Phoenix is short nearly 60,000 units of affordable housing, according to the city, which changed its zoning laws and affordable housing trust fund guidelines in November to encourage more housing.
On Nov. 18, the Phoenix City Council passed new guidelines for the Phoenix Housing Trust Fund, which offers funding for affordable housing spaces. The new guidelines provide more formal procedures for how the fund can be used.
The changes came just a week before the city council unanimously approved its much-debated “middle housing” ordinance, which allows for up to four homes to be built on a single lot, according to Cronkite News.
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The city passed the ordinance to align with a 2024 state housing law, which requires all Arizona cities with more than 75,000 residents to craft housing rules to allow duplexes, triplexes, fourplexes and townhomes on residential lots within one mile of their central business districts.
Cities have until Jan. 1, 2026, to comply with the ordinance or risk having the state automatically override local zoning and allow such housing in those districts “without any limitations."
During the debate of the Phoenix zoning change, some residents applauded the new ordinance for helping to make Phoenix more affordable, while others worried it could damage the character of the city’s historic neighborhoods, 12News reported.
Current efforts to build affordable housing for Phoenix residents simply hasn’t been enough to address the need, said Phoenix Housing Department Assistant Housing Director Aubrey Gonzalez, speaking at Bisnow’s Phoenix Women Leading Real Estate Awards.
“Our housing production has not kept pace with population growth,’’ Gonzalez said at the Westin Kierland Resort & Spa in Scottsdale on Dec. 11.
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There once had been a large amount of affordable housing in the city in the early 2010s, and that’s what helped fuel Phoenix’s population growth, according to the city’s 2024 Housing Needs Assessment report.
The city added more than 162,000 residents from 2010 to 2020.
As the city grew, however, the housing stock became less affordable or harder to find, and an influx of new residents during the pandemic exacerbated the problem. The 2024 report also found that some higher-income households in Phoenix are occupying units meant for lower-income households.
The affordability gap is draining the budgets of Phoenix residents, and this has ripple effects on the city’s economy, Gonzalez said.
“More than 50% of Phoenix renters are cost-burdened, meaning they’re paying more than 30% of their gross household income towards their rent and utilities,” she said.
Phoenix’s population is reportedly 1.6 million people, living in nearly 631,000 homes. The city is the fifth-most populous in the U.S. Single-family housing makes up 67% of Phoenix's housing stock, and 59% of housing is owner-occupied.
This shortage exists despite the city’s multifamily market maintaining steady momentum through Q3, with record construction, solid occupancy, strong investment and balanced absorption, Colliers reported.
According to the assessment, city officials plan to add 213,000 households by 2050, representing a 1% annual growth rate, with most of the near-term growth concentrated within a few urban areas.
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