Phoenix needs more houses and apartments to keep up with demand
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For almost all of Phoenix's history, our housing prices were below the national average, winning us a reputation of affordability.
- That's not the case anymore, and it hasn't been since 2019.
Driving the news: Our affordability problem is simply a matter of supply and demand.
- We have more people wanting to live here than we have housing units.
Why it matters: As more people move to the Valley, housing costs will continue to rise if supply doesn't catch up quickly.
- This will mostly impact medium- and low-wage residents — service workers, teachers and first responders — who can't afford the rising costs.
Catch up fast: Home and apartment building all but stopped after the 2008 housing crash, according to Colliers researcher Thomas Brophy.
- It restarted in 2016, then lulled again the next two years.
- Meanwhile, more people started moving here.
- By the time building started up in earnest in about 2019, the region was already playing catch-up.
State of play: We're building a lot right now. Phoenix consistently ranks in the top 10 markets in the country for single-family and apartment permits.
- Brophy estimates the region will issue 50,200 housing permits by the end of the year.
Yes, but: It's still not enough, and it's not even close to our peak building year.
- In 2005, metro Phoenix issued 68,400 permits, Brophy says.
What he's saying: "We basically had a decade of under-building. That's a lot to overcome."
What's the hold up? Labor shortages and supply chain issues.
- Brophy says homebuilders are also competing for labor against major commercial projects under construction in the Valley, including the Taiwan Semiconductor Manufacturing Co.
- Inflation and interest rate increases may lead to slower building as developers rethink some of their investments, he said.
The other side: The Arizona Multihousing Association and other business groups are pushing for revamped zoning laws that could speed up building.
- Many multifamily projects have been killed through the zoning process by neighbors who don't want apartments near their homes.
- The group pushed a bill earlier this year to create a "by right" zoning process that would have allowed housing projects on agricultural, commercial and residential land.
- But it was killed after pushback from cities.