The Grand Canyon State was the most popular place in America to move to last year, but the state isn’t keeping up with rising demand for homes. In fact, Arizona’s Department of Housing cautions that we’re short 270,000 housing units, and that shortfall increases prices and makes it harder every day for people to find homes. Arizona is facing a housing affordability crisis—and the blame lies largely on the shoulders of local elected officials.
It’s time to get serious about solving the crisis. We can start by eliminating the needless zoning rules that block affordable housing.
These restrictive land-use policies, which cities and municipalities across the state enforce, make it too expensive or time-consuming for developers to construct new housing or perform renovations to accommodate those in need of living space.
This is nothing new, nor is it a consequence of Covid-era supply chain problems. It’s a chronic problem that has only recently reached crisis levels nationwide. In fact, a study by the National Association of Home Builders showed nearly a 30% increase in the cost of complying with building regulations from 2010 to 2015—long before recent problems with shortages or inflation. And for a taste of how bad the problem can get, simply consider California, where NIMBY-ism is a way of life, and where bureaucrats have spent decades making it prohibitively difficult to build new homes. Indeed, that’s one reason many Californians are now fleeing to Arizona.
As The San Francisco Chronicle’s Benjamin Schneider observes, NIMBYs and bureaucrats often claim restrictive land-use rules are necessary to protect “neighborhood character.” But using the heavy hand of government to “militantly preserv[e] their way of life and physical surroundings” imposes immense costs on neighborhoods and individuals who lack the resources or political influence to fight back. Economically speaking, land-use regulations benefit those fortunate enough to have homes by making it impossible for others to get their own.
Consider single-family zoning. Today, about half of Arizona residential land is zoned single-family, which worsens the housing shortage by making it harder to build the multi-family housing that people climbing the socioeconomic ladder need. Rezoning would alleviate the problem, but the rezoning process can take years and many thousands of dollars, thereby increasing housing costs. In 2021, zoning issues delayed or canceled the construction of over three dozen apartment complexes in the Phoenix area alone.
In fact, that’s why zoning was created in the first place: to eradicate “undesirables.” Beginning in the 1900s, cities from San Francisco to Atlanta used land-use restrictions as tools of segregation. And although the Supreme Court struck down explicit race-based zoning in 1917, cities still use indirect methods, from exclusionary zoning to eminent domain, to keep less-wealthy people from moving into better neighborhoods. It stands to reason: laws that make housing more expensive are necessarily going to benefit those with more money and political power—and that’s not going to be racial minorities. Even where city officials don’t intend to discriminate by race, legal limits on property use are going to have a disproportionate impact on America’s less well-off.
Many of these restrictions do little to protect public safety—their real purpose is to keep people from moving in and to stifle change in neighborhoods. That’s wrong. City officials should focus on enforcing legitimate rules against nuisances instead of passing broad restrictions that impose politicians’ preferred aesthetic or social values, violate the rights of property owners, and drive up housing costs.
But it’s not hard to fix things. Arizona lawmakers should: (1) eliminate excessive zoning laws that don’t directly protect public safety; (2) adopt streamlined permitting processes so that building permit seekers don’t face excessive delays and costs; and (3) require government to compensate landowners whenever regulations reduce their property value.
In a time where demand for homes is rising, it’s absurd and wrong to cling to regulations that block Arizonans from improving and developing their properties—restrictions that unfairly keep them from building multi-family housing, updating older homes, or even converting shuttered commercial properties into sought-after houses and apartments. If policymakers are serious about alleviating high housing costs, they should remove unnecessary regulations, protect property rights, and give homeowners a shot at living the American Dream.
Christina Sandefur is the Executive Vice President at the Goldwater Institute.