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Rising rents driving out families, affecting classrooms in Tucson

Wednesday, January 08, 2020   /   by Adam Donaldson

Rising rents driving out families, affecting classrooms in Tucson

Article originally posted on Tucson.com on January 6, 2020

Rocio Villa’s plans were foiled last spring when the apartment complex where she lived on Tucson’s southwest side suddenly increased the rent $250 per month.

Villa had become a single mom a couple of years earlier and was training for better work, but she still needed to pay for a final skills test.

With the increased housing costs, she found herself deciding between groceries and utilities. The family even tolerated living without electricity for a while because she couldn’t afford food if she paid all her bills.

The new job as a medical assistant was on hold as she tried to figure out how to stay put — and to help her kids see out the end of the school year.

Rising rents in Tucson are forcing a number of Tucson families, like Villa’s, to relocate. And when these families have to move, their children often have to switch schools, disrupting their educations.

In some neighborhoods, when rents rise quickly in large rental complexes near a school, a number of students might suddenly have to leave their classrooms at once.

Mapping by the Arizona Daily Star shows that two school districts have been hardest hit by evictions, which are a reflection of Tucson’s housing crisis for lower-income residents: Tucson Unified and Amphitheater Unified.

TUCSON’S RENTAL MARKET Over the last year, the cost for a rental unit in Tucson increased by an average of $53 per month, though some apartment complexes saw rent increases in the hundreds.

Price increases have been building for a while. In 2014, for example, the average monthly rent in Tucson was just under $640. By the first quarter of 2019, it had jumped to just below $800. By the third quarter of last year, it was up to $820, according to data from Picor Commercial Real Estate Services.

Why the boom? Out-of-state buyers are purchasing countless properties.

Big employers like Caterpillar, Hexagon Mining and Amazon, along with the Raytheon Missile Systems’ expansion, have improved Tucson’s economy and added higher-paying jobs to the marketplace, said Picor’s Allan Mendelsberg.

What’s happening with the apartment market, and what’s available for families, all funnels back to that, he said.

“The strengthening economy is giving investors the willingness to improve properties and take them to the next level,” he said.

About 80% of the investors are from out of state. They are looking to Tucson because there’s a better return on investments here.

So many rental properties have been bought out in recent years that the demand is now exceeding the supply, Mendelsberg said. 

THOUGHT IT WAS A JOKE When Christina Moreland first saw the notice that she and her children had a couple of months to vacate their home, she thought it was a joke.

Her lease at the apartment building on East Fifth Street wasn’t up until June 2020. Moreland found the notice in late November, the day she came home from the hospital after giving birth 10 weeks early to twins. The newborns were still in the hospital. The apartment complex’s new owners gave similar notices to other tenants when ready to remodel any occupied unit.

“It’s pretty rough,” Moreland said. “It sucks, especially around the holidays.”

She and her boyfriend have until Jan. 31 to find a new place for them, the premie twins, a rambunctious 3-year-old and Moreland’s nephew who lives with her and is in fifth grade at Sewell Elementary, less than a mile away.

Moreland works full time as a manager at a hotel and her boyfriend stays home with the kids. She went back to work earlier than planned since she would need the extra money to move. She wasn’t sure how she was going to manage the cost and hassle of moving while also dealing with her newborns.

The apartment building, newly renamed The Marquee on 5th, was owned by HSL Properties until The Wildcat Group bought it earlier this year. The new management sent out a letter on Aug. 26 saying they would be beautifying the complex, according to Director of Operations Tyrel Hullum, who would not provide the Star with a copy of this letter. 

EVERYONE HAS TO LEAVE Wildcat Group specializes in purchasing “distressed properties … beautifying Tucson, one apartment at a time,” said Jessica Lopez, portfolio director who oversees property management of the company.

If tenants wanted to stay at The Marquee on 5th, the complex where Moreland has been living, they have the option to apply for one of the upgraded “luxury apartments,” she said. To be considered, they would need to make three times the amount of the new rent.

The units are advertised on arizona.uloop.com, an online classifieds listing associated with the University of Arizona, as renting for $864 for a one-bedroom and $1,064 for a two-bedroom.

That’s a $164 increase from the $900 Moreland and other tenants in the complex said they’ve been paying for two bedrooms.

