At least 30 apartment developments stalled or were shelved across metro Phoenix in 2021 due to not-in-my-backyard-ism, zoning issues and political backlash.
That’s an industry estimate from apartment experts and includes projects spanning from Buckeye to Gilbert.The fights against building rentals comes as Arizona faces its worst housing shortage.
The state needs as many as 270,000 additional homes with rents and prices below what apartments and houses are going for now to keep the state’s growing affordable housing problem from becoming a crisis, according to the Arizona Department of Housing.
A group of real estate and other business leaders recently formed a housing advocacy group called Home Arizona to encourage policymakers to understand the shortage and potential solutions before it becomes a big economic-development problem.
“Home Arizona was founded on the shared belief that future generations deserve to be able to live, work and play in the communities they grew up in,” said Michael Lieb, a real estate broker and developer who co-founded the group. “Given a lack of housing supply, and corresponding astronomical price increases, that’s no longer a guarantee in greater Phoenix.”
Housing costs soaring
The group is trying to advocate for more housing to keep rents and home prices from rising so much that companies opt to not relocate or expand in metro Phoenix because their employees can’t afford to live here.
ABI Multifamily Research Manager Drew Ricciardi expects the average monthly rent in the Valley to reach about $1,750 by the end of 2022, up about 18% from the average for 2021.
The average rent for a Valley apartment climbed 18.4%, or $230, to hit $1,480 in 2021, according to ABI.
The median home price in the Phoenix area hit a record $427,000 in December, up 28% for the year, according to the Arizona Regional Multiple Listing Service.
That number is expected to climb to $430,000 in January, based on pending sales.Both rental vacancy rates and listings for homes are at or near record lows.
Workers struggle to afford homes
Due to rising costs during the past year, the typical restaurant or retail worker making between $28,000 and $37,000 in metro Phoenix can’t afford to rent a one-bedroom apartment and doesn’t have a chance of buying a home, according to new research on wages, rents and home prices for the Valley’s 11 biggest cities from economist Elliott Pollack.
Typically, a home is considered affordable if it doesn’t cost more than 30% of a household’s annual income.
Teachers and construction workers making around $50,000 can only afford one-bedroom apartments in Phoenix and Glendale.
Firefighters making the typical salary of $57,000 can only afford two-bedroom apartments in Phoenix. Police officers earning around $77,000 can afford two-bedroom apartments in all the Phoenix-area cities tracked but don’t earn enough to buy a house in any of them.
Nurses, the highest paid essential worker on Pollack’s list, bring home an average salary of about $84,000 and can only afford to buy a home in Avondale, Glendale and Phoenix.
“I’ve been doing this work since 1969, and this is worst housing supply and demand imbalance I’ve ever seen,” Pollack said. “We’re at the precipice of a very serious problem. We simply must increase supply, or it’s all downhill from here.”
He said the housing shortage will hurt metro Phoenix’s ability to attract and retain employers and employees.
Pollack will be presenting his findings to members of the Arizona Legislature this week. Home Arizona plans to meet with city council members and government planners across the Valley.
Zoning a barrier to more apartments
Getting zoning changes to build more apartments has never been tougher in the Phoenix area, say developers and real estate attorneys.
About 878,000 acres of vacant land across the state is zoned or set aside for single-family homes, according to the Maricopa County Association of Governments.Only about 17,000 acres are zoned or entitled for apartments.
“We want our employees to be able to live close to where they work so that they can spend more time doing the things that really matter, like spending time with their families,” said Home Arizona backer Sissie Shank, CEO of Phoenix-based air-conditioning and plumbing firm Chas Roberts.
“Our employees do a lot for us,” she said. “The least we can do is make sure that they have safe and quality housing.”
SOURCE: Arizona Republic