Here's how much income Arizonans need to afford rent and what leaders are doing about it (2024)

Catherine ReagorArizona Republic

To afford a two-bedroom apartment in Arizona, a renter needs to make almost $30 an hour. Too many don’t.

That hourly wage adds up to an annual salary of $62,000. Someone making the state’s minimum wage of $13.85 would have to work at least 80 hours a week job to earn that much.

Most metro Phoenix retail and restaurant workers, teachers, construction workers and firefighters can’t afford a two-bedroom, according to an analysis from Scottsdale-based economic and real estate consulting firm ElliottD.Pollackand Co.

Slightly lower home prices and rents aren’t offsetting inflation and higher interest rates.

Arizona climbed from the state with the 18th highest "housing wage" needed to rent a two-bedroom apartment in 2022 to number 12 this year, according to the National Low Income Housing Coalition’s latest “Out of Reach” report.

The coalition defines its "housing wage" as an estimate of "the hourly wage a full-time worker must earn to afford a modest rental home" at a fair market rent "without spending more than 30% of their income on housing costs." Capping housing spending at 30% of income is a commonly accepted measure of affordability.

“Arizonans deserve a safe and affordable place to live,” said Arizona Department of Housing Director Joan Serviss.

She is co-chair of the Governor’s Interagency and Community Council on Homelessness and Housing, which met for the first time in June.

Serviss said the council’s goal is to find quick solutions to tackle Arizona’s housing affordability and homelessness crisis.

Not making enough to afford a home

The average Arizona renter wage is almost $23 an hour, making rent of almost $1,200 a month affordable, according to the National Low Income Housing Coalition. That's based on people spending no more than 30% of their income on housing.

But the fair market two-bedroom apartment rent in Arizona is about $1,560.

A fair market one-bedroom in Arizona costs tenants $1,290 a month, meaning a renter making the state's minimum wage would have to work about 71 hours a week to afford it.

Last week, hundreds of housing advocates met in Tucson and talked about how to build more much-needed affordable housing at the annual Arizona Housing Forum.

The housing affordability problem is worse in metro Phoenix than in the state as a whole because of higher rents. The average hourly wage needed to afford a two-bedroom apartment in the Phoenix area is $33.50. The average renter wage in the region, though, is $24.20 an hour.

It’s also much tougher to buy a Phoenix-area house. Only 30% of the homes sold in the Valley in this year's second quarter were affordable for households earning the area’s median income.

At the beginning of 2021, the share of homes for sale in the metro Phoenix area that were affordable for median-income households was more than double that — almost 63%, according to the Housing Opportunity Index from the National Association of Home Builders and Wells Fargo.

Mortgage rates climbing above 7% are making it tougher.

Nurses, police officers, firefighters, teachers, service workers and construction workers can’t afford to buy in metro Phoenix’s 11 largest cities, according to ElliottD.Pollackand Co.

Living paycheck to paycheck

Earlier this month, a construction worker who missed one month of rent on a north Phoenix apartment was facing eviction. The 56-year-old shot himself after Maricopa County constables knocked on his door to evict him, according to police.

It was the only time he missed rent at the apartment, according to court records. And at his hearing, the man said it only happened because somebody was late paying him.

He owed his landlord about $1,440.

Landlords moved to evict more metro Phoenix renters in July than any month since the Great Recession. Last month, 7,142eviction cases were filed, according to the Maricopa County Justice Courts.

While Valley rents have dipped slightly from last summer, tenants are still dealing with a more than 25% increase since 2020.

If you are facing eviction or know someone who is, many resources can be found at https://azevictionhelp.org/. Free mental health resources are available to anyone in Arizona. A statewide mental health crisis line is available at 844-534-HOPE (4673). Another resource for 24/7 help is to dial 988.

To find ways to help more struggling tenants, next month Arizona housing advocates are bringing in eviction diversion experts from other cities that have had good results from their programs.

Tackling Arizona’s housing problem

Apartment owners and managers are joining a move to fund more housing people can afford.

The Arizona Multihousing Association is launching a donation program with the Arizona Housing Fund. Landlords that participate will donate $5 for every lease application. Residents can also round up their monthly rent to donate.

“We have far too many people in our state who are living unhoused,” said Tim Sprague, advisor to the housing fund and apartment developer. “The multifamily industry is in the business of housing.”

The annual state housing forum in Tucson was sold out, another sign of how important affordability issues are for so many now.

Arizona allocated $230 million in funds for affordable housing, shelter and services in this year’s budget. That's the biggest amount in state history.

Gov. Katie Hobbs' Interagency and Community Council on Homelessness and Housing, relaunched after it was shut down during former Gov. Doug Ducey’s tenure, meets again next month.

The members range from the head of the Department of Economic Security to elected officials, representatives from the Maricopa Association of Governments and nonprofits big and small from across Arizona.

I was at the first meeting and listened to each member of the council talk, often emotionally, about housing affordability and homelessness problems they are seeing and the people they are trying to help.

I left feeling this is a group that can get things done to help the many people struggling to afford a roof over their heads across the state.

