Metro Phoenix Housing Crisis: Impact and Solutions

Metro Phoenix is in a crisis of affordable housing, and a variety of options will be required to not only provide safe and affordable places to live but also to persuade communities to welcome those developments.

That’s according to Alison Cook-Davis, the associate director of research for the Morrison Institute for Public Policy at Arizona State University who was part of a webinar titled, “Home is where it all starts,” presented Wednesday by the League of Women Voters of Metro Phoenix.

Cook-Davis’ talk was based on a series of recent housing research reports done by the Morrison Institute, including one in which the research team interviewed 15 housing developers to highlight the challenges they face in building affordable housing.

“Developers said they wished to see more political will around creative housing solutions,” Cook-Davis said during the Zoom presentation.

Housing shortage

According to the ASU research report, Arizona is short 270,000 housing units, and there are only 26 rentals available for every 100 extremely low-income households.

Cook-Davis said the main challenges the developers cited were building costs, zoning issues and opposition from neighbors.

“Land, construction and labor costs have continued to rise, and developers are struggling to finance projects,” she said.

“Developers must compete with each other over land and large developers can pay more, leaving small developers at a disadvantage.”

Smaller projects can struggle to find general contractors, and developers in rural areas have to bring in workers from far away.

Zoning and policy issues

In addition, compliance with the requirements for multiple funding sources can be complicated.

Solutions to this could include expanding the low-income housing tax credit, waiving impact fees — which has been done in the city of Tucson — and putting general-obligation bonds on the ballot. Last fall, voters in the city of Phoenix approved $65 million worth of affordable-housing projects in a $500 million bond program.

Because most municipalities are primarily zoned for single-family housing, the land must be rezoned for multi-family affordable-housing projects, which can be a long and complicated process. In addition, development requirements such as parking space minimums and design rules can add significant costs.

“Rezoning can be lengthy process, taking up to two years or longer for an application,” Cook-Davis said. “For subsidized housing, that can put critical funding at risk.”

More flexible zoning could ease that problem.

“It’s not just giant apartment buildings, it’s accessory dwelling units or duplexes,” she said.

In 2021, the city of Tucson decided to allow accessory dwelling units in residential neighborhoods. The city of Tempe is considering a similar proposal.

“This makes it much easier to build because people don’t have to go through a special permitting process,” she said.

Community objections

Community pushback is one of the hardest challenges to solve. Neighbors typically fight development proposals over fears of decreased housing values, density, traffic, crime and their perception of who will live in affordable housing, Cook-Davis said.

“The developers we talked to said they were seeing a lot of pushback on housing projects of all types, but multifamily and affordable housing are particularly affected,” she said.

“Some neighborhoods have well-organized HOAs that are prepared to attend meetings and will pressure council members.”

Developers told the ASU researchers that they have tried community outreach to combat negative perceptions of people who would live in affordable housing.

That kind of outreach is the goal of a new initiative called “Home Is Where It All Starts,” according to Amy St. Peter, deputy executive director of the Maricopa Association of Governments. The campaign is sponsored by several public and private partners, including the Maricopa Association of Governments, the Arizona Department of Health Services, Cox, Valley of the Sun United Way and ASU.

In 2021, at least 30 developments in metro Phoenix were delayed or canceled due to community opposition, zoning issues or political backlash, she said during the webinar.

Salary hurdles

Housing is considered affordable when the cost does not exceed 30% of a household’s income. St. Peter said that 27% of multifamily renters in the metro area pay more than 50% of their income in rent, which puts them at risk of eviction due to any unexpected bill, such as a car repair.

“That spiral is very difficult to come back from,” she said.

One way the campaign will work to address neighbors’ fears of affordable housing is to explain who will live there.

In greater Phoenix, people who work as firefighters, nurses, police officers, teachers or construction workers typically do not make enough money to afford to buy a home — which requires a salary of $123,752 to reach the median price of $460,000, she said. And most do not make enough to even rent a two-bedroom apartment — requiring a salary of $66,840 for the median rent of $1,671.

“When people say, ‘We don’t want them in our neighborhood,’ this is who they’re taking about,” St. Peter said of the firefighters, nurses, police officers, teachers and construction workers.

Locally, about 14% of renters are headed toward eviction compared with the national average of 8%, she said.

“That means people aren’t stable,” she said. “We’re disrupting lives and the social fabric of our community when we have such high eviction rates.”

St. Peter said the campaign wants to reach people who are opposed to affordable housing.

“We have to seek to understand their perspective. They may have valid concerns, and we need to address them in a constructive manner,” she said.

“Everyone needs access to a home.”

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