The American Dream isn't exactly picture perfect in Phoenix, Arizona, as middle-class workers are being priced out of the housing market, leaving a teacher like 24-year-old Daniel Lopez bunking with coworkers just to make ends meet. According to a study by Arizona State University, a staggering $123,752 salary is required to afford the median home price of $460,000, and even the rent for a two-bedroom apartment, averaging $1,671, is a tall order for many. "But when it comes to housing, a lot of us don’t get paid enough to afford rent anywhere on our own," Lopez told Phoenix New Times.
Nationwide, an affordable housing crisis is throttling middle-income buyers, with the country short more than 300,000 homes according to the National Association of Realtors (NAR). Lawrence Yun, NAR Chief Economist, laid it out plain and simple: there just weren't enough houses built in the decade leading up to the pandemic, leaving current stock unable to cover the growing population and jobs created. "There are simply not enough homes to house the growing population in America and consequently, we are seeing significant rise in rent over the past two years," Yun explained in the analysis.
Back in Arizona, the Morrison Institute for Public Policy, ASU's research arm, chimed in with its own numbers, reporting a shortage of 270,000 housing units across all affordability ranges, with a measly count of 26 rentals for every 100 extremely low-income residents. The inefficient zoning of about half of Arizona's land for single-family homes is a key culprit in this housing shortage tap dance. While restructuring zones from single-family to multifamily may sound like a decent solution, it's a timing nightmare for developers with rezoning taking up to two years, according to a 2022 report from the Morrison Institute.
Amy St. Peter, deputy executive director of the Maricopa Association of Governments, revealed in a January webinar that last year saw at least 30 developments delayed or canned due to backlash against rezoning. Meanwhile, NAR suggests that policymakers should better perceive housing as critical infrastructure, hinting that some government intervention with funding, tax credits, or maybe rental subsidies could give local residents a leg up. Tony Bertoldi, Co-President of CREA, LLC, echoed this sentiment and is hopeful for a tax bill in DC that could potentially unlock doors for 200,000 more affordable homes if it gets the green light from Congress.
For individuals like Lopez, the clock is ticking and patience wearing thin. After his current lease expires, he's anticipating another chapter of cramped quarters, this time with three friends in Tempe. Still, he's holding a glimmer of hope for a stable housing situation down the road, a sentiment mirrored by Sally Schwenn, Arizona market president of affordable housing developer Gorman & Company. Despite funding challenges, Schwenn is spotting positive signs in the market, with land prices softening and construction costs leveling off, providing a silver lining for future affordable housing projects. Whether these developments will come in time to benefit the present generation longing for the stability of homeownership remains to be seen.
