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Market failure: 'It falls on all of us to end the housing crisis'

In metro Phoenix, giving developers free rein has resulted in skyrocketing rent prices and eviction rates. Policy experts and affordable housing advocates say solving the crisis requires broad structural change and grassroots action

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Market failure: 'It falls on all of us to end the housing crisis'

In metro Phoenix, giving developers free rein has resulted in skyrocketing rent prices and eviction rates. Policy experts and affordable housing advocates say solving the crisis requires broad structural change and grassroots action

If you live in metro Phoenix, you’ve probably felt the effects of the housing crisis. 

Even if you’re paying rent on time every month, you may have chosen a longer commute to work or to live with roommates to make ends meet. According to Mark Stapp, director of ASU’s Center for Real Estate Theory and Practice, there’s an "increasing divide" between those who can afford to live in today’s housing market and those who cannot.

“This is not just a housing problem,” Stapp said. “This is a social problem.”

The crisis is most impacting renters, a demographic that includes most service workers, teachers, first responders, medical staff and, of course, students, Stapp said. In a 2020 survey from the Hope Center for College, Community, and Justice, 48% of surveyed college students nationwide had experienced housing insecurity in the past year, and 14% experienced homelessness.

Ashlee Tziganuk, a research analyst at ASU’s Morrison Institute for Public Policy, said the metro Phoenix housing crisis is adversely affecting anyone who earns the median income or below in their neighborhood. That’s a lot of people — by her estimates, around 44% of renters in Maricopa County are cost-burdened, meaning they spend more than 30% of their income on rent.

“When people experience housing insecurity, sometimes they have to do things like double up with people, find roommates or live with family members,” Tziganuk said. “Worst case scenario, people are experiencing housing loss.”

Garima Jain, an international graduate student at the School of Geographical Sciences and Urban Planning, said she spends about 65% of her income on rent. When she got an offer to start her Ph.D. program in January 2021, she started monitoring rent prices in Tempe immediately.

Within a few months, she said some had increased almost $400.

“By mid-August, when I got there, the rent that I had seen in January had exploded,” Jain said. “The market had completely gone out of whack.”

Average rent has increased by about 37% in Tempe and about 40% in Phoenix since March 2020, according to data from Zumper, a leading rental aggregator. Apartment List, another rental data site, ranked Phoenix in the top 10 fastest rising rents in the country.

Jain is a full-time ASU student and employee. Like many graduate students, she lives off a University stipend — in her case, about $20,000 per year. According to ASU’s Knowledge Exchange for Resilience initiative, the average annual cost of living for a single adult in Maricopa County is over $28,000.

This fall, Jain had to move in with extra roommates to shoulder the cost of rent. So did Nathalie Emery, a sophomore studying English literature who lives in an off-campus apartment in Phoenix.

“It’s hard living paycheck-to-paycheck,” Emery said. “I had to reduce my hours at work so that I can be a full-time student to keep my scholarship. But then I can barely pay for my housing because it’s not covered by my scholarship.”

Emery, a Federal Pell Grant recipient, relies on financial aid to pay her tuition. This July, she discovered her New American University scholarship had been reduced, shortly after the Arizona Board of Regents voted to increase tuition at ASU.

At a precarious time for short-term renters, students need all the help they can get. Reducing essential financial aid “reflects very poorly on the University,” Emery said. And she’s worried it’s only a matter of time before she has to take out loans just to pay her rent.

“I’ve had really tough circumstances over the past year,” she said. “I mean, everyone has. I’m not gonna single myself out. Everyone’s had a really, really hard time trying to live in the world that we’ve made for ourselves.”

Sarah Saadian is senior vice president of public policy and field organizing at the National Low Income Housing Coalition. She works with state-level organizations, like the Arizona Housing Coalition, to conduct research and develop policy solutions to housing insecurity.

So what are they? If we want to end the housing crisis, what has to happen?

Saadian can instantaneously rattle off a list of emergency actions local, state and federal governments could take to ease the burden on Phoenix-area renters. But even if NLIHC’s comprehensive platform was implemented tomorrow, it will still require grassroots action to get everyone in stable, affordable housing as quickly as possible.

