The Problems Are Enormous. Our Shovels Are Small. So We Dig Strategically.

Reflections from the Arizona Department of Housing Conference and the 2025 State of Housing in Arizona report

I recently had the opportunity to join a panel at the Arizona Department of Housing Conference focused on the findings of the Arizona Research Center for Housing Equity and Sustainability’s 2025 State of Housing in Arizona report. The report confirms what families, employers, developers and community organizations across our state already feel every day: Arizona’s housing challenge is not one problem. It is a series of connected pressures affecting whether people can find a home, afford a home, remain in a home and build a stable life there.

The scale can feel overwhelming. During the panel, I put it this way: the problems are enormous, and our shovels are small.

That is not an argument for thinking small. It is an argument for being strategic and surgical—understanding exactly where a public-purpose organization can intervene, choosing tools that unlock other capital and concentrating our effort where it can change an outcome.

What the report tells us

Arizona is still growing, but its housing supply has not kept pace. Since 2010, the number of households in the state has grown nearly twice as fast as the number of homes—25% compared with 14%. The mismatch affects nearly every part of the housing system.

For aspiring homeowners, both prices and borrowing costs have moved further out of reach. The report found that Arizona’s typical home value reached $428,156 in 2024, approximately $160,000 more than in 2019. At the same time, mortgage rates rose sharply, increasing monthly costs for buyers and discouraging existing homeowners with lower-rate mortgages from selling.

Renters are under even greater pressure. Fifty-four percent of Arizona renters are cost-burdened, meaning they spend at least 30% of their income on housing. Since 2010, rents have risen faster than renter incomes, and the gap has widened dramatically since 2019. Only 39% of Arizona workers earning the median wage for their occupation can afford a one-bedroom apartment; only 25% can afford a two-bedroom.

The consequences extend far beyond household budgets. Arizona recorded 106,587 eviction filings in 2024—the highest number on record—and 14,737 people were counted as experiencing homelessness. Nearly half were unsheltered. The number of families with children experiencing homelessness also rose 15% in a single year.

Here in Pima County, the warning signs are especially sharp. The ARCHES county profile found that 31% of households are housing-cost-burdened, the second-highest rate in Arizona. Pima County also has the state’s second-highest rate of eviction filings and its third-lowest homeownership rate. Meanwhile, our population is aging, making the ability to safely remain in an existing home increasingly important.

Innovation needs investment—and discipline

Our panel generally agreed that Arizona is not standing still. State and local leaders are advancing meaningful policy reforms, reconsidering land-use rules and creating new tools to make housing easier to build. That willingness to innovate matters.

But policy reform is not self-executing. A project can have the zoning, approvals and public support it needs and still fail because the financing does not work. Arizona has not yet matched the scale of its housing need—or the ambition of its policy agenda—with financial investment at the scale required to implement it. We cannot regulate, streamline or innovate our way around a capital gap.

The panel also surfaced a related tension: we often ask housing projects to carry the weight of every other public priority. We want housing to be affordable, sustainable, energy efficient, resilient, built with locally sourced materials and local labor, compliant with federal procurement requirements, located near transit and delivered without additional subsidy. These are worthy goals. Some, including Build America, Buy America requirements, are mandatory when applicable.

But the cumulative cost is real. Affordable housing deals already operate on razor-thin margins, and every added requirement affects the capital stack, timeline or operating budget. If we attach lofty expectations without providing the funding needed to meet them, we can make an otherwise viable housing project impossible—and produce none of the outcomes we wanted.

This is not an argument for abandoning sustainability, labor standards or community benefit. It is an argument for honesty and prioritization. We should identify the essential outcome of each investment, understand the combined cost of our requirements and fund the additional public benefits we expect a project to deliver. A housing development can contribute to many goals, but it cannot be the place where we try to solve every social problem for free.

There is no single program that can meet a challenge this broad. Tucson needs more housing, more attainable paths to ownership, stronger tools to preserve existing homes and a workforce capable of delivering all three. At the Tucson IDA, that has led us to organize our housing work around four practical imperatives: build it, buy it, stay in it and support the workforce behind it.

Build it

We cannot improve affordability over the long term without producing more homes—particularly homes that ordinary working households can afford.

The Tucson IDA uses tax-exempt bonds to help finance multifamily housing at a scale conventional funding alone often cannot reach. Over the past year, our bond activity helped move forward more than 500 multifamily units. But financing the final project is only part of the challenge. Promising developments frequently stall much earlier because emerging and nonprofit developers lack funding for site control, design, feasibility work, entitlements and other predevelopment costs.

