Growth

By Noel Stevens

Few know more about the inner workings of Chandler, Arizona, a booming city in the southern part of Phoenix’s metropolitan area, than Micah Miranda, its director of economic development. One of his roles is to make Chandler a place that attracts talented professionals, who are increasingly coming from out of state.

“Every morning on the drive in on the freeway, I see all these California license plates,” Miranda said with a chuckle. “They’re here; they’re everywhere!”

Miranda’s observation is evidence of a truth in Arizona supported by data. Phoenix is seeing a population surge fueled by out-of-state migration, one that is outpacing its current real estate market and quickly eliminating any hopes for a more affordable, suburban lifestyle in outlying cities like Chandler.

The 2020 census found that the Phoenix metropolitan area is currently the fastest growing in the nation. Chandler’s population specifically grew about 15 percent to 272,011 in 2020 from 236,123 a decade earlier. Projections from the Maricopa Association of Governments expect Chandler’s population to reach well over 300,000 by 2030.

A 2020 study by the same group found that Californians account for 19 percent of households moving to Maricopa County, which encompasses Phoenix and its metro area. More transplants hail from California than the next top three states combined.

Other suburbs are seeing similar growth. Buckeye, for example, a city in the western-most part of Phoenix, almost doubled its population between 2010 and 2020. Goodyear, which neighbors Buckeye, grew to almost 100,000 in 2020 from 65,275 residents in 2010.

In Chandler, the growth has been intentional. The economic development team and city officials target companies that bring jobs in high-tech manufacturing, automotive and aerospace technology, as well as IT and software development.

“Compatibility is important to us,” said Miranda, who emphasized that the city’s economic-development plan is not single-minded and takes the idea of being a “good neighbor” into account.

One of Chandler’s biggest economic success stories has been Intel, which first brought employees to Chandler in 1979 and now employs 12,000 people, making it the city’s largest employer. Plans are under way for Intel to expand and bring another 3,000 jobs to Chandler by 2024.

One side effect of all this expansion and economic development is its impact on the housing market. Homes are scarce and expensive. A study from