News Summary
Phoenix has dropped to 94th place in national rental rankings, a stark fall from 72nd due to high living costs and decreased job growth. Despite upscale housing options, affordability remains a critical concern as air quality worsens and a housing crisis looms. New rental tax laws aim to provide relief, but economic implications of these changes pose challenges for the region’s attractiveness to renters.
Phoenix Experiences Significant Decline in Rental Rankings
As of April 2025, Phoenix has fallen to 94th place in the latest ranking of the best U.S. cities for renters, according to an analysis by RentCafe. This is a notable drop from its previous position at 72nd in 2024. The rankings evaluate cities based on the cost of living, housing options, job growth, and other factors that affect renter satisfaction.
The cost of living in Phoenix now stands at 6.2% above the national average, further compromising its appeal as a desirable location for renters. Job growth in the area has also taken a hit, decreasing by 0.3% over the past year compared to 2.2% growth the previous year.
Housing Market Insights
Metro Phoenix features a considerable amount of upscale rental units, with 48.3% of apartments classified as high-end and 17% of them being newly built. Despite the diversified housing options, the average rent for an apartment in this area is around $1,500 per month. Even with the recent bad news of declining rankings, the real estate market has seen a thriving entrepreneurial spirit with 202 business applications registered in April 2025, up from 188 the previous year.
Environmental Concerns and Rent Relief
One of the significant factors impacting Phoenix’s desirability is its worsening air quality score which dropped to 70 in 2025, compared to a much healthier score of 18 in 2024. This decline is added to the backdrop of a growing housing crisis; Arizona faces a shortage of 65,721 housing units worsened by a staggering rent increase of 72% in recent years.
The new rental tax law effective January 1, 2025, prohibits cities from levying taxes on rent, aimed at offering some relief for renters financial strains. The previous rental taxes ranged from 1% to 4%, averaging about 2.5%. Although renters will save an estimated $38 monthly, the overall impact on affordability remains questionable.
Economic and Revenue Implications
Cities across Arizona are expected to face about $230 million in lost tax revenue as a result of the rental tax ban. The law does not extend to short-term rentals like hotels and Airbnbs, which will still incur transient lodging taxes. The League of Arizona Cities and Towns is currently considering alternative funding methods to mitigate these revenue losses.
Comparative Ranking Context
When comparing rankings, McKinney, Texas, was named the best city for renters in 2025, followed closely by Sarasota, Florida, and Atlanta. In stark contrast, cities like Anaheim, California, Sunnyvale, California, and Queens, New York were deemed the worst for renters. Notably, New York boroughs rank at the bottom of the list primarily due to their exorbitant costs, despite job market advantages and other living perks.
Conclusion
Overall, Phoenix’s decline in renter rankings highlights the complexities faced by residents amid rising living costs, declining job growth, and worsening environmental conditions. While recent legislation provides some tax relief to renters, many market factors still contribute to an ongoing housing affordability crisis in the region. The situation requires further analysis and possibly strategic interventions to restore Phoenix’s status as a favorable place for renters.
Deeper Dive: News & Info About This Topic
HERE Resources
Top Neighborhoods in Phoenix for Quality of Life Revealed
Phoenix’s Transformation: A Flourishing Urban Landscape
Phoenix Suburb Ranks as Second-Fastest Growing City in the U.S.
Top 10 Private Schools in Arizona Announced for 2025
Midwest Rental Markets Flourish Amid Changes in Phoenix
Chandler Emerges as Arizona’s Leading Small Business Hub
Additional Resources
- AZ Big Media: Best Cities for Renters in 2025
- AZ Central: Phoenix Falls on Best Cities to Rent List
- Axios: Arizona Rental Tax Ban Impact
- ABC 15: New Legislation Eliminates Rental Tax in Arizona
- Kiplinger: Arizona Rental Tax Repeal in 2025
Author: STAFF HERE PHOENIX WRITER
PHOENIX STAFF WRITER The PHOENIX STAFF WRITER represents the experienced team at HEREPhoenix.com, your go-to source for actionable local news and information in Phoenix, Maricopa County, and beyond. Specializing in "news you can use," we cover essential topics like product reviews for personal and business needs, local business directories, politics, real estate trends, neighborhood insights, and state news affecting the area—with deep expertise drawn from years of dedicated reporting and strong community input, including local press releases and business updates. We deliver top reporting on high-value events such as the Waste Management Phoenix Open, Cactus League Spring Training, and Arizona State Fair. Our coverage extends to key organizations like the Greater Phoenix Chamber of Commerce and Visit Phoenix, plus leading businesses in technology and healthcare that power the local economy such as Intel and Banner Health. As part of the broader HERE network, including HERETucson.com, we provide comprehensive, credible insights into Arizona's dynamic landscape.