Lopez said the company asks people to move in the middle of a lease if it is ready to remodel that unit. In this case, Wildcat Group gives the tenant a month free rent, she said. It also calls and emails residents to let them know their options.

Moreland has a year lease that’s good until June 1. The first notice she got in August about beautifying the apartments did mention the option to move units, but three months later when she got the notice that she had 30 days to vacate or risk eviction, she figured that was her only choice. She thought if moving into another apartment was still on the table, the managers would tell her that. She wanted to speak with them but said her work schedule is hectic and when she gets home, the office workers are already gone for the night.

A Star reporter spoke with about a dozen residents in the complex. All were planning on moving out because of the increase in rent. A number have children at the neighborhood schools and just hope they won’t be asked to move until the end of the school year.

There were previously a number of residents at the complex on Section 8 vouchers to help them afford housing. But Wildcat Group is not accepting the vouchers and most of those families have already moved out.

Lopez said Wildcat Group provided these residents with a list of Section 8 housing in the area. None of the four places on the list had any units available and one did not accept Section 8 at all.

“Everyone in the apartment has to leave,” Lopez said. “No one can actually afford the increased rates since the transformation.”

CHILDREN’S STUDIES ARE DISRUPTED Moreland’s nephew, 11-year-old Jaden, said he had two friends he knew from the apartment complex and Sewell Elementary who already had to leave.

Moreland didn’t know where her family would move or if Jaden would even stay in Tucson Unified School District. He was new to Sewell at the beginning of the school year. He got involved in orchestra and was feeling comfortable. Moreland is concerned switching schools in the middle of the year will affect his ability to learn and set him behind his peers.

So far seven Sewell students who lived in the apartment building have left the school. Another 15 students, including Jaden, live in the complex, according to TUSD.

Moving in the middle of the school year is disruptive to a child’s education, said Ernest Rose, TUSD assistant superintendent in the region. Children have to adapt to a new environment and work to catch up, he said.

Sewell is a B-rated school under the state’s accountability system. At about 280 students, it’s a small school and has low staff turnover, Rose said.

It’s a desirable school, said Principal Rob Jewett.

“Families want to come here,” he said. “These families are put in positions where they can’t go to the first school of their choice.”

The first students to leave because of the rent increase at The Marquee on 5th were three brothers, in second, third and fifth grades, Jewett said. He said the kids were doing great at the school.

Sewell is within walking distance, which helps families who do not have transportation.

John B. Wright Elementary is another school that’s been affected by rising housing costs. It has a high transient population, in part because the rents are going up near the school. The school has a 50% mobility rate, which means half the student body transitions during the school year, either leaving the school or starting at the school, said Principal Deanna Campos. That means kids come, try to fit in, and soon they’re gone, she said.Campos said it’s not new that families move because of rising rents but this school year seemed especially bad.

It’s devastating for families to move midyear, she said. She wishes that new complex owners would take into consideration the end of the school year before they raise the rent.

PREVENTION JUST ISN’T FUNDED When Rocio Villa’s rent was increased, leading her to go without electricity rather than forgo food, she shared her predicament with a teacher at Mary Belle McCorkle Academy of Excellence PK-8 School on South Mission Road, where her kids went to school at the time.

That’s where she learned Our Family Services might be able to help.

“It was just a phase, a very troubled time,” Villa says, looking back on those months. She’s now working as a medical assistant and renting a new property.

“I’m just glad we got through it and we’re all OK and we’re safe.”

Villa was fortunate. When she contacted Our Family Services and asked for help, she got linked to a caseworker and received enough financial help to get her through that hard transition.

The program she enrolled in helped her avoid homelessness and get her kids through the year without switching schools. The local nonprofit is one of a few Tucson organizations providing services for families that are homeless or at risk of homelessness. But with Tucson’s changing rental market, there’s not nearly enough funding to help every family that needs it.

For the most part, “Prevention just isn’t funded,” said Laurie Mazerbo, chief program officer for Our Family Services.

What’s needed now is better data to “understand the ebbs and flows of issues around housing crisis and prevention experiences,” said Liz Morales, Tucson’s new housing director.

Morales said the city plans to do a housing study with the University of Arizona’s Eller College of Management in the spring.

“We need to have a better understanding of what’s happening,” she said, “so we can have a better response to it.”