Arizona Leads the Nation in Housing Construction in 2024

Categories: Arizona Business NewsArizona State News

New housing developments in Phoenix, AZ showing the surge in construction.

News Summary

Arizona has emerged as a leader in housing construction, with Maricopa County adding over 38,000 units in 2024. This growth comes amid an affordable housing crisis, necessitating urgent solutions. Phoenix has achieved its housing goals ahead of schedule, despite expected slowdowns due to rising costs. New projects like La Esperanza Terrace offer affordable options but challenges remain as homelessness continues to rise.

Arizona has emerged as a leader in new housing construction in 2024, according to data released by the Census on May 15. Maricopa County topped the nation, adding 38,310 housing units last year, surpassing notable regions such as Los Angeles County and Harris County, Texas, each of which added approximately 32,000 units.

Builders in Maricopa County significantly outpaced their counterparts in the rest of Arizona, where Pima County, the state’s second-largest area, added only 5,800 housing units. This surge in construction comes amidst a growing affordable housing crisis that Arizona faces, prompting an urgent need for more residential properties.

The demand for new homes is particularly pressing in Tucson, where local government reports indicate a need for 35,000 new homes over the next decade to meet the increasing population and demand for affordable living spaces. In response to this urgent need, Phoenix Mayor Kate Gallego announced that the city has built or retained 50,000 new housing units since 2020, achieving its housing goal set for 2030 five years ahead of schedule.

However, experts warn that the rapid pace of housing construction witnessed in 2024 may not continue into 2025. Factors contributing to this potential slowdown include possible tariffs on construction materials and increased development fees in Phoenix. Data indicates that home building across Arizona decreased by 20% in March 2025 compared to March 2024, highlighting the volatility in the housing sector.

One notable project contributing to the affordable housing landscape is La Esperanza Terrace, which is set to begin leasing units this month in Phoenix. This complex will provide 96 units targeted at individuals and families earning at or below 60% of the area median income. The complex includes various amenities such as a community room, BBQ area, picnic tables, a computer lab, fitness center, community garden, bike racks, covered parking, a playground, and security cameras to ensure safety.

La Esperanza Terrace stands out as the largest permanent affordable housing development undertaken by UMOM New Day Centers, an organization committed to supporting the homeless. Since its inception, UMOM has constructed over 900 affordable units in the region through cooperative partnerships. The project has received substantial funding, including $6 million from Maricopa County’s allocation of the American Rescue Plan Act (ARPA) and $1 million in funding from Phoenix’s own ARPA resources.

In total, Maricopa County has committed more than $128 million from ARPA funds for initiatives aimed at enhancing affordable housing. This effort is part of the broader Housing Phoenix Plan, which aims to create or preserve 50,000 housing units by the year 2030.

Despite these recent investments in housing, Arizona continues to grapple with rising homelessness. The increasing costs of housing have made affordability a significant issue in the region. Currently, over half of renter households in Phoenix are considered cost-burdened, spending more than 30% of their income on housing expenses.

A land-use agreement for La Esperanza Terrace ensures its commitment to affordable housing for at least 40 years. Additionally, a second similar affordable housing project for the Alhambra Elementary School District is currently in the works, underscoring ongoing efforts to alleviate the housing crisis in the region.

Maricopa County officials have continuously stressed the importance of increasing affordable rental options, especially as eviction rates rise. The City of Phoenix has committed to transforming vacant lots into designated areas for affordable housing development, signaling a proactive approach to tackling the growing housing challenges within the community.