Solutions to affordable-housing crisis must also address education

The lack of affordable housing in Arizona is inextricably tied to education and employment, and effective solutions must address the whole picture, according to several experts who spoke Monday at the annual State of Our State conference.

“Housing at a Crossroads: Solving Our Housing Challenges” was the topic of the livestreamed event held by the Morrison Institute for Public Policy at Arizona State University. Andrea Whitsett, director of the Morrison Institute, said that last year’s conference on rural issues revealed that affordable housing is a major problem, leading to this year’s topic.

Several experts described the causes, effects and potential solutions:

Michael Crow, president of ASU, described how Arizona has a “fragile” economy, which conserves public resources and is dependent on relocations and low-wage jobs such as the tourism and service industries. This hampers the ability to create high-wage jobs, allowing residents to afford housing.

The No. 1 predictor of housing access and many other economic indicators is educational attainment, because it enhances the productivity, creativity and flexibility of the workforce, he said.

“People always say that I’m just pushing bachelor’s degrees,” he said. “No, I’m pushing housing equity. I’m pushing economic resilience. I’m pushing antifragile economies. Within those economies, not everyone has a bachelor’s degree.”

Crow said that only 20% of high school freshmen in Arizona end up with a bachelor’s degree – one of the lowest rates in the country.

“We’re importing college degrees and we’re not producing college degrees at the level we need to be competitive,” he said.

Arizona must address both education and housing, he said.

“We should be advancing low-income housing projects that have one objective — the educational attainment of the adults and children that live in the supported housing,” he said.

Dennis Hoffman, an economist and director of the L. William Seidman Research Institute at the W. P. Carey School of Business, said that the housing supply started to decline several years ago for two main reasons.

“The first was the bursting of the state’s biggest real estate bubble in history,” he said, leading developers to dramatically slow building.

“About that same time, we passed one of the toughest employer sanction bills in the country that essentially told tens of thousands of productive undocumented construction workers that they were no longer welcome in this state,” he said.

“This is a recipe for a shortage of housing,” he said, adding that the supply has not kept up with demand over the last several years.

Essential service workers, who make below the median income, have even been shut out of new multifamily housing, which has been targeted to higher-income renters.

The pandemic has exacerbated the wealth gap, as people who can work from home have fared well, investing money into their homes or buying new homes.

“The value of housing has increased some 18% over last year, and the median home is about $330,000 today,” he said.

Michael Neal, senior research associate in the Housing Finance Policy Center at the Urban Institute, described how Black and Hispanic people have fared much worse compared to white people in the housing market.

“We see that incomes were lower, there are fewer financial assets, including parental help, and lower credit scores, which can combine to limit access to home ownership,” he said. Fewer than half of Black and Hispanic households own their own homes compared with 72% of white households.

Black and Hispanic homeowners have less equity, lower home value and higher mortgage debt.

Since the pandemic, Black and Hispanic homeowners have been more likely to be behind on their mortgage payments and less likely to get forbearance.

“Forbearance is a key tool to keep you from losing your home and it keeps you from experiencing a decline in your credit score.”

Several housing experts weighed in on potential solutions during a panel discussion.

David Adame, president and CEO of Chicanos Por La Causa, said that every level of government and all partners must work together.

“I believe even local government can do more,” he said. “The city of Phoenix for years used only the money it received from HUD. There needs to be more commitment to look at the systemic problems.

“We need to get more stakeholders involved — utility companies, the private sector.”

Joan Serviss, executive director of the Arizona Housing Coalition, pushed for the restoration of the State Housing Trust Fund, a program created in 1988 and funded by the sale of unclaimed property.

“However, that trust fund, which in its heyday was $40 million, was sweptDuring the recession, the state legislation "swept," or moved, money from various sources into the General Fund. during the Great Recession and capped at $2.5 million,” she said.

“We really hope this pandemic has shown the importance of having a safe, stable place to quarantine and isolate, and we’re confident that next session, the legislature will take up these policies.”

Tania Simms, executive director of Verde Valley Habitat for Humanity, said that in her rural area, the focus is on repairing existing housing to keep people sheltered. This can be a problem because people who live in “nonstandard” housing, such as RVs or mobile homes, which many retired people do, are not eligible for funding assistance.

“We primarily look at repairs needed for health and safety,” she said. “We don’t have funds to remodel a home and bring it up to code.”

Cynthia Zwick, executive director of the anti-poverty agency Wildfire, warned of an impending wave of evictions and said that one barrier is complicated rental assistance programs.

“We have a number of families on the verge of being evicted and once those folks are evicted, it’s highly unlikely that they will be able to find housing,” she said.

“Quite a bit of money is being put into programs to help renters and landlords but one challenge we’re seeing is that there is no alignment for best practices. “They’re not consistent. Many are designed from a position of mistrust and we’re looking at a system that makes it difficult to get access.”

Sally Schwenn, Arizona market president for Gorman & Co., said that even with tax credits, there are funding gaps in building affordable housing, which is very expensive. She said a bill to adopt a state housing tax credit was sidelined earlier this year by the pandemic.

“There are waiting lists of more than 2,000 people waiting to qualify,” she said. “Developers need incentives.”

Jonathan Koppell, dean of the Watts College of Public Service and Community Solutions, said that it's important to consider the unique needs of homeless people and tribal communities.

“The methods for providing housing in tribal communities do not look like outside tribal communities,” he said.

“Instruments like mortgages and low-income housing tax credits do not apply in the same way. We must make tribal housing a priority.”

For homeless people, “a roof and a door is only the beginning,” Koppell said. That population needs supportive services in addition to housing.

“There is a plethora of solutions open to use. We just have to maintain our commitment to housing affordability and housing justice.”

Top image by iStock/Getty Images.