Phoenix multifamily operators have spent the last several years fighting the same problem: too much available inventory and not enough occupied units.
The response has been predictable. Offer a month free. Waive a fee. Add a gift card. Lower the effective rent until the unit moves.
There’s a reason concessions are the default. They’re easy to approve, easy to explain to ownership, and easy to measure. A vacant unit becomes a leased unit.
But the leasing report doesn’t show why the unit was vacant in the first place.
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CoStar’s Q2 2026 Phoenix market report shows the market absorbed 20,892 units over the trailing 12 months, more than double the pre-pandemic five-year average of about 7,200 units a year, enough to rank Phoenix among the top five demand markets nationally. That’s real demand, not a soft number.
Vacancy was still at 11.6%, and that makes sense. Phoenix added a lot of new apartments, so even though more people are renting, there are still plenty of empty units. As fewer new apartments come onto the market and more people move in, vacancy should start to drop. But that hasn’t happened yet. That’s why operators are offering bigger deals: four to eight weeks of free rent is now common, and new buildings are often offering 10 or more weeks free.
Most operators only see half of that picture. They see the vacancy number and reach for a concession without stopping to ask whether the real problem is price or approvals. A concession fixes a pricing problem. An approval problem is different. It happens earlier, before pricing ever gets the chance to work at all.
My background is leading asset management teams and working with property managers nationwide, and one mistake I see people make, often too late in their careers, is chasing concessions the moment a market shows softness instead of asking who applied, who was declined, and why. Behind every one of those applications is someone trying to find stability, move forward, and secure a place they can call home, and too often, they’re met with a system that doesn’t reflect their full story, so the answer becomes no without context..
A renter who thinks the apartment is too expensive can respond to a concession. A renter who wanted the apartment, submitted an application, and was turned away by an inflexible underwriting screen has already leased somewhere else by the time that unit gets discounted, and that applicant never shows up in the occupancy report at all.
A recent analysis of 10,401 rental applications across five U.S. markets found approval rates ranging from 52% to 65%, and denial rates ranging from 15% to 29.7%. The data doesn’t establish how many of those denials reflected legitimate risk versus a screening model that couldn’t accommodate a particular applicant profile. That gap is exactly why operators should be looking at their own denial data instead of assuming every rejection was unavoidable.
The categories are familiar: self-employed income, nontraditional compensation, thin credit files, limited rental history, applicants relocating from another market. None of that automatically makes someone a better or worse renter. It does expose where an underwriting system may have been built around a narrower profile than the one actually walking through the door.
Concessions shouldn’t disappear from the operator’s toolbox. Phoenix has a real supply-and-demand imbalance, and there are properties where price is genuinely the right lever. But a concession should be a response to a measured pricing problem, not a reflex for every vacancy.
The first step is simple: pull the denial data, look at who was declined and why, and separate legitimate credit and income risk from applicants who simply couldn’t be evaluated effectively under the existing framework. Only then does an operator know whether the real opportunity is a lower price or a better approval process, and which one actually protects NOI.
Newer approval infrastructure is starting to close that gap. Platforms such as Cosign, alongside deposit alternatives more broadly, are built for renters that default underwriting tends to miss: students, retirees, international residents, self-employed professionals, thin or imperfect credit files. But the technology is secondary.
The real shift is recognizing that vacancy isn’t always a pricing problem: sometimes the renter is already standing at the door, and the only question left is whether the approval process lets them in.
Author: Zach Schofel is the co-founder and CEO of Cosign, a third-party guarantor platform and cosigner alternative designed to expand renter access while protecting property owners.
