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No matter where you live in Arizona, chances are you’re encountering rising rents and surging housing prices. These trends served as the backdrop for the Arizona Housing Coalition’s annual meeting in Phoenix last week, where affordable housing advocates, business leaders, and state officials convened to discuss the issue, the Arizona Republic reports.

The Arizona Community Foundation (ACF), a philanthropic organization, was one of the stakeholders at the event, where it emphasized its new Arizona Housing Fund, a voluntary program to fund more affordable housing. The program asks homebuyers, developers and real estate agents to donate $25 when they close on a sale. 

Meritage, a Scottsdale-based company, was the first homebuilder to volunteer for the fund, announcing it would donate $25,000 to match homebuyers’ $25 contributions for the first few years, the Arizona Republic reported in September.

“The Housing Fund is a very unique concept that sets Arizona apart from other parts of the country,” Elisa de la Vara, chief community officer with the ACF, told the Republic. “I haven’t heard of anywhere else where the private sector is taking such a proactive role to engage the real estate community and home buyers and sellers in helping others afford homes.”

The fund was the brainchild of Howard Epstein, a board member of the nonprofit Arizona Housing Inc. and a Bank of America executive. Epstein hopes the fund will raise $100 million for affordable housing over the next 10 to 15 years.

That program comes on top of the foundation’s previous work; over the past decade, the ACF has loaned $4.9 million in interest-free loans to developers to help build affordable housing units. These loans have created over 3,000 jobs and created more than 2,900 affordable housing units in Arizona. 

The business and philanthropic sectors aren’t the only ones taking steps to address the issue. State lawmakers approved an extra $15 million in funding for the state’s Housing Trust Fund this year.

The Housing Trust Fund, launched in 1988 and primarily funded by the sale of unclaimed property, works to prevent homelessness and provides affordable homes, emergency shelter, disaster-related housing relief, and housing support to rural and tribal communities. 

The increase in funding underscores the severity of Arizona’s affordable housing crisis. 

In Phoenix, the average rent rose by 8% in the past year, while the average sales price of homes rose by over 5% from September 2018 to September 2019, according to the latest report from the Arizona Regional Multiple Listing Service, a real estate consulting service.

Arizona’s economy is growing, but incomes haven’t kept up with rental or home prices and the state’s growing population is also squeezing the state’s rental supply, which can now only meet a quarter of the state’s need.

These factors have combined to cause a spike in the average cost of rent in Arizona. The state’s rental market has gotten so expensive that the state now has the third biggest shortage of affordable housing units, a deficit of more than 153,000 homes, according to a 2019 report from the National Low Income Housing Coalition (NLIHC). 

Arizona has just 25 affordable and available rental units for every 100 extremely low-income households, which are defined as those with incomes below the poverty line or less than 30 percent of their area’s median income. 

There are more than 200,000 such households in Arizona and more than 80 percent of them are seniors, people with disabilities, or low-income workers, according to the NHLIC. These families have some options, including Section 8 housing choice vouchers, the federal government’s program to help very low-income families, seniors, and people with disabilities afford housing. 

More than 107,000 Arizonans receive some form of federal housing assistance, but demand is rising and funding is limited, so nearly 400,000 low-income Arizona renters don’t receive federal assistance, according to the nonpartisan Center on Budget and Policy Priorities. 

As the state’s rental supply has gone down and prices have gone up, it’s led to an accompanying increase in homelessness. Nearly 10,000 Arizonans experienced homelessness in 2018, a 10.3% increase over 2017, according to data from the U.S. Department of Housing and Urban Development.

Things could get worse too, housing and homelessness advocates fear. That fear is shared by Mike Trailor, the former head of the Arizona Housing Department and Department of Economic Security, who told the Republic that more needs to be done to stave off the impending affordable housing crisis. 

“We are at a tipping point in Arizona,” Trailor said. “We are not where San Diego, Seattle or San Francisco is for housing, but we will be there if we don’t get ahead of this.”

Housing advocates view the funding boost is a start, but are concerned that it’s not permanent and still falls well short of the $30 million in state dollars the fund received prior to the 2008 Great Recession. Making that funding permanent is atop housing advocates’ wishlist, alongside a desire to implement a state tax credit to fund more affordable housing. 

It’s unclear whether an appetite exists for that in Arizona’s state legislature, but last week’s Arizona Housing Coalition’s meeting showed that at the very least, the issue is finally receiving more attention.