Starting in 2025, Arizona will eliminate the rental tax for all renters in the state. On the surface this seems like a win but, in truth it does nothing to solve the root of the problem and will reduce revenue for cities.
Here are some key points. In Scottsdale, the new law will reduce the city’s finances by $14 million. Funds that go to the preserve, the general fund, and for transportation. In a 2021 study, it was found that one in three Arizonans was categorized as rent burdened. Meaning that a renter spends at least 30% of their income on living expenses. I imagine this has increased. Prices for rentals have gone up at a rapid rate and there are no controls in places to limit what can be charged.
Parking spots, technology packages, garbage pickup, etc. is added to each month’s bill as well as the increase in rent when you renew. I have talked to people whose rents have increased from $200 to $400 each renewal period. Were there any updates done, any new benefits, or any other added luxuries? No. It is just that the owner of the rental property/communities can or my favorite line, “We are keeping the prices in line with the surrounding market.”
Now you may be asking, “Doesn’t the business have the right to make a profit?” Of course, they do. That is capitalism. What I ask is where is the line drawn? Where is the line where profit meets greed? Where taking advantage of a market because affordable housing is out of reach for so many. I am not anti-capitalism by any means, but I am against corrupt capitalism. We see this today in almost every industry. Taking advantage of people because there aren’t enough rules and regulations to stop them.
I have had this discussion with our state representative in Scottsdale and although I appreciated the time that was taken to speak with me, I can say I wasn’t too thrilled with the results of our conversation. Though, I am sure I frustrated our representative also. When I said this law will do nothing for renters, I stated that all that will happen is that the monthly rent will increase more and that other fees will increase to make up for the elimination of the renters’ tax. The $30 to $50 dollars in tax savings will evaporate because there is no control in the price structure.
It has been debated that if you continue to build more apartments that the prices will go down because of supply and demand. Well, that is true to an extent when you don’t consider the other factors that are and have been occurring. Without affordable housing, people will be driven to rent. By 2050, it is stated that 70% of the world’s population will live in a metropolitan. As someone who has come from a very large city, I can tell you one thing we have in common there. We mostly rent.
If you really want to help renters bring back first-time homeowners’ benefits, build affordable single-family homes, give renters breaks on their taxes. Should renters be punished because they can’t afford to own, but are still adding to the economy? How about rent stabilization? This allows for a balance between allowing for a profit to be made, but making sure that the price increase is fair.
On the surface, we have a legislator and a governor celebrating, but the renters in this state have not received the help that is truly needed, and the cities will suffer providing the services that the revenue created. Renters deserve and demand more. Unfortunately, it seems that the people who can make these changes do not feel the same way.
Editor's Note: Andrew Scheck is a Scottsdale Environment Advisory Commission member.