Reach the reporter atcatherine.reagor@arizonarepublic.comor 602-444-8040. Follow her on X, formerly Twitter:@CatherineReagor.

Arizona Republic health reporter Stephanie Innes contributed.

Here's how much income Arizonans need to afford rent and what leaders are doing about it (2024)

FAQs

How much do you have to make to rent a house in Arizona? ›

Good Rental History. Verifiable employment through pay stubs and / or tax returns. Minimum income requirements are as follows: Monthly income must be 3 times the monthly rent amount. Example: Monthly rent is $800.00 = Monthly income must be a minimum of $2400.

What is the hourly income you need to afford rent around the US? ›

Case in point: The 2023 national Housing Wage is $28.58 per hour for a modest two-bedroom rental home and $23.67 for a modest one-bedroom rental home, according to the National Low Income Housing Coalition (NLIHC).

How much of your household income should go to rent? ›

Generally, experts recommend spending no more than 30% of monthly pre-tax income on housing. However, it's not always that simple. According to the U.S. Census Bureau, between 2017 and 2021, over 40% of renter households (19 million) spent more than 30% of their income on rent.

What is the rent to income ratio Dave Ramsey? ›

You should spend no more than 25% of your monthly take-home pay on rent. Spending 30% or more will mean not having enough room left over in your budget to put toward other important financial goals like saving for a down payment on a home.

What's considered low income in AZ? ›

Median Income: $101,300
Classification1 person4 person
Extremely Low (30 %)$21,600$31,200
Very Low (50%)$36,000$51,400
Low (80%)$57,600$82,250

Why is Arizona rent so high? ›

Arizona exemplifies the stress over housing. Over the past decade, the allure of suburban life under cloudless skies has swelled the population of greater Phoenix to five million from 4.2 million, according to census data. The influx pushed housing prices steadily higher.

How much is $20 an hour annually? ›

Frequently Asked Questions. $20 an hour is how much a year? If you make $20 an hour, your yearly salary would be $41,600.

What is a livable hourly wage in America? ›

An analysis of the living wage (as calculated in December 2022 and reflecting a compensation being offered to an individual in 2023), compiling geographically specific expenditure data for food, childcare, health care, housing, transportation, and other necessities, finds that: The living wage in the United States is ...

What is 3 times the rent of $1500? ›

Calculate Three Times the Rent

Multiply the monthly rent by three to find the income requirement. For example, if the monthly rent is $1,500, you would need a minimum income of $4,500 per month to meet the three times the rent rule.

How much should you make to afford $1200 rent? ›

The 30% rule says that no more than 30% of your monthly gross income should go toward your rent. According to this rule, if you make $4,000 a month, you should spend no more than $1,200 per month on rent. Sticking to the 30% rule helps ensure you have enough money left over to save or put toward other expenses.

What is the 50 30 20 rule? ›

The 50-30-20 rule involves splitting your after-tax income into three categories of spending: 50% goes to needs, 30% goes to wants, and 20% goes to savings. U.S. Sen. Elizabeth Warren popularized the 50-20-30 budget rule in her book, All Your Worth: The Ultimate Lifetime Money Plan.

Is 50% of your income too much for rent? ›

Spending more than 50% of your income on rent isn't recommended, as you'll be living paycheck to paycheck. You won't be able to save or invest money for the future. If you're currently overspending on rent, solutions include raising your income, finding more affordable housing, or getting a place with a roommate.

What is a safe income to rent ratio? ›

The gold standard in the industry is 30%, meaning no more than 30% of a tenant's gross income should go to rent. People who spend more than 30% of their gross income on rent are considered to be housing-cost burdened, according to the U.S. Department of Housing and Urban Development (HUD).

How much should I spend on rent if I make 70k? ›

How Much Rent Can I Afford – Chart
Your Annual Salary ($)Monthly Rent ($)
40,0001,000.00
50,0001,250.00
65,0001,625.00
70,0001,750.00
7 more rows
Jan 5, 2023

Is being a landlord passive income? ›

Once you purchase a property, hire someone to manage it for you, and then find quality tenants, your work is done until you choose to sell or rent out that property again. Tenants will pay their monthly rent, and you'll receive this without any work. Your returns on the property become passive income.

What are the requirements for renting in Arizona? ›

All prospective Tenants will be qualified on the following five (5) criteria: 1) Income/employment 2) Credit 3) Rental history 4) Criminal history and 5) Pets.

How much do you need to make to own a house in Arizona? ›

Homebuyers need an annual income of $110,271 to buy a median-priced home in Arizona. That's up 65% from 2020, when it only took $66,712 to buy an Arizona house, according to personal finance research firm Bankrate. Higher home prices, interest rates and insurance costs are why.

Is Arizona good for rental properties? ›

Buying Investment Property in Arizona

We're here to say buying a rental property in AZ would be a great choice. In fact, the Arizona housing market is strong in 2019 and might be considered one of the best states to invest in at the moment.

What is the housing wage in Arizona? ›

At $27.25 an hour, Arizona has the 14th highest housing wage in the U.S. for a one-bedroom. The nonprofit's housing wage is the amount needed to rent a “modest” apartment.

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