“There’s no single answer,” Saadian said. “It falls on all of us to end the housing crisis.”

1. Extend and enhance emergency rental assistance

In 2020, the Centers for Disease Control and Prevention issued a national eviction moratorium in response to the COVID-19 pandemic. Before the moratorium, Maricopa County had some of the highest rates of eviction filings in the country. After the moratorium’s implementation, filings in 2020 plummeted to about 25% of their annual average highs.

In August 2021, the Supreme Court ended the moratorium. In August of this year, Maricopa County received 6,574 eviction filings, the highest number of filings in a single month since October 2008.

The federal eviction moratorium prevented about 1.5 million eviction filings nationwide, according to the Princeton Eviction Lab. Saadian sees no reason why such emergency policies cannot be reimplemented and enhanced to combat the current crisis.

“That was very successful at keeping people stably housed,” Saadian said. “That’s what we need permanently going forward.”

In August, the city of Phoenix exhausted its Emergency Rental Assistance funds and began referring applicants to other nonprofit agencies. The city of Tempe exhausted its funds for emergency rent and mortgage assistance in December 2021.

Deborah Arteaga is the CEO of Tempe Community Action Agency, a nonprofit that provides emergency and long-term housing assistance. She said TCAA is understaffed, underfunded and has insufficient shelter space. She’s too busy coordinating day-to-day operations to get involved with policy advocacy directly, but she said something has to change, and soon.

“There’s a big gap between what we need and what’s available to help,” Arteaga said.

According to Emma Muriel, the communications manager for Arizona Housing Coalition, which coordinates advocacy for hundreds of housing justice groups, fatigue and underfunding are common threads statewide.

“We hear from our membership every day that they’re burnt out and very tired,” Muriel said. “Unfortunately, we see staffing shortages as well. The folks that work in direct service are trying their best, but there’s always a gap in terms of resources, funding and places to send folks who are in need.”

2. Subsidize and build more affordable housing

Claire Nelson, a junior studying sustainability and geography, is a downtown Phoenix local who serves as a board member of their neighborhood association. They said while the current housing crisis was exacerbated by the pandemic, it’s ultimately the result of decades of rapid expansion and growth in the Valley.

“This isn’t anything that we couldn’t have seen coming,” Nelson said. “And we have seen this coming.”

Nelson was born and raised in Phoenix. When they graduate, they said they won’t be able to afford rent in their neighborhood of 20 years.

READ MORE: Here first: Michael Crow, downtown Phoenix and legacies of gentrification

Stapp traces the roots of the crisis to the Great Recession. When the market crashed in 2008 due to an oversupply of housing and predatory lending practices, developers overcorrected, under-building for the next 10 years.

That’s why some experts characterize the crisis as a basic supply and demand issue. Data from the NLIHC indicates there are only 20 affordable and available rental units per 100 extremely low income households in metro Phoenix.

According to Saadian, there is no profit incentive for developers to build affordable housing. The supply of affordable housing almost never catches up to demand without assistance from government subsidies.

“There’s this market failure where the private sector cannot build housing that’s affordable to people with the lowest incomes unless there is federal, state or local resources that are being put into it,” Saadian said. “And for decades, we’ve underfunded those resources and those solutions.”

New developments don’t move quickly either — it usually takes around 18 months to build and begin leasing new apartments — and the building process can be complicated by other factors, such as single-family zoning laws or local resistance.

In November 2021, the Morrison Institute’s housing research team compiled a set of policy proposals to address affordable housing shortages, including replacing traditional single-family zoning with “inclusionary zoning” to accommodate more apartment and multi-family housing development. Each proposed solution faces state-level legal barriers, which would require legislative intervention to change or circumvent.

In Tziganuk’s opinion, zoning laws in Arizona are “some of the biggest issues” in addressing today’s crisis.

“It’s not that they’re failing,” Tziganuk said. “It’s just that these systems are not set up in a way that’s conducive to building affordable housing.”

