Arizona is one the fastest-growing states in America.
Tens of thousands of new residents require tens of thousands of homes in which to live. The housing market has not been able to build new rental housing and single family homes quickly enough to match this surge. Thus, the price of housing has risen statewide.
In January 2022, the median sales price of a home in metro Phoenix hit a record $435,000, up 27 percent over the past year. The population explosion also has sent rent surging upward in Maricopa County, together with rising costs for construction materials, payroll and property taxes. The COVID-19 pandemic and the 18-month eviction moratorium also contributed to surging rents, with a majority of single-family rental homeowners reporting they suffered from the inability to collect rent – including 23 percent of property owners who were forced to sell some or all their properties.
How deep is Arizona’s housing shortage?
New houses and apartments must be built
According to the Arizona Department of Housing, that’s how many housing units our state needs to build to keep up with demand.
New apartments built annually
Economist Elliott Pollack estimates that in metro Phoenix, we have a shortage of about 15,000 apartments currently, beyond what needs to be built annually to keep up with growth.
The positive economic impact of apartments
Arizona has more than 800,000 apartment residents. Together, they contribute nearly $67 billion to the local economy each year – including nearly $7 billion in tax revenue.
Apartment residents create about 383,000 jobs across the state.
The operation of apartment homes statewide creates 6,000 jobs and contributes nearly $3 billion annually to our state’s economy.
Apartment construction is a huge contributor to the Arizona economy as well. The industry creates about 14,000 jobs and contribute nearly $3 billion to the state’s economy.
How do we solve the Arizona housing supply crisis?
Arizona’s cities and towns must build more housing at all price points, and do so quickly and cost-effectively.
If we fail to correct this shortfall in supply, Arizona’s renters, would-be homeowners, our workforce and economy will pay a heavy price. Arizona will lose its competitive advantage when it comes to attracting new employers. Homelessness will surge. And middle-class residents will find themselves increasingly priced out of buying a home or renting in the communities they have long called home.
Unfortunately, cities like Scottsdale, Mesa, Tucson, Gilbert, Surprise, Goodyear and Buckeye all have been resistant to building new homes and apartment communities, even as they proclaim the need for more affordable housing.
Killing one quality apartment project after another plays well with the “not in my backyard” NIMBY crowd – who oppose virtually every new home and apartment community – but forces the price of housing higher by stifling the marketplace and raising the cost of new construction.
The fastest, most effective way to lower rent is to build more homes – end of story.