In recent years, Arizona experienced one of the largest rent increases in the country. Maricopa County experienced a 46% rent increase between 2020 and 2022, making it the highest rent increase per occupancy rate change across the nation. The rapid increase in rental amounts was especially challenging for rental assistance programs.

Often, the rental amounts authorized for housing programs by State and Federal funders, also known as Fair Market Rents (FMRs), lag behind the market. In 2022, HUD made a concerted effort to ease the strain on housing programs and provided an update to the FMRs that more accurately reflected current market conditions. The FMR in Maricopa County was increased by 35%, the second highest increase in the country. With these increases, we were able to drastically increase our payment standards and pay competitive and reasonable rents.

In the fall of 2023, the market began to stabilize and has softened quickly – rent and occupancy rates have both dropped by over 3% year over year. Federal and State regulations and guidelines require rent amounts for rental assistance programs to be both reasonable and no more than what unassisted renters pay in the market. As the rental market continues to shift, it is our responsibility to ensure that we are not overpaying for units in the market. We have a fiduciary duty to be good stewards of these public resources.

As such, HOM will not approve rent increases for lease renewals on existing tenancies in Maricopa and Pima Counties. Rental amounts will be approved at or below the rent charged on the current lease.

Rents for new leases will need to match these amounts to qualify for assistance in the programs. We encourage property owners and managers to review the market rental amounts for similar units. Please take the opportunity to review and update your property’s profile in Padmission. This will ensure a quick, easy lease-up process to address the growing vacancy rate HOM partners are experiencing.

Because of the tight market Arizona has experienced over the past half decade, HOM has been at the forefront of advocacy for higher FMR amounts and more profitable solutions for our owner and operator partners. HOM and our service provider partners will continue to work diligently with our owner and operator partners to ensure rents remain fair, occupancy levels remain high, and tenants maintain their housing to ensure everyone in our community can have a place to call home.