I was able to attend the AAED state conference in late April. As part of the conference, I facilitated a workshop that was more facilitated discussion than presentation. What was clear was that wage earners across the state making between $45,000/yr gross and $95,000/yr gross make us the majority of people seeking housing, and that entry level housing product is few and far between.
The truth is wage earners earning $45,000/yr to $95,000/yr gross live on a considerably less take home or net income. Usually that net income looks more like $43,000/yr to $80,000/yr.
For a rental property to be easily afforded by these households, rents need to be no more than 25% to 30% of the household net income. That means rents in the $885/month to $1,800/month range.
For purchase product, the price point varies depending on downpayment and interest, but here is a sample of price points if we only consider principal and interest payments:
$250,000 house with 10% down at 5% interest = $1,125/month P&I payment
$250,000 house with 10% down at 6.7% interest = $1,535/month P&I.
Follow those payment assumptions and the max price point for this group wage earners becomes $375,000. At
$375,000 and 10% down at 5% interest the P&I payment would be about $1,811/month. That same $375,000 house with 10% down at 6.7% interest would have a $2,261/mo P&I payment.
At the Arizona State Legislature, we have been seeing attempts to preempt local zoning over the past 3 years, but this year it has really ramped up. Mostly, the discussion revolves around “affordable” government program housing. The perplexing part of the various legislative proposals is their non sequitur nature. Here are a few examples:
1 - Proposed bills that would no longer allow a city or town to designate where residential development could be built. This of course means cities and towns who have adopted zoning and are mandated by state law to produce a voter approved General Plan, with public review a key element of planning, would be in conflict with the law itself.
2 – State legislation that tries to mandate setbacks, driveways, garages, and other specific elements of housing. Some of the bills I have read require cities and towns to not have a minimum size driveway. And those same bills set the max required driveway length at 10 feet. Have you measured your car, SUV, Truck or mini van? Camry’s are 16 ft long, SUVs, trucks and minivans are longer with 20 ft being common.
3 – State legislation that seeks to take away a local community’s ability to require streets wide enough for on street parking in two directions and the ability of emergency, delivery and other vehicles to traverse the street. At the same time in the same piece of legislation, there is a prohibition of mandated off street parking.
City of Chandler is updating several of its codes. You can read the proposed changes and learn more at www.weservgad.org.
The cities of Surprise and Peoria are seeking public input on housing needs in the community.
Those in the Douglas INA with water rights is to secure those grandfathered water rights in the new AMA. The application to preserve grandfathered water rights is March 1, 2024. If the application is not received by that deadline, water rights will be relinquished forever.
Our next government affairs orientation and committee meetings are on June 7th. The orientation will be from 9:30am to 10:30am at our Peoria office. The government affairs meeting will be immediately following at 10:30am.
You may attend these meetings in person or via zoom. Go to weservgad.org or to weserv.realtor to register to attend in person or via zoom.
Song Credits:
WEPA Song Credits: "Wepa" Kevin MacLeod (incompetech.com), Licensed under Creative Commons: By Attribution 3.0 License, http://creativecommons.org/licenses/by/3.0/
WERQ Song Credits: "Werq" Kevin MacLeod (incompetech.com), Licensed under Creative Commons: By Attribution 3.0 License, http://creativecommons.org/licenses/by/3.0/
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