlords can increase tenants’ costs by at most 10% a year. Cities and counties can’t impose rent control laws in Arizona. Limiting what apartment owners can charge tenants has drawn big opposition. A group of Democratic lawmakers is backing the legislation and several other bills to help Arizonans with high housing costs, including a bill requiring landlords to disclose fees and more information to renters. Where are all the renters coming from? Maricopa County grew by about 70,000 people between July 2022 and July 2023, according to Maricopa Association of Governments estimates. Most new residents rent before buying. About 12% of renters searching for apartments in the Valley were from Los Angeles last year, per Apartment List. Las Vegas was next at 7%, and Tucson third at 5%. About 27% of searches for metro Phoenix apartments in 2023 were from people living out of state. That number was higher a couple of years ago. The Valley’s higher housing costs are deterring some renters and sending them to more affordable areas in Texas and the south, according to Apartment List.