In early pandemic days, we heard a lot about the need to “flatten the curve.”
We were implored to take urgent steps to reduce COVID-19 infections and keep hospitals from being overwhelmed.
Now we need to take urgent steps flatten another curve — in the Tucson housing market.
That curve, in this case, is the upward bending line that shows the increasing rents and home prices in the Tucson area.
In October, the median sales price of single-family home was up by 22.3% over the previous year, to $340,000, the Tucson Association of Realtors reported. Rents have increased anywhere from 7% to almost 45%, since a year ago, depending on the type of rental unit.
This once-cheap town, where you might not get paid well but could at least afford a home, ain’t cheap anymore. It’s a struggle to buy a home on a Tucson wage, and if you can’t buy, you’ll find yourself in an increasingly unaffordable rental market.
It demands action, of course — something that our government officials are well aware of. As reported by Patty Machelor today, the Tucson City Council will hear a new report at Tuesday’s meeting outlining actions it can take to address the growing unaffordability of housing.
The problem is, when it comes time to take action, things move so slowly.
City guesthouse ordinance on hold
Consider what happened at the Nov. 9 City Council meeting, as reported by my colleague Sam Kmack. The council decided to delay implementing a new ordinance giving blanket permission for property owners to build full guesthouses on their property up to certain sizes.
This ordinance, approved Oct. 19 after a year of discussion and planning, allows residential property owners to build a guest house, or “accessory dwelling unit,” up to 1,000 square feet if their property is at least 7,000 square feet, or up to 750 square feet if their lot is under 7,000 square feet.
It was a sweeping change, but based on the experiences of other cities, it was likely to have little impact on affordable housing in Tucson. If 100 of these were built in a year, it would be surprising.So, many more actions are needed in addition to giving property owners more leeway to build guesthouses.And yet, on Nov. 9, the council revisited concerns that council member Steve Kozachik had already expressed at the Oct. 19 meeting — that the size limits need to be smaller in the areas surrounding the University of Arizona in order to prevent an upsurge in student housing like the sudden growth of “mini-dorms” in campus neighborhoods years back.
I could relate to council member Lane Santa Cruz when she described herself as “exhausted” from talking in circles about the guesthouse measure.
“It’s a mistake to bring this ordinance up for reconsideration after the year-plus process that staff has undergone with the public,” she said. “I’m feeling really frustrated about this because we are thinking of the worst-case scenario and trying to restrict around that.”
The changes, she concluded, could make it harder for normal people to build a guesthouse, or “casita,” leaving it viable only for developers.“I think we have to be serious about addressing the housing shortage in Tucson and we need to recognize that this is a small but first incremental step in addressing that,” she said. “We have so much more work to do.”
OpenDoor scoops up homes here
And that is the point — the casita ordinance is just a small step, and we’re still dawdling on it. Even as, according to the Tucson Association of Realtors, rents on guesthouses rose by 44.8% from October 2020 to October 2021, from $788 per month to $1,141.
I’ve spoken with real estate experts in Tucson, and they point to a variety of factors for the run-up in prices. Mostly, they say there’s inadequate supply. That’s what Randy Rogers, CEO of the Tucson Association of Realtors, said, adding that there’s a five to 10 year lag time before supply can catch up.Omar Mireles, president of HSL properties, noted that there was a 10-plus-year period, ending around 2015, when rents were more or less static in Tucson. That discouraged apartment developers, from building, he said.
His company is building two new complexes on the southeast side and just opened the high-end Flin Apartments downtown. But while companies are in the process of putting up about 6,500 units in the market, he said, there’s a need for up to 25,000 over the next five years to meet existing demand and population growth.In the homebuying market, there’s also a relatively small presence of investors and online real-estate firms snapping up homes. While national investors like Blackrock aren’t as significant in Tucson as they are in other markets, where they’ve been blamed for driving up prices, “iBuyer” firms like OpenDoor are grabbing homes here.
These are firms, beginning with companies like We Buy Ugly Houses and later Zillow, that estimate your home’s value and make an offer sight unseen. Zillow recently dropped out of this business, but OpenDoor is active in Tucson.
When I was reporting in a neighborhood near South Kolb Road and East Golf Links in June, I knocked on the doors of a half-dozen houses to talk with neighbors. When I went back to the same area to follow up in October, half of those houses were newly owned by OpenDoor — and vacant.These companies typically fix homes and then flip them, but that takes time, and in the meantime the homes are off the market, contributing to the tight housing supply. A search of Pima County assessor’s records on Friday showed that OpenDoor’s firms — with names like OpenDoor Property C LLC — own 375 separate properties in the county.
That impact may not be massive in a market this big, but it can contribute to the shortage.
Bold action needed now
So some of this problem is out of our hands — and in the hands of big market forces and players. But the same way they may limit supply in small ways, driving up prices, we can work to help residents in small ways that can have a cumulative effect.
The city’s new housing plan includes ideas like:Streamlining the development review process for affordable housing projects.
Promoting low-cost development methods such as modular homes and 3D-printed homes.Developing affordable and mixed-income housing on city-owned properties.
Noticeably absent from the document are ideas to improve existing city bureaucracy to make it easier to build housing in general, not just affordable projects. But anyway, it’s a start.
AUTHOR: Tim Steller