Housing quantity and cost solutions are perennial. Every generation deals with this issue and as we know, it is cyclical. Beyond this basic repeating cycle, there are times of extraordinary housing supply and cost stress.
During WW II, during the Great Depression, during the Great Recession, during the high inflation times of the 1970’s and for us in Arizona, now. A time of stressed supply chains, limited raw material production, and inflation. Add to these concerns the overhang from Covid-19 policies, and the production of housing has been impacted greatly.
If you are in areas of Arizona where business start-ups, business relocations and overall economic development is blossoming at a prodigious rate, you can add the pressure of incoming good paying jobs, and the people who seek those jobs. These realities create a dramatic need for housing of all sorts and all price points, rental and purchase product.
While hundreds of thousands of housing units are in the process of being built, we still must address housing for the short term and the long term, and develop housing product for those wage earners in those new jobs.
After reviewing the prevalent wage range for jobs coming to the WeSERV REALTORS® area, $45,000 to $95,000 per year seems like the range most workers will be paid. We estimated a net wage for this group of wage earners, and household sustainable housing costs based on a total cost of housing of 25% to 30% of net income.
This group of middle class wage earners are firmly in the entry level housing group. And yet across West Valley, Southeast Valley, Pinal, Cochise and Santa Cruz, we have little to no entry level housing product.
While building entry level housing is the ultimate solution, there are impacts from government policy and private sector solutions that may or may not aggravate the housing remedy.
In this report WeSERV, in conjunction with the Jim Rounds and the Rounds Consulting Group, provides analysis of issues and offers possible solutions from the private sector.
The reality is, there is no one tactic or tool. And there is no bullet point list of “to-dos” that will solve the current housing predicament. Instead, there are a plethora of solutions that when selected in a judicious manner with an eye to the future, will create an environment of prudence and discernment in housing policy.
It is our hope WeSERV members, their clients, and government will read this report and realize the web of solutions available to individuals and local government. Discerning the tools that best serve the wage earning entry level housing market, and using them to better house individuals is a goal for each of us and our communities; now and over time.
This report was made possible by a grant from the National Association of REALTORS®