Trump’s wall and Tucson Real Estate.

No one has any idea if the United States is actually going to build the Great Mexican Wall. However, even if the Wall doesn’t get built we’d expect border security to tighten over the next four years. How will this affect Tucson real estate prices?

3D rendering of the flags of USA and Mexico on woven fabric texture.

What does the Tucson real estate market look like in 2016?

Our simple answer is not great. Median home prices have decreased by over 18% over the last 10 years. The real estate picture gets a little less depressing if you look at median home prices over the last 5 years, which show an appreciation of 3.5%. Don’t get too excited though, nationally homes have appreciated over 16% over the last 5 years. In comparison to national averages the Tucson real estate market is worse off. How can this be?

What’s hurting Tucson real estate prices?

There are two big factors that we feel are hurting Tucson the most: unemployment and crime.

The unemployment rate in Tucson is 6.1% compared to the national avg of 5.2%. High unemployment never helps housing prices, but this coupled with slow job growth leads to market stagnation. Job growth over the last 12 months in Tucson is less than 1%. Tucson has high unemployment and almost no job growth. Both of these factors have helped derail any real estate market improvements.

Tucson and Crime

A high crime rate is also dragging down Tucson real estate prices. The FBI tracks violent and property crimes, rating them on a scale of 1-100 ( from low crime to high crime). Crime rates in Tucson are higher than national averages for both violent and property crimes. The national average is 31 for violent crimes and 38 for property crimes. Tucson scores a 58 in violent crimes and a 70 in property crimes. High crime rates coupled with high unemployment rates have kept the brakes on Tucson real estate prices, which begs the question of whether a decrease or a perceived decrease in crime will help real estate in Tucson.

Positive influences on Tucson real estate.

Tucson real estate has had a tough time of it in the last ten years. Median home prices are down close to 20% and both high unemployment and high crime rates have contributed to decreasing home prices. However things aren’t all bad in Tucson. It’s pretty hard to complain about the weather most of the year, which has made Tucson a mecca for those who worship the sun.

The great weather in Tucson had led to 31% population growth since 2000. However, Tucson still has low population density. The current population density of Tucson is just over 2000 people per square mile. In comparison the population density of Phoenix is over 3000 people per square mile. The increased population density in Phoenix has led to increased demand for housing, pushing the median home price up over 16% in the last five years. In comparison the median home price in Tucson is up less than 4% in the last five years. The Tucson real estate market is going to need more demand if it is going to recover. Increasing population will create this demand.

Will Trump’s Great Wall help Tucson?

The immediate answer is maybe, in the short term.

The construction of the Wall would create thousands of short-term jobs. This will significantly help Tucson labor markets. The Wall will create local jobs and serve as an incentive for people to move to the area. These jobs might not be around forever but in the short term it will increase employment and population. Hopefully once people come they’ll stay.

The impact of the Wall on crime rates is more of an unknown. Our guess is that crime rates would remain about the same. Although some Trump fans might anticipate lower crime rates, the increased population density from the influx of labor to build the wall coupled with the question of what happens after those short-term jobs are terminated might have the opposite effect.

What about Tucson’s demographics?

When I think of Tucson, I think of seniors, sun, and golf. However the numbers don’t indicate a large senior population. The median age in Tucson is 33. In comparison the median age in the US is 37. To grow its population Tucson needs to attract more retirees and older Americans.

Tucson benefits for retirees:

  • Great weather, with an average of 286 days of sun a year.
  • Golf–there are over 40 golf courses in the Tucson area.
  • Low cost of living, at 4.8% lower than the national average.
  • Low real estate costs.

We’d argue that one of the primary reasons that the senior population in Tucson is not larger is because of a perceived lack of security in the area. This perception is most likely tied to relatively high crime rates, assumptions regarding the area’s proximity to Mexico, and heavy reliance on Fox News as a news source. In some people’s minds Trump’s Wall helps solve both of these issues. The Wall may well have a positive impact on senior population growth if seniors feel more secure once the Wall has been installed. Whether or not it would actually increase security is a different matter. This last election showed us that fact and fiction are often at odds, and that fiction often prevails. In addition, if there was an increase in the senior population, there might be a corresponding off-set by a decrease in the Latino population.

Tucson’s demographics: the Latino population.

Over 42% of Tucson’s population is Latino. The area is closely tied to Mexico in proximity and demographic make-up. Building the Wall along the border with Mexico will not have a positive impact on US/Mexican relations. It’s impossible to play out all the possible scenarios but we’d anticipate a negative impact on the Hispanic population. We also feel that this negative impact would outweigh any positive impact on retirees moving to the area. It’s impossible to flesh all these numbers out but we’ll get to see first hand what the future holds. Hopefully Trump won’t build a Wall and will instead use US resources to improve education, increase access to quality health care, and to fight global warming. If he does build the Wall, Tucson will be at the vanguard of whatever impacts it will have on the rest of the United States, and the world.

 

 

Tucson Landlord FAQs: The Death of a Tenant

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If you own a rental property in Tucson–or any where else for that matter–it’s not out of the realm of possibility that one of your tenants will pass away during the term of his or her lease. Your obligations and duties will vary depending on a few different factors. Here are some FAQs about Arizona requirements for what happens when a renter dies to help clarify things:

My tenant died, but she was married and living with her spouse in the rental unit. Do I have to do anything?

According to experts, no. The surviving spouse will remain obligated on the lease, and will be responsible for taking care of the deceased tenant’s property and other personal items.

