As 2022 dawns, many in Arizona worry that the state is running out of affordable housing. Skyrocketing real estate prices coupled with low inventory have created housing problems for low to middle-income residents. 

A recent National Low Income Housing Coalitions (NLIHC) Gap report shows that Arizona ranks as the fourth worst state for affordable housing. The statistics revealed that there are approximately 26 affordable/available rentals for every 100 low-income households. Only Nevada, California, and Oregon ranked worse for affordable housing in the study. 

Wage Disparity and the Affordable Housing Shortage 

Despite the shortage, the state is not necessarily running out of affordable homes. Instead, there is a blatant difference between affordable housing in the state and inflation. Extremely low income (ELI) households make up 36% of those impacted by the so-called housing inventory shortage. Within those households, the residents often work as little as 20 hours a week. The low-wage jobs coupled with the lack of hours have made it impossible for ELI individuals to afford a home. 

Additionally, we must examine the 30% of seniors who are also classified as ELI households and simply cannot afford a home in the state due to their low social security. An additional 18% of ELI houses have at least one member on disability. 

Clearly, the problem that exists is with low-wage jobs and those struggling to subsist on social security or disability. Such individuals cannot even afford homes that are deemed ‘affordable’ by other standards. 

A Combination of Arizona Housing Shortage Problems 

The Arizona Department of Housing has come forward listing a multitude of issues that are compounding the affordable housing shortage in Arizona such as increasing home prices and the prohibitive cost of rentals. Also, the land prices are rising and many simply cannot obtain approval for apartment zoning, especially in the greater Phoenix area. Once approval is obtained for apartment units, the increased labor costs and supply chain issues are also driving the costs and timelines. 

Problems Impacting the Arizona Housing Market 

The many problems are impacting rent for Arizonans in the state. Rent Café lists the average cost of rent for an apartment that is 805 square feet at $1,400 per month. That is an increase of $200 from the 2020 price of $1,200 and another increase from the 2019 price of $1,100. Wages simply are not increasing to meet the prohibitive cost of the rent. 

Homelessness in Arizona 

The Homeless Management Information System reports show that homelessness is increasing throughout Maricopa County. In September of 2021, there were 5,100 homeless in the county which is an increase of 4,000 in just one year.

Factors Fueling the Arizona Housing Crisis 

Many things have exacerbated the problem of the housing crisis in Arizona such as the state’s rapid growth. 

 

The following statistics released by the Cronkite News report shows the factors that are fueling the so-called housing crisis in the state.

 

  • 200 new residents per day are moving into Maricopa County. 

  • Half of the jobs in Arizona pay less than $15 per hour.

  • Suburban sprawl is increasing the demand for housing.

  • An apartment boom is taking place in Maricopa, but the apartments charge over $1,000 per month for rent which is out of the budget of many. 

Housing Crisis vs. Low Wages

The housing crisis is a reality for those who earn low wages. In Arizona, reports have shown that a minimum wage earner must work 71 hours to afford a simple two-bedroom apartment. If an Arizonan makes the state minimum wage, then they must work two full-time jobs to pay for an apartment. This is not a phenomenon that is associated with only Arizona.

In a National Low Income Housing Coalition it was found that 90 percent of counties in the country are experiencing the same housing shortage. In fact, full-time U.S. workers must make $22.96 per hour to live in a two-bedroom house in virtually every state, not just Arizona. 

Rural Arizona Housing Problems

Many might think that moving out of metropolitan areas like Phoenix might solve the problem, but even rural areas are having a hard time coping. In most cases, rural residents are retired and struggling to live on fixed incomes. They often have a place to live but simply cannot keep up with essential repairs and maintenance which leads to properties that are often rundown.

Younger residents in rural locations have problems finding a job that even comes close to covering rent. 

Wealthy, urban second homeowners have also discovered the benefits of rural housing and its affordability so often snag up the low-income homes before local residents have a chance to make an offer. 

In rural areas, unemployment hovers at around 9.2% and shows no improvement. 

A Harvard Joint Center for Housing Studies shows that 41% of rural households often pay more than 30% of their monthly income for housing and at least 21% pay half of their income. The situation continues to worsen as huge disparities between income and rent grow. The lack of good jobs makes it difficult for renters to pay for rent and homeowners cover property taxes. 

Building Affordable Arizona Housing 

Arguments are made to build affordable housing in Arizona to meet the needs of the state’s underprivileged, but the reality is that the cost of building has skyrocketed. Building supplies are priced at an all-time high. It is simply not cost-effective for builders to build so-called affordable housing to meet the needs of low-income individuals.  

The growing population in Arizona is only going to snowball the housing crisis. Are there affordable houses in Arizona? Yes, there are affordable houses, but they might not meet the needs of ELI individuals. The housing issue in Arizona is not that the prices are too high but that the wages remain low and metropolitan sprawl often absorbs affordable rural housing. 

 

At this time, there is no easy solution to the housing dilemma faced by the state’s residents, but many are working to find solutions.