Is Phoenix, the city of sprawl and unending development, becoming a centralized, urban hub?
If you ask Phoenix multifamily commercial broker John Kobierowski, we’re on our way. And that’s a big change from where the city was even a few years ago.
“Phoenix, according to the outside investor who looks at apartment buildings or other development, they say, ‘Well, you could build these places anywhere. You can keep going!’ said Kobierowski, Senior Managing Partner with ABI Mulitfamily , a local brokerage and management firm that deals with apartment investment transactions.
“They always refer to Phoenix as having no boundaries to growth,” he said.
But, that’s all changing.
“Now, we’re starting to see more urban growth, more reliance on walkability,” he said. “That’s going to be a big part of Phoenix’s growth.”
In some ways, it’s cheaper for cities to develop in town than it is to expand. The infrastructure needed for development is already there within a city, from water lines, sewer lines and electricity to services like fire, police, hospitals and schools.
And people want to be urban, according to Kobierowski. “I think that’s what developers are looking for and that’s what consumers are driving,” he said.
The shift to the center of town, especially in Phoenix, Tempe and Scottsdale, has also meant the cost of development has gone up. And, with those costs, rents are going up, too.
ABI Multifamily provided ABC15 with data that shows just how much those rents have increased in 2010 and 2015.
Take a look at the charts we put together that show the jumps:
Scroll over each bar to see the price of rent or percent increase in each city.
Rents went up most in downtown Phoenix. In 2010, the average rent for a two-bedroom, two-bathroom apartment there was $1,310. In 2015, that number jumped to $1,517. That’s a 34 percent increase.
In South Scottsdale, rents increased by almost $300 from 2010 to 2015 and they went up almost as much in North Scottsdale.
South Tempe also saw some big prices increases. In 2010, you could rent a two-bedroom, two-bathroom apartment there for $799. In 2015, it’ll cost you $1,021 on average.
If you’re looking to rent a new apartment in one of these areas now, there’s not much you can do to keep the prices down.
But, Kobierowski said moving out of the Central Corridor and into Midtown Phoenix or Uptown Phoenix could save you some money.