According to Arizona State University, rents have skyrocketed by 72% recently, partly because of a statewide housing unit shortage of over 65,000 units. The author of this article makes some fascinating points about the recent RealPage rent price fixing lawsuit trend and it’s chilling effect on future inventory counts just as the country desperately needs increased investment. Read this article to get the full details.
Rising Costs and Housing Shortage
Mayes has filed a lawsuit against several Arizona landlords, alleging that they used a rent management software service called RealPage to form an apartment cartel.
Mayes’ theory is nonsensical and contradicts all historical experiences regarding the relationship between vacancies and rents. Cartels work by limiting production. If Arizona had a bagel cartel, the members would agree to limit the number of bagels they baked. They wouldn’t each bake the regular number of bagels, refuse to sell some of them, and let them go stale each day.
Of course, the defendants in Mayes’ case don’t do that at all. They couldn’t begin to do that. They are trying to build as many new apartments as they can. And what do you think stops them from building more?
Conclusion
The rental market in the US is evolving rapidly, but almost none more so than Phoenix. With rents soaring by 72% and a significant housing shortage, this local community in Phoenix is at a crossroads. We can all completely agree that aggressive tactics to raise rents by small amounts are bad for society, but sometimes practicality must win out and dramatically complicating the rental unit development landscape is almost guaranteed to exaserbate an already crticial problem.
