The latest housing numbers don’t look good. According to HUD data, home construction in Arizona has fallen to its lowest rate since the start of the pandemic. This is a serious problem; fewer homes will only drive prices higher, leaving Arizonans struggling to pay their mortgages or find affordable places to settle down. 

Why the slowdown? Blame a perfect storm of rising interest rates, surging material costs, and labor shortages. While this is a national issue, Arizona has a lot to lose. For decades, competitive tax rates and a booming economy have attracted top-tier jobs and talent from across the country. 

But to keep those workers, we need homes they can actually afford. 

Instead, we’ve entered a “housing stalemate.” Buyers are waiting for prices to drop, and sellers are refusing to lower them. This staring contest risks turning away homebuilders who see little movement in the market. Indeed, in May, home construction plummeted by 8.5 percent compared to last year. If this trend continues, the resulting shortage will cause prices to spike even further. 

Fortunately, state leaders can help avoid this fate by streamlining the building process. 

Recently, Governor Katie Hobbs signed SB 1566, a bill introduced by State Senate President Warren Petersen that establishes clearer timelines for the municipal permitting process. Predictability is a step in the right direction for everyone involved. While fluctuating material and labor costs present ongoing challenges for the industry, ensuring that developers and local governments can rely on a consistent, efficient approval process will help incentivize the new construction our state desperately needs. 

We must also apply this forward-thinking approach to our water supply. Governor Hobbs’ ongoing overhaul of Arizona’s water regulations highlights the need to strike a delicate balance. Protecting our environment and securing our aquifers is absolutely essential for Arizona’s future. As we champion these necessary conservation efforts, we must also work collaboratively to secure the sustainable water solutions needed for smart development, ensuring we don’t inadvertently lock working families out of homeownership. 

Algorithmic software that helps landlords calculate proper rent rates is a reform target of some lawmakers, with some even trying to ban these programs. But while some outlier anticompetitive practices from some of these software companies may require addressing, there’s no evidence algorithms make housing more expensive. In fact, when demand for housing goes down, the data shows these AI tools convince landlords to cut their rental rates faster. And so, interfering with this technology can quickly turn into a slippery slope. Ultimately, we cannot confuse the tools used to measure the market with the root cause of our affordability crisis. 

The problem isn’t landlords, renters, realtors, or buyers; it’s a severe lack of supply. When supply falls behind demand, prices rise. The solution isn’t to search for villains or scapegoats— it’s to build more homes. 

If we want Arizona to remain one of America’s fastest-growing states, we need to break this housing stalemate now. Let’s give our people the opportunities they need, starting with a good, affordable roof over their heads. 

Anna Tovar served as Mayor of Tolleson, Arizona, as State Senator, and as a State Representative. She was a member of the Arizona Corporation Commission from 2021 to 2025.