By Matt Roy
In a hearing last week, Arizona’s senior senator raised the issue of housing affordability and a looming homelessness crisis as she called on officials to find solutions.
At a hearing of the Senate Banking Committee last Thursday, Sen. Kyrsten Sinema addressed her concerns about a lack of affordable options for those in need.
“We have a lot of work to do to expand opportunities for first-time homebuyers and ensure that there’s sufficient affordable housing to Arizonans,” Sen. Sinema said.
Her assertion is borne out by data, at least in the rental home market, according to a joint report from the National Low Income Housing Coalition and the Arizona Housing Coalition.
The coalitions’ analysts reported the Phoenix market now has only 47,620 affordable rental homes — but there are 182,652 “extremely-low” renter households needing accommodation. That amounts to an estimated 26 available units for every 100 households in need.
Record-low supply paired with record-high demand has made it difficult for all but the best-qualified buyers to participate, according to multiple reports.
Sen. Sinema said while the market may favor sellers, those looking to buy are up against stiff competition.
“The state of the housing market in Arizona is particularly challenging right now,” she said. “It’s a very hot market and I’m hearing from my friends and neighbors that a home will go on the market and receive dozens of offers within 48 hours.”
With more buyers competing for fewer homes, those with the most cash to spend have a decided advantage.
“Many of these offers exceed the traditional 20% down payment, some offers are entirely in cash, and that shows the highly competitive nature of the market,” Sen. Sinema said. “I’ve even heard of homes that are selling for 20% or 30% over the list price paid entirely in cash. So, Arizonans looking to buy their first home are feeling very frustrated and it’s becoming too expensive to buy a home in Arizona.”
Secretary of the U.S. Department of Housing and Urban Development Marcia L. Fudge responded to the senator’s questions, highlighting the need for more houses and rental options.
“We know that the biggest problem is that there is just not enough supply of affordable and low-income housing. It just doesn’t exist,” Secretary Fudge said. “We know that there are so many impediments to purchasing housing, but the biggest issue really is a supply issue. So, that’s the biggest thing that we’re working on.”
She said through the use of low-income housing tax credits and other proposed legislation, officials hope to add as many as 2.5 million housing units to the U.S. market.
A new apartment development proposed in Surprise may employ that LIHTC program — which gives developers an incentive to build workforce affordable housing, Surprise Mayor Skip Hall told Daily Independent last week.
During Thursday’s hearing, Sen. Sinema pointed out another factor driving up costs is a shortage of lumber, which has increased the cost to build new homes. She suggested manufactured homes and so-called “tiny homes” could provide cheaper options for those struggling to find affordable digs.
Secretary Fudge agreed.
“Manufacturing homes is an option that we too-seldom look at,” she said. “It is affordable. It is resilient. It is energy efficient. And it is something that we should do more and more of.”
She said manufactured homes also are quick and easy to produce compared with traditional single-family houses.
Sen. Sinema also said she is concerned about reports of Arizona seniors who lost their homes and called for action to stem the tide.
“I wanted to raise with you that we are seeing a growing number of homeless seniors experiencing homelessness in Arizona,” Sen. Sinema said. “We’ve seen this trend on the rise for the past number of years. It’s a challenging crisis and there are no easy answers. But I’d like to ask that our teams work to together to find some solutions to address senior homelessness and, of course, work to find bipartisan support.”
Secretary Fudge pointed out the recent stimulus bill included emergency funding to support housing vouchers for those at risk of homelessness. But officials are working to find solutions to the growing crisis in Arizona and across the country.
A survey out this week from quotewizard.com analyzed data collected by the U.S. Centers of Disease Control and Prevention through its Household Pulse Surveys. Their report ranked Arizona among the states at greatest risk for mass evictions.
The analysts concluded one out of every four U.S. households said they live in fear of being evicted during the next two months as federal and local eviction and foreclosure moratoriums come to an end while many are still recovering from the pandemic’s economic downturn.
“High housing costs, a potential end to a moratorium on evictions and prolonged unemployment have many Americans worried about keeping a roof over their heads. We found that nationwide, nearly 25% of people (1 in 4) are worried they will face foreclosure or eviction in the next two months,” the report stated.
In Arizona, that figure is much higher — with 45.3% of respondents claiming they face imminent foreclosure or eviction.
During the Great Recession, Arizona led the country in foreclosures — with Arizona, California, Florida and Nevada combining for more than 47% of all foreclosures, according to a May 2009 report from the Pew Research Center.
Apart from the ongoing COVID-19 public health crisis, housing insecurity has been exacerbated by rental and mortgage costs, which have far outpaced income gains over the past decade, pushing many out of the market and — potentially — onto the streets.
“Nationwide, housing costs have risen by nearly 70% in the last decade. Income, meanwhile, is up only 30% over the same time period. Combine this disparity with record pandemic unemployment and we have a situation where housing has simply become unaffordable for many people,” the report stated.
Rhode Island, Louisiana and Arkansas are the leading states for potential foreclosures; while Arizona, Maine and Colorado residents were among those facing the highest eviction rates, according to the report.