Phoenix-area residents were more than twice as likely to lose a home to eviction or foreclosure than the typical U.S. resident before COVID-19 hit, and the rate of housing loss is expected to climb significantly because of the pandemic as well as rising home prices and rents, according to a new study.
The hardest hit areas for homeowners and renters were neighborhoods in west and south Phoenix, where poverty and unemployment rates are some of the highest in the region, according to the report by New America, a Washington, D.C.-based think tank.
Maricopa County had one of the highest housing loss rates in the country between 2014 and 2018, the report said.
And the gap between what Phoenix-area residents earn and what they pay for housing has been growing rapidly in the past few years, putting the squeeze on many more renters and homebuyers, according to The Arizona Republic’s reporting.
“The New America findings aren’t a big surprise but do validate in another quantitative way a growing community problem for the Valley,” said Mark Stapp, growth expert and director of the Master of Real Estate Development program at ASU’s W.P. Carey School of Business. “Our affordable housing problem is worse than most people realize.”
A top goal of the study, titled “Displaced in America,” was to identify U.S. areas with the most acute housing losses to predict where the COVID-19 crisis will hit renters and homeowners the hardest. Metro Phoenix is named as one of those areas.
Maricopa County’s housing problem
Maricopa County residents experienced housing loss at a rate of 4.5%, more than double the national average, according to New America.
That makes the county that includes Phoenix the 46th-worst county for evictions and foreclosures in the U.S. Pima County, the home of Tucson, ranked No. 102, with a 3.8% rate.
Petersburg, Virginia, had the highest housing loss rate at 12.1%.
New America’s research combines an area’s eviction and foreclosure data and averages it with population numbers to create an overall housing loss rate. For the Maricopa County analysis, it worked with Arizona State University’s Knowledge Exchange for Resilience Center.
The study tracked 2,221 U.S. counties from 2014-2018, where enough foreclosure and eviction data was available to get an accurate measure. Among the findings for Maricopa County:
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About 17,550 households were foreclosed on during the four-year period tracked. That’s a rate of 2.8%, twice the national average.
Census tracts with a large number of Hispanic, Black and single-parent households were the hardest hit by housing loss.
Neighborhoods around Sky Harbor International Airport had the highest foreclosure rates, at nearly 7%.
About 182,425 renters were evicted, a 6.2% eviction rate that is almost 2½ times the national average. That figure could be higher because of some incomplete eviction filings, reports the think tank.
The areas with the highest eviction rates were in the Maryvale community in west Phoenix and the Westridge Park neighborhood in south Phoenix. One in every three renters in those areas was evicted each of the five years analyzed, according to the study.
Evictions spike in the summer months, with July the top month for evictions.
The hardest hit metro Phoenix ZIP codes for unemployment this year have historically had high eviction rates, according to the think tank.
The census tracts around Sky Harbor had between 7,000 and 10,000 unemployment claims between March 14 and July 30, according to the Maricopa County Association of Governments. Eviction rates were as high as 14% in those neighborhoods during 2014-2018.
“Evictions are part of a bigger issue,” said Tempe Mayor Corey Woods during a national meeting discussing the study on Wednesday. “We need to get to the instability behind evictions, and look at people’s finances and the lack of affordable housing. Clearly, the eviction moratorium isn’t a long-term solution.”
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COVID-19 has hit renters, typically making less than $50,000 a year, the hardest because their jobs have been the most impacted, and they don’t have enough savings to fall back on, economists say.
Eviction bans in Arizona and a new federal ban imposed by the Centers for Disease Control and Prevention last week are expected to help renters keep their homes this year.
But starting in January 2021, renters could owe all the back rent they missed and face eviction again.
Housing advocates and the New America researchers say Maricopa County has an eviction system tilted toward landlords.
“When I looked at (Maricopa County) eviction court data, I was surprised at the stark gap in who gets a lawyer and who doesn’t, and the impact this has,” said Yuliya Panfil, director of New America’s Future of Property Rights Program and an author of the report. “We found that 87% of landlords had a lawyer representing them in eviction court, but less than 1% of tenants did.
“Unsurprisingly, 99% of the cases for which we had judgment information were decided in favor of landlords. To me, this is a clear imbalance that should be rectified,” she said.
Sheila Harris, the first director of the Arizona Housing Department, said Arizona’s eviction laws long have favored landlords, and there needs to be a shift to help more renters in the courts now.
“We need to even out the system of evictions between landlords and tenants,” said housing advocate Harris. “The best thing to do to prevent homelessness is to help people not lose their homes.”
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How to slow housing loss
Patricia Solis is the executive director of ASU’s Knowledge Exchange for Resilience Center, which did interviews for the study with many housing advocates, developers and government officials in metro Phoenix.
“By finding the drivers of housing loss in Maricopa County and working on those issues, we can become a more resilient area for growth,” Solis said.
She said everyone in the region needs to understand they have a stake in the area’s housing loss problem.
New America’s recommendations for metro Phoenix to address its housing loss issues come from research as well as recommendations from ASU’s work. They include:
Improve housing loss data by creating more easily accessible public eviction, mortgage foreclosure and tax foreclosure databases.
Increase wages to keep pace with rising housing costs and expand social benefits to reduce costs of health care, child care and transit.
Expand affordable housing options through voucher programs, trust funds and tax credit programs.
Support more projects that help blighted neighborhoods.
Improve tenants’ legal rights and education about the eviction process and provide renters representation in court.
Reconsider state laws that limit local affordable housing development, the minimum wage and regulation of short-term rentals.
Panfil said, “The CDC (eviction) ban basically gives officials 3½ more months to get their act together before evictions really get going. Hopefully, some of our findings will help them decide where to target outreach and assistance.”
Reach housing reporter at Catherine.Reagor@arizonarepublic.com or 602-444-8040. Follow her on Twitter @Catherinereagor.
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AUTHOR: Catherine Reagor