Thanks to a newly passed state law—SB 1162—Arizona cities must now issue a Housing Needs Assessment every five years.
SB 1162 also requires cities to submit an annual report to the Department of Housing with data on the past year’s homebuilding approval, activities, and progress towards meeting housing needs.
Both were due on January 1st. A review of the assessments we were able to find so far shows omissions and inconsistencies. Furthermore, it is not clear if some cities published a report as required.
We’re tracking both the housing assessments and annual reports here.
What must be reported?
The housing needs assessment must include:
- Projected population growth over the next five years.
- Projected job growth over the next five years.
- Total amount and type of residential zoned land.
- The total number of housing units needed to meet current and future demand based on various factors, including population and job growth projections.
Many cities have conducted a housing study over recent years, but these often lack information now required by state law. SB 1162 says cities must amend any housing study conducted since 2021 to include said information.
This info should help us better grasp the scope of the housing shortage, how well cities are meeting their housing needs, and to assess how well reforms are doing at easing the shortage.
What has been reported?
How—and what—has been reported varies.
Scottsdale and Peoria posted fairly similar documents, having utilized the consulting group Civitas to compile the report.
Tempe has posted their assessment and annual report as an addendum to an existing housing needs study. They report a current deficit of 22,930 units and a projected need of 97,454 additional homes by 2029. This is by far the largest self-assessed housing need of any city we were able to find. Tempe deserves credit for not underplaying the scope of the crisis.
On their data collection form, Peoria failed to mark whether housing yield meets projected demand (it appears not to). They do provide strategies to achieve this in the above document.
Flagstaff’s report consists of a document linking to an existing housing study. It does not seem to report some required information. For instance: it copies its forecast population growth where it should be providing an estimate for the number of housing units it will need to meet said growth.
Scottsdale
Unlike all other Maricopa County cities we’ve found so far, Scottsdale does not use population growth forecasts from Maricopa Association of Governments (MAG). Instead they are using a different model based on “census rate of growth.” This decision drops Scottsdale’s forecasted 2029 population by 19,000 fewer people than using MAG projections would.
This is not some unique quirk of the consultants they hired for the study either. The same firm conducted the Peoria assessment using MAG population projections. While the stated reason for this choice is a recent slowdown in population growth, Scottsdale’s attitude towards new housing raises questions as to whether this is an attempt to downplay their actual housing needs.
In the annual report, Scottsdale egregiously claims they are going beyond what state law requires for ADUs and adaptive reuse. This is laughable.
Scottsdale has excluded miles of land surrounding airports from allowing adaptive reuse and ADUs, excluding much of the city from state laws designed to boost housing production. Scottsdale has only gone beyond what is required of them when it would prevent new housing from being built.
Scottsdale does get credit for visibly posting both their five-year and annual reports on a designated webpage. This is the only Scottsdale housing decision we encourage other cities to copy.
What about other cities?
There are several large cities in Arizona that have either not published their housing assessments or have put them somewhere not easily accessible. As of writing this, we were unable to find documents from Chandler or Gilbert.
Phoenix and Mesa both have housing needs studies on their website, but they do not clearly note whether these are meant to satisfy what is required by SB 1162. After being contacted, Mesa confirmed that they intend for their housing strategy to cover the requirements. They appear not to clearly provide a total of current housing needs within their assessment.
Phoenix responded to our request with a link to make a public records request. The law states cities must publish the assessment.
Additionally, Phoenix and Mesa did not seem to publish their annual report alongside these assessments. They are not legally required to, but many cities did regardless. Mesa kindly sent over their annual report after being contacted for this piece.
Curiously, the AZ League of Cities has published a document with current and projected housing deficits of the missing cities. It’s not clear whether this is meant to satisfy the legal requirements of SB 1162 on behalf of the listed cities, as it is missing population and job forecasts for each city, as well as the current breakdown of single-family vs. multifamily land use for Phoenix.
A concern here is that some cities are trying to take advantage of this ambiguity, passing off prior reports which mostly check the boxes but which do not fully and clearly cover the information required by law.
What can policymakers do?
The Department of Housing should create a page listing both the housing needs assessment and annual report for every city. State lawmakers should also update the law to require that both the assessment and annual report be published on a clearly marked and accessible city web page.
Lawmakers should also consider two things. As the housing crisis has grown, cities have argued that they alone must maintain an iron grip over housing and land use policy. Despite this, most lacked the capacity to provide basic information about how their policies were impacting housing supply, arguably the most important element. Nearly every city we looked at outsourced to a third-party consulting group to assemble their assessments.
They should also consider the metrics cities are being asked to measure. Housing needs by income levels provide a false sense of certainty. Building at scale will push down the costs of existing housing stock, create new housing options for higher income households, and free up subsidized, affordable housing for those with the most need.
Measuring the number of permits denied also conceals how the permitting process works in practice. Many projects are never formally denied: they never come before the city in the first place or are withdrawn as it becomes clear the city is unlikely to approve the project.
An example of this occurred last year in Tempe, with a proposed apartment building along the streetcar. As it became clear that city council would not support the project, it was withdrawn by the builder. This was effectively a denial of 363 housing units, but it was not a formal denial and not reported as such.
Policymakers should instead focus on the overall number of homes being built by each city, especially relative to their populations. Underbuilding is what got us into this crisis, only building abundant housing for all will get us out.
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