2022 CSI Arizona Housing Fellow State Senator Sean Bowie and fmr. Gilbert Mayor Jenn Daniels were CSI Arizona’s first fellowship partners and both have long histories of housing policymaking and expertise. their report, “Arizona Housing Innovation: Opening the Doors to the Future of Arizona Housing,” responds to the Arizona housing crisis.
- Home prices in Arizona have risen over 50% in just 18 months. Prices have fallen at a rate of about 1% per month since peaking in June, but the combination of very high interest rates and a shortage of supply means this price easing offers little comfort to homebuyers. Hmm. of CSI Homebuyer Unhappiness Index It continued to hit near all-time highs, more than double its long-term average levels.
- Arizona’s housing vacancy rate shows a shortage of 100,000 homes. Rapid population movements since 2020 and a slowdown in housing construction since the Great Recession have created a substantial housing shortage. But interest from developers and builders has slowed, with real-time measurements of home construction down about 30% from their peak in early 2022.
- A combination of state and local regulations and bureaucracy is closing the door to new housing. Houston – a city rivaling Phoenix in size and character and renowned for its relatively open housing market – has seen similar population growth since 2000, but with just a fraction of the volatility in real estate prices. department. Between 2010 and 2020, Houston added over 400,000 new housing units to her, increasing housing supply by 20%. In the same period, Phoenix added half of that, increasing supply by just 10%.
Sen. Bowie and Daniels face clear evidence that Arizona’s housing construction is not keeping up with demand, and Sen. Bowie and Daniels reveal they threaten to derail this already narrow pipeline. bottom. Three areas for policy makers to consider next year:
- Cities and towns need to be more flexible in responding to housing developments and the needs of young families and low-income buyers. Housing diversity is essential for economic development and affordability. Red tape and lengthy licensing and permitting processes entail high fees and obligations, increasing the cost of new housing developments and limiting buyer options. Our local governments must adopt harmonized processes that are fair, consistent and easy to follow.
- Arizona needs to recognize the needs of different communities and ease the preemptiveness that limits options. Statutory orders prohibiting reasonable regulation of short-term rentals and prohibiting experimentation with new tools to encourage increased housing development, such as “housing opportunity zones” and affordable housing partnerships, are unnecessary and unintentional. It is only exacerbating the current crisis.
- Policy makers should promote partnerships between states and local governments. Legislators should consider funding statewide grant programs that reward cities that innovate by adopting potentially costly local reforms. The state should also authorize housing departments to create objective scorecards that reward highly rated, innovative jurisdictions that developers and buyers can rely on when choosing locations.
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