Nelson is wary of over-simplified, under-regulated approaches to housing development. Phoenix absolutely needs more housing, and quickly, but not if it means compromising on high sustainability standards and truly affordable prices.

“We need to do so in a way that’s conscious, that’s understanding of where you’re building things,” Nelson said. “Oftentimes, people are like, ‘we are building more housing,’ and forget the affordable, sustainable part.”

In January 2021, Tempe started the Hometown for All initiative, which ​​allocates a portion of city permit fees to support affordable and workforce housing opportunities. Current projects include the Apache Boulevard redevelopment, which could add 500 new affordable units.

A city-funded study in 2021 found Tempe would need at least 11,500 new affordable housing units to fully accommodate its low-income residents.

“We’re working on the supply issue in Tempe. But in the meantime, people are in crisis today,” Arteaga said. “So where do they go for help? What neighborhood is acceptable? Right now, all neighborhoods need to be open to get together and be part of the solution.”

Nelson thinks ASU is not doing enough to combat the housing crisis. They said the University often fails to provide reliable and stable housing for students, leaving them in “situations that are kind of rough,” such as rat-infested complexes, or sometimes hotels when dorms have reached capacity.

Jain agrees. ASU could take on a more proactive approach to building affordable housing, at least for its students, faculty and staff. With an ever-growing student population, she thinks it’s past time to invest in on-campus housing specifically for graduate students as well as undergrads.

“(ASU has) a lot of land, but they always choose to build just like a hotel, or they rent out lots of commercial properties,” Jain said. “But they don’t invest in graduate housing at all.”

READ MORE: 'Real estate is king': How Michael Crow found a way to fund and expand Arizona State University

3. Create and strengthen legal protections for renters

Last year, when housing was already in short supply and job loss was high, Arteaga watched as some developers used the crisis as an opportunity to capitalize on a vulnerable market.

“Many properties, especially during the pandemic, have been bought by other developers or companies that have raised the price of rent — sometimes dramatically — giving very little notice to renters,” she said.

According to Arteaga, the fastest-growing unsheltered population in Maricopa County is seniors. At TCAA, she’s seen cases of renters in their 90s getting evicted — “and I think that ought to be against the law,” she said.

Arizona has some of the weakest renter protection laws in the nation. The state has no “just cause” measure, meaning landlords and property managers can end rental agreements arbitrarily. They can also file for evictions within as little as six days after rent was due.

“I think a lot of people are scared of their landlords,” Nelson said. “When you’re renting, that is an inherently precarious situation.”

Nelson proposes strengthening the Residential Landlord and Tenant Act, which is currently unenforced by any state agency, meaning most evictions are informal and considered a private matter. They also said renters often have more power than they realize, if they find a way to leverage it as a community.

Tenant unions have sprung up like wildfire across the U.S. in recent years. In some cities, union organizers have successfully lobbied for "right to counsel" ordinances for guaranteed legal representation and even prevented evictions by disrupting court proceedings.

Saadian said the NLIHC definitively supports resident organizing.

“It can be extremely powerful,” Saadian said. “It’s incredibly important that you have people at the table helping to determine policy solutions who are closest to the problem.”

She also emphasizes that housing is not only a socioeconomic class issue, but a racial justice issue as well. The converging histories of segregation and redlining continue in the Phoenix metro today, resulting in persistent racial disparities in eviction rates.

Nelson is enthusiastic about burgeoning developments in tenant organizing in the Phoenix area — “I’m a fan of unions in the workplace and I’m a fan of unions in housing,” they said. Tenant unions may be one of the few solutions to the housing crisis that grasps the root of the issue, since market failure is what got us here in the first place.

“We all know that the realty industry and landlords aren’t going to do anything for us,” Nelson said. “So it’s really up to us to fix this.”

Edited by Camila Pedrosa, Sam Ellefson and Greta Forslund.

This story is part of The Sanctuary Issue, which was released on Oct. 5, 2022. See the entire publication here.

Reach the reporter at and follow @lexmoul on Twitter.

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