Arizona’s housing market is at a crossroads. As the state continues to experience rapid population growth—Over 100,000 people move to Arizona on an annual basis-–the demand for affordable housing has outpaced supply, leaving many families struggling to find reasonably priced homes. In 2025, it is imperative that our state legislature makes affordable housing a top priority, implementing policies that encourage responsible development while addressing the pressing needs of our communities. 

As Arizona’s population continues to grow, the demand for housing has driven a surge in new construction. However, the majority of these developments consist of Class A luxury apartments, which remain out of reach for many residents—even those who are financially stable. Additionally, with high construction costs and elevated interest rates, there are currently no significant plans to build new apartment communities in 2025 and 2026. The projects being completed today were planned in 2020 and 2021, and as previously mentioned, they do not address the need for affordable housing.

At Neighborhood Ventures, we have seen firsthand how innovative solutions can make a real impact. In May of last year, we completed the rezoning process for Venture on Country Club in Mesa, successfully transitioning it from a hotel into affordable long-term rental units. This project, done in collaboration with the city of Mesa, is a testament to what can be achieved when the public and private sectors work together toward a common goal. By repurposing existing structures, we added much-needed housing inventory to the market without the lengthy timelines and high costs associated with new construction.

All this to say, this project was not without its challenges. Rezoning took longer than anticipated, and we are still finalizing key details to complete the transition. Despite obstacles that could have derailed the project, our hard work has paid off, and the impact on the community has made every effort worthwhile. Complex city regulations extended the approval process to over two years, pushing back our expected timeline for next steps, including exterior renovations.

The challenges facing affordable housing in Arizona are multifaceted. High land prices, restrictive zoning laws (as we know), and increasing construction costs have all contributed to a shortage of rental units and entry-level homes. Additionally, rising mortgage rates and inflationary pressures have made homeownership unattainable for many. This has resulted in a growing number of residents being priced out of their communities, forced to move further from job centers, or left with few viable housing options. 

Our Lead Regional Property Manager, Heather Andrews, put it this way, “Arizona's booming economy can't leave its workforce behind. Working families are struggling to make ends meet. More than half of renters in Arizona are cost-burdened, meaning they spend more than 30% of their income on housing. This includes teachers, nurses, and first responders – the very people who make our communities strong. By expanding access to affordable housing, we're not just helping individuals; we're strengthening the foundation of our entire state. Investing in affordable housing isn't just the right thing to do – it's the smart thing to do. When people have stable housing, they're healthier, more productive, and more likely to contribute to the economy."

To address this crisis, Arizona lawmakers should consider policy changes that encourage more affordable housing development. Expedited permitting processes, zoning reform to allow for higher-density projects, and financial incentives for developers who build workforce housing are all tools that can be leveraged to improve the situation. Furthermore, adaptive reuse projects—like our conversion of Venture on Country Club—should be supported as a cost-effective way to increase housing supply in a shorter amount of time than it would take to build.  

The good news is that municipalities across the Valley are recognizing the urgency of this issue and taking proactive steps. Mesa’s leadership in supporting housing solutions has been commendable, and other cities would do well to follow suit. By fostering an environment where developers and investors can create housing solutions that serve a broad spectrum of residents, we can help ensure Arizona remains an attractive and affordable place to live.  

Arizona’s continued growth and economic prosperity depend on solving the affordable housing challenge. If our state legislature takes decisive action in 2025, we have an opportunity to make a lasting impact—one that benefits families, businesses, and communities alike.