My tenant died, but he lived with a roommate/co-tenant. What should I do?

The remaining tenants will likely remain obligated on the lease if it was “jointly and severally liable” unless there was a provision that the lease terminates upon the death of a tenant. If the remaining tenants are still liable for the full amount of rent, they can likely seek reimbursement for the deceased tenant’s share of the rent from the deceased co-tenant’s estate.

You may be in a bit of a sticky situation as to the deceased tenant’s property. The deceased tenant’s estate now owns the deceased tenant’s property, not the co-tenant. You and the remaining tenants will have to work with the executor of the estate to ensure that the deceased tenant’s property is removed according to law. If the remaining co-tenants wish to stay in the rental unit, they will be motivated to cooperate with the renter’s estate–after all, they want to be reimbursed for rent, and they’ll want the deceased tenant’s personal items removed if they wish to bring in another roommate.

Make sure that you don’t allow access to the unit to any unauthorized persons, and don’t remove any property. People authorized to removed property would include the administrator or executor of the estate. Don’t assume family members, such as parents or siblings, have access. Require documentation from the court.

My tenant died. She lived alone. What should I do?

First make sure the rental unit is secure, and that no unauthorized people can enter. This will require entering the property, and possibly re-keying the locks. Typically landlords must give two days notice, but the death of a tenant is an exception to that rule as it is considered an emergency. Take photographs of the rental unit to document what personal items were present.

As stated above, only the executor or administrator of the deceased tenant’s estate should enter the rental unit, so require court documentation of whoever makes that claim. Don’t assume that siblings, children, or parents of the tenant are authorized. Families can be messy, especially when there’s a death. Requiring the proper paperwork protects you.

The tenant’s estate will be responsible for paying rent through the end of the lease term but consider negotiating an early lease termination date with the executor or administrator of the estate. If you can’t agree on a termination date, you’ll be required to make reasonable efforts to find another tenant. As always, document those efforts.

Can I insert any provisions into my lease agreements that would make this process easier?

Yes! Section 33-1314(f) of the Arizona Landlord Tenant Act allows the landlord to request in the lease agreement the name of a person the tenant authorizes to enter the tenant’s rental unit and retrieve and store the tenant’s property if the tenant dies. If the landlord is unable to reach the named person at the contact information provided, or if the person fails to respond within 10 days of the first contact, the landlord may dispose of the deceased tenant’s property as provided by law (see Section 33-1370). There are other provisions in this section (including a requirement that you require valid identification from any individual claiming to be the person named in the lease), so make sure you read the whole section, and consult with an attorney if you have any questions.

More information: Resources for Tucson Landlords

As with any other written articles on this website, under no circumstances whatsoever should this be considered legal advice in any way, shape, or form. Got it? Capiche? We are not attorneys licensed to practice in Arizona. If you have any questions at all, please consult with a licensed attorney. 

 

The Best Resources for Rental Owners in Tucson

Online Resources For Landlords: A Good Thing

If you own rental property in Tucson, having reliable resources can be the difference between a successful and lucrative rental business and a nightmare. From your team of maintenance and repair contractors to the resources you use when you’re thinking about evicting a tenant, you want to be confident in the resources you’re relying on.

So we’ve pulled together some online resources for your rental property business in Tucson. While we can never guarantee that an online resource is always accurate and always updated, this list is a good place to begin when you’re looking for answers.

The Fair Housing Act

Landlords and rental owners in Tucson are governed by the Fair Housing Act at both the federal, state, and local levels. Here are the fair housing laws you need to be familiar with:

The Federal Fair Housing Act prohibits discrimination based on race, color, sex, religion,national origin, familial status or disability.

Although most states add additional classes of people to be protected under fair housing laws, the Arizona Fair Housing Act does not add additional protected classes.

Under Tucson’s Human Relations Ordinance, it is illegal to discriminate based on race, color, national origin, ancestry, disability, age, sexual orientation, gender identity, religion, sex, familial status, or marital status.

Arizona Landlord Tenant Act

The Arizona Landlord Tenant Act governs residential rental units and the rights, duties, and obligations of landlords and tenants.

The University of Arizona Law Library is an excellent resource for information on the Act, with useful FAQs on subjects such as security deposits and rights of entry.

Other Useful Resources

There are several organizations at the national, state, and local levels that are available to help landlords comply with the various laws that impact them. The Arizona Multihousing Association offers classes on landlord tenant law, fair housing law, and other topics. In addition, the Association offers forms.

Although it might seem counter-intuitive, it’s often helpful to look at tenant’s rights organizations because they lay out landlord obligations clearly and in plain english. An example is the Tenant’s Rights and Responsibilities Handbook which is available on the Arizona Attorney General’s website.

Conclusion

The quality of your online resources is obviously important. And it can seem like there’s an overwhelming amount of information to digest and stay current on. Always remember that if your rental property business seems like it’s requiring too much maintenance, you can always hire a reliable property management company to help you, for a fee of course.

Do you have any resources that work particularly well for you? Let us know!

*As always, none of the advice here is intended as legal advice, because we’re not licensed attorneys in Arizona. In addition, we cannot vouch for the accuracy of the information on the websites above as information changes, updates, and can become out of date. If you have any questions, consult an attorney. 

Image Credit: Northwestern suburbs from the Santa Catalina Mountains, by Matthew SchallanCreative Commons Attribution-Share Alike 3.0 Unported