A new report highlights the need for faster permitting to address Arizona’s housing affordability and supply challenges. While the state’s overall housing shortage has declined, affordability remains a major concern, according to the Common Sense Institute (CSI).
“You have very high prices, very high interest rates, and it is the worst affordability crisis arguably in state history,” said Glenn Farley, CSI’s director of policy and research, in an interview with The Center Square.
CSI reports that the average home price in Arizona reached $424,800 in 2024—an increase of $70,000 since before the pandemic. The annual income required to afford an average home now stands at $109,900.
“The solution here is to permit more units, permit the kinds of units that can be more affordable to first-time buyers,” Farley explained. “These are smaller units, multi-family units, and smaller single-family homes on smaller lots. These are the kinds of properties that need approval and construction if we want to bring prices down.”
CSI estimates that Arizona remains short by approximately 57,000 housing units as of the fourth quarter of 2024, a decrease from 69,000 the previous year. However, at the current permitting rate, it would take more than 13 years to close the gap.
Maricopa County, which has a deficit of around 37,000 housing units, would require an estimated 150 years to eliminate its shortfall at the current permitting pace.
“New construction is usually more expensive than existing housing, much like new cars cost more than used cars,” Farley noted. “However, in some markets, new housing has actually become cheaper than existing housing. Builders are trying to meet demand by developing more affordable housing options, but they cannot do so quickly or at a high enough volume to meaningfully lower prices.”
