The Common Sense Institute (CSI) has released its latest Quarterly Housing Report, shedding light on the evolving landscape of Arizona's housing market.
While the report brings some positive news, including a reduction in the state's housing shortfall from nearly 100,000 units in 2020 to approximately 67,000 units in early 2024, it also highlights significant ongoing challenges.
Despite improvements in vacancy rates and permitting, Arizona's housing market continues to struggle with a mismatch between supply and demand. The report emphasizes a particular concern: four of Arizona's 15 counties are not issuing enough building permits to keep pace with projected household growth, risking permanent shortfalls in housing supply.
The report reveals that over two-thirds of all new residential building permits have been issued in Maricopa County alone, leaving other regions, especially Pima County, lagging significantly behind in their ability to meet housing needs. This imbalance exacerbates the housing crisis, making it increasingly difficult for many Arizonans to find affordable housing.
"The latest findings underscore the urgency of addressing Arizona's housing supply gap," said Katie Ratlief, executive director at the Common Sense Institute Arizona. "While we've seen some positive trends, the fact remains that certain areas of our state are not keeping up. Without concerted effort and strategic planning, the gap in these counties will continue to widen, affecting thousands of families and individuals."
The report also highlights the enduring challenges facing homebuyers in Arizona, with the homebuyers "Misery Index" remaining at historically high levels due to persistent high prices and borrowing costs. In January, the monthly payment for a typical home in Arizona required a household to work 68 hours to afford, significantly above the long-run average of 43 hours per month.
To address these challenges, CSI has reiterated its recommendation for Arizona policymakers to require consistent and regular reporting on permitting, zoning and residential construction benchmarks from all local jurisdictions. This data, crucial for understanding and addressing the housing crisis, is currently gathered from the Census Building Permit Survey in the absence of a statewide repository.
"Only through transparency, data-driven analysis and collaborative efforts can we hope to make meaningful progress in closing Arizona's housing supply gap," added Glenn Farley, director of policy and research at the Common Sense Institute Arizona. "Our report aims to inform policymakers, stakeholders and the public about the realities of our housing market and the critical need for solutions."
The full report is available here.
Common Sense Institute is a non-partisan research organization dedicated to the protection and promotion of Arizona's economy. CSI is at the forefront of important discussions concerning the future of free enterprise in Arizona and aims to have an impact on the issues that matter most to Arizonans. CSI’s mission is to examine the fiscal impacts of policies, initiatives and proposed laws so that Arizonans are educated and informed on issues impacting their lives.