That is why the Tucson IDA is piloting a Neighborhood Catalyst Fund to fill critical predevelopment and “missing middle” capital gaps. We are also investing in nonprofit and emerging-developer bootcamps so that more local organizations and developers can assemble viable projects, build the right teams and become ready for capital.

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Our shovel is most useful where a relatively targeted investment can unlock a much larger housing outcome.

Buy it

Building supply matters, but families also need a realistic way to purchase the homes that already exist. High prices, mortgage rates and upfront costs have pushed homeownership further away for many Arizona households. These barriers are not evenly distributed. Historic gaps in income, inherited wealth and access to fair financing continue to shape who becomes a homeowner and who benefits from the stability and wealth-building that ownership can provide.

One of the most interesting tensions raised during our panel was whether scarce public resources should prioritize multifamily production over single-family homeownership programs. The case for multifamily investment is compelling: when the need is enormous, financing more homes at a lower cost per household can appear to be the most efficient use of limited dollars. We absolutely need multifamily housing, and substantially more of it.

But efficiency cannot be our only measure of impact. If we pursue the greatest number of units while ignoring who has access to ownership, we risk reinforcing a housing system in which some Arizonans are offered an opportunity to rent while others retain the opportunity to own, build equity and pass wealth to the next generation. Given Arizona’s persistent racial homeownership gaps, that is not a neutral outcome.

This is not a choice between renters and homeowners, or between multifamily and single-family housing. A healthy housing system needs a range of housing types and tenures. The strategic question is not which one solution wins; it is where each public dollar can address a market failure that would otherwise leave people behind.

The Tucson IDA’s down payment assistance programs help qualified homebuyers bridge that gap. Through our partnership in Arizona is Home, we deployed more than $1.5 million in down payment assistance in the past year. Across our broader homeownership work, more than 75% of the households we serve are people of color. Down payment assistance does not make every home affordable, and it cannot substitute for adequate supply. But for a mortgage-ready household whose primary obstacle is cash at closing, it can be the precise intervention that turns years of preparation into a set of keys.

Stay in it

Housing policy cannot focus only on creating units and purchasing homes. We must also help people remain safely and affordably in the homes they already have. That need will grow as Arizona housing stock ages. For an older adult or a household living on a fixed income, a failing air conditioner, an unsafe bathroom or an urgent home repair can quickly become a health crisis, a financial crisis or a forced move. In Southern Arizona, energy efficiency and heat resilience are not simply environmental concerns; they are housing-stability tools.

Through Groundswell Capital’s EarthWise program, homeowners can finance health, safety, energy-efficiency and resilience improvements. These investments can lower operating costs, make homes safer and extend the useful life of our existing housing stock. Helping someone stay in a home they can already afford is often faster, less expensive and less disruptive than trying to replace that home after it is lost.

Support the workforce behind all three

We cannot build, preserve or improve housing without people who know how to do the work. Arizona’s housing conversation must therefore include the workforce that designs, permits, finances and constructs homes—and especially the skilled tradespeople who turn plans and capital into completed projects. A shortage of skilled labor increases costs, slows production and constrains the number of projects our region can deliver.

Through Juntos, Groundswell Capital supports pathways into the skilled trades through training, worker-owned business development and accessible capital. This work addresses two needs at once: expanding the workforce required to meet our housing goals while helping local workers build businesses, ownership and long-term economic security of their own.

Supporting the housing workforce also means building the capacity of local developers, nonprofits and community partners. If we want solutions that reflect Southern Arizona, we need a deeper bench of people here who can take a project from an idea to a closing—and then operate it successfully for decades.

Small shovels, used together

The ARCHES report makes clear that Arizona’s housing challenges are structural. No single lender, developer, city, state agency or nonprofit has a shovel large enough to solve them alone.

But small does not mean insignificant. A bond issuance can unlock hundreds of apartments. Predevelopment capital can rescue a viable project before it stalls. Down payment assistance can close the final gap for a prepared buyer. A home repair can allow an older adult to remain safely housed. Workforce investment can create the crews and businesses that make the next project possible.

The task before us is to connect these interventions: align policy with capital, capital with capable projects, projects with skilled people and new production with preservation and access.

We must also match our expectations with resources, so that public requirements strengthen projects instead of quietly making them unfinanceable. That will require sustained collaboration—and substantially greater investment—from the State of Arizona, local governments, housing authorities, philanthropy, financial institutions, developers, community organizations and residents.

At the Tucson IDA, we know the scale of our tools. We also know their power when they are aimed carefully and combined with those of our partners.

The problems are enormous. Our shovels are small. So let’s be strategic about where we dig—and let’s dig together.