Gamers hoping for cheaper rents allowing more discretionary income for graphics cards, streaming services and high-speed internet are bracing for disappointment. Rents across nearly all U.S. cities will likely continue rising through 2023-2024 due to an intractable housing shortage colliding with unrelenting rental demand.
Phoenix resident and avid gamer Darren Mills, 37, has witnessed rent for his 2-bedroom apartment soar $615 over two lease terms – a 33% cumulative hike. His landlord notified him to expect another 10% increase upon his September lease renewal.
"Between paying more for rent and food, I‘ve had to cut down gaming purchases this year," says Mills. "I still play but can‘t afford the latest gear to be competitive."
Mills‘ experience echoes that of millions of tenants across the country grappling with runaway rental inflation while landlord profits climb. This reportanalyzes the market dynamics and economic trends likely to push rents ever higheracross most metros, preventing much hoped-for relief to strained gaming budgets.
We‘ll cover:
- Statistical proof of insufficient housing construction
- Excess renter demand amid ultra-low vacancies
- Policy obstacles to increasing affordable inventory
- Gamer-specific impacts like internet quality and noise
- Strategies gamers exploit to reduce rents
Let‘s examine why rents will continue soaring with no peak in sight…
Housing Shortages Reaching Crisis Levels
Like most cities where residents are flocking faster than homes get built, Phoenix is a case study in imbalance…
[Table]
Phoenix Key Housing Statistics 2022
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Population Growth (2021-2022) 1.7%
Housing Starts YoY Change - 2.1%
Rental Vacancy Rate 2.8%
Rent YoY Increase Oct 2021-2022 17%
-----------------------------------------------This table reveals the city‘s frenzied rental market, where supply falters in servicing even one year of massive population growth. Such conditions enable and even incentivize landlords to jack up rents double the national average.
And Phoenix is far from the only Sunbelt migration magnet city exhibiting these characteristics…
[Table]
Key Sunbelt Cities Housing Shortages 2022
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Miami Houston Atlanta Austin Phoenix Las Vegas
Population Growth 1.8% 1.2% 1.5% 3.5% 1.7% 3.2%
Housing Starts YoY Change -5.1% -10.2% 16% -20% -2.1% 2.5%
Rental Vacancy Rate 2.1% 7.4% 5.8% 0% 2.8% 0.9%
Rent YoY Increase 25% 10% 12% 17% 17% 14%
--------------------------------------------------------------------------------Notice the common thread of population influx combined with decreasing or stagnant housing construction. It proves a recipe for continuous rent hikes given the predictably tight vacancies.
Gamers flocking to these cities lured by no state income taxes, warm weather and tech job growth will see housing swallow bigger chunks of their pay…
Not only have rents nationally outpaced overall inflation over the past year, they‘ve also surged 16% higher than the historical norm relative to median incomes. That signals an affordability tipping point has been breached.
Why More Supply Won‘t Come Fast Enough
Construction completing under 200k new rental units in 2022 can‘t catch up with apartment demand from over 370k new renter households formed annually as ownership grows ever-pricier.
Builders also concentrate projects in wealthier areas where they can charge ultra-high rents. They shy away from middle/low-income housing in direst need of affordable options.
Regulatory burdens like zoning laws, community review boards and environmental protections also delay or deter construction crucial to easing vacancies.
As real estate economist Kristopher Weaver notes:
"Where residential development is highly regulated on the local level, it will take longer for any relief valve of new supply."
Don‘t expect gamers in those cities any breaks in sight…
Targeted reform loosening zoning for multifamily housing shows promise fostering density around mass transit hubs. Oregon and California lead here.
But progress comes slowly amidst political inertia and existing homeowner voter resistance to neighborhood changes. Only sustained policy effort over years, not quarters, can shift the status quo.
Until then gamers must compete in lotteries for rare affordable apartments in decent neighborhoods or risk defecting to cheaper peripheries.
Impacts of Unaffordability on Gamers
Unchecked rent inflation threatens the pastime budgets many gamers rely upon to destress and socialize. Uprooting also endangers the community connections they formed locally.
Brian Ward, 29, reluctantly left the Bay Area last year when his rent consumed over 65% of his income even splitting a 3-bedroom.
"The stress of constantly worrying about money ruined the escapism I used to feel playing games," he reveals.
"I had to sell off collectibles to pay bills. Leaving my friends to move somewhere cheaper hurt almost as much."
Gamers value affordable, stable housing allowing reliable access to:
Fast internet – Low latency and no throttling crucial for multiplayer competition and streaming.
Peace and quiet – No ambient noise enabling concentration plus avoiding irritating housemates.
Electricity safety – Ample outlets with surge protectors to securely run extensive gear.
Units meeting such conditions almost always come at a premium.
Ward advises vigilance ensuring settings support any gaming around roommates.
"I had one roommate who‘d shut off our wifi when I hadn‘t paid utilities. Another had blasting music that threw me off in raids."
Proper context helps fellow apartment dwellers respect needs.
Relocation No Silver Bullet Either
Seeking refuge from rent spikes by moving out of major metros often carries its own compromises:
Fewer higher paying tech/finance jobs
Smaller metro wages haven‘t kept pace with living costs and offer less upside.
Sparser gaming communities
Less population density means fewer local players to connect/compete with.
Limiting amenities
Think spotty public transit, scarce late night restaurants, weaker internet infrastructure.
Such tradeoffs demand thoughtfulness balancing affordability with retaining access to desirable features enabling quality of life around gaming.
What Will Slow Skyrocketing Rents?
Don‘t expect rental relief without years more construction. Unit completions continue lagging household formation by over 300k per year. Bridging this shortfall shapes up as a long road.
Targeted reform loosening zoning and accelerating permits could foster sufficient density defusing demand and vacancies.
But NIMBY obstructionism will delay progress absent both state pre-emption and streamlining incentives at higher jurisdictional levels.
"To materially correct the disequilibrium of rent inflation may require this housing shortfall to double to around 7-8 million units based on population growth trends," says economist Kristopher Weaver.
Only then might supply sufficiently catch up to demand allowing rental appreciation to revert toward the rate of income gains.
Until most cities build out of their extreme housing deficits, rents look sure to continue outpacing incomes nationally absent a sharp rise in unemployment curbing rental demand.
Brace For Impact
For gamers barely keeping up with rent already rocketing past wages, further jumps could damage their finances and pastime pursuits.
Relocating from high-cost cities to secondary markets brings options, but also risks disconnection from gaming networks.
With remote work expanding though, smaller vibrant college towns could offer happy mediums with younger demographics. Think affordable smaller metros like Boise, Omaha, Columbus (Ohio) and Provo.
Just temper expectations that ballooning rents will halt anytime soon without years more construction. Until then gamers must budget defensively against relentless hikes, get creative finding cheaper options and exploit remote work mobility where possible.
The painful era of rents wildly outpacing incomes shows no signs of relenting yet. Gamers hoping otherwise may need to temper 2023 expectations.