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Study: 97% of Scottsdale Homes Taken or Unaffordable

By November 23, 2022January 17th, 2023No Comments

By Sam Kmack | Arizona Republic

Researchers presented a rosy outlook for Scottsdale’s affordable housing situation at last week’s city council meeting. They identified a “surplus” of moderately-priced apartments, for example, and found that Scottsdale had relatively more units available for newcomers than similar cities such as Tempe and Pasadena, California.

But a closer look at the city-commissioned report shows those positive findings were far from solid and obscured the fact that Scottsdale has nearly run out of all available housing, let alone units that would be affordable for middle-class residents.

The city only has between 2,600 and 7,600 housing units available, after vacation homes, short-term rentals and other unavailable “vacant” homes are taken out of the equation. That’s less than 5% of the city’s total 139,000 units — a vacancy rate that’s lower than the eight other cities in the report and potentially one of the lowest in the United States.

The situation is even worse for those who make less than $93,000. Just half of Scottsdale’s available units would be affordable on that salary given the cost breakdown of the city’s occupied homes, meaning that at least 97% of Scottsdale’s housing stock is neither available nor affordable for middle-income earners.

The revelation has stoked fears among some officials that the city will be unable to attract workers, businesses and new families − something that could force Scottsdale to raise taxes in order to keep itself afloat.

It’s not just newcomers whose earnings can’t pass muster in Scottsdale’s out-of-whack housing market, either.

“(A quarter) of the people who own homes in Scottsdale could not afford to buy their homes today,” Councilmember Linda Milhaven said about the study, which was conducted by a national consultant firm called Design Matrix Group. “That’s really concerning to me.”

The research ultimately highlights Scottsdale’s ongoing shift from an upscale tourism town to an ultra-exclusive community where only the very wealthy can afford to live.

The trend has virtually eliminated young families and workers from the city’s housing market, which won’t bode well for the city’s public financing strategy if it continues. Scottsdale has long depended on business taxes to fund a wide range of expensive public amenities while keeping property taxes dirt cheap.

A dearth of middle-class housing likely means fewer economic development opportunities, which could force Scottsdale to start raising taxes or making major cuts to city spending.

“When you cut off economic development, young folks, families with young children and workforce talent, you are going to have to either increase taxes or decrease services,” Councilmember Tammy Caputi said. “(If) you push all of that away then we’re going to have to change the way the city generates revenue. We’re going to pay for everything somehow.”

The fix could depend on baby boomers, developers

Caputi and Milhaven are the only two pro-development officials on Scottsdale’s seven-member city Council, and the latter will be replaced by limited-development candidate Barry Graham in January.

Millhaven’s departure and the council’s longstanding preference to “preserve Scottsdale’s character” by keeping as much open space as possible makes it unlikely the city will tackle its housing problem by ramping-up development.

Instead, city leaders are counting on baby boomers selling their houses, plus the construction of new homes that have already been approved but are sitting in the city’s “development pipeline.”

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