There’s a sea of apartments on the horizon for Scottsdale. An article on AZCentral today touts 6,900 units in the pipeline.
It’s too bad AZC and the Republic never have the space or the inclination to really look at the long term effects of such a drastic change, nor that most of these projects got massive zoning concessions.
The only-slightly more skeptical Phoenix Business Journal reports in an article from May:
Despite robust demand for apartments, some real estate experts are concerned that the nearly 19,000 new units planned for the Phoenix market over the next 36 months will result in too much inventory.
Demand for housing is a good thing, but it is a symptom of success rather than a cause of it. Better to let the demand lead the supply instead of the other way round. Ditto on the infrastructure it will take to provide service to these new residents.
Most importantly, our home values all go down when the supply increases. After all, a dwelling unit is a dwelling unit, and many of these apartments are going to compete with single-family home rentals; which are never mentioned in either article.
You may also recall an earlier article I wrote on development fads like this current apartment trend in which I quoted an expert as saying that developers build what they can finance, regardless of the demand.