1 Million More People in Metro Phoenix in the Next Decade? Where Will We Put Them?

Article originally posted on AZ Central on January 27, 2020

Metro Phoenix is expected to grow by 1 million people during the next decade.

That will be like adding a city the size of San Jose, California, or Austin, Texas, to the Valley.

The billion-dollar question is where all those new residents will live.

Most of the available land is on the edge of the West Valley and deep into Pinal County in the southeast Valley.

About 5 million people already call metro Phoenix home, and the region already faces infrastructure and housing affordability issues.

Mark Stapp, director of the Master of Real Estate Development program at Arizona State University, acknowledges the challenges.

“There are opportunities with our expected growth, but there are also issues that need to be addressed now,” Stapp said at an ASU event this past week called “Where will we put another 1 million people?”

Top Arizona developers and planners attended the meeting, which focused on how to accommodate the Valley’s next growth spurt.

Valley growth shift

About 35% of the Valley’s current population lives in Phoenix, 34% live in the East Valley, 22% in the West Valley and 10% in Pinal County, according to MAG.

In 25 years, metro Phoenix is expected to grow to 7 million people.

The growth is expected to shift with the population spread out like this: 30% living in Phoenix, 27% in the East Valley, 28% in the West Valley and 15% in Pinal.

Roads and water

But that growth cannot happen without the roads, water, sewer, electricity, jobs and shopping to support and serve it.

A massive investment in infrastructure is necessary for the thousands of new homes, retail centers and job hubs that would accommodate another million people.

Historically, new Valley homes have gone up before the freeways to serve them, straining existing transportation systems.

Eric Anderson, executive director of the Maricopa Association of Governments, said about 50 percent of Pinal residents currently commute to Maricopa County.

“About 100,000 people are stuck on Hunt Highway every day because there’s not enough money to fund that roadway’s expansion,” he said.

Pinal’s sales tax funding for freeways is about $18 million, barely enough to fund an interchange.

In the West Valley, an extension of the Loop 303 and construction of a new Interstate-11 west of the White Tanks, are also behind because of a lack of freeway funding.

Water is a wild card. It’s unknown whether every growth area will have a guarantee of adequate water supply for the foreseeable future. There are long-term questions about whether there is enough water to accommodate the expected growth in places such as Pinal County and Buckeye.

A recent report from ASU’s Kyl Center for Water Policy says there likely won’t be enough water available from the Central Arizona Project in the long term to replenish the groundwater used by all of the homes that are being planned.

“Metro Phoenix has plenty of land for growth,” said real estate expert Greg Vogel, CEO of Arizona Land Advisors Organization. “The issue is the cost of infrastructure and services for the land to be developed.”

More affordable rooftops

Metro Phoenix’s relatively affordable housing prices have long driven the region’s growth. But rapidly rising home prices and rents are outpacing income gains, making the Valley much less affordable.

Homes priced at $300,000 or below — that Valley residents making the area’s median income can typically afford — already are in short supply.

To keep pace with growth, home builders need to construct more houses than they are now with prices that new residents can afford. About 23,000 new homes are expected to go up Valleywide this year.

“Builders can’t bring homes to market fast enough to meet demand now,” Arizona housing analyst Jim Belfiore said at the event. “That is pushing up prices, and pricing out a growing number of people from being able to buy.”

Zoning changes to allow greater density in new communities could help, most of the group agreed. But that would be up to Valley cities.

More jobs also are needed near Valley edge communities where new affordable homes can go up. Long commutes for residents mean higher transportation costs and make the decision to live in the outskirts less affordable.

“We have to watch our affordability, water, air and transportation challenges,” Vogel said. “We are doing better than other big metros handling those issues, but we could do a helluva lot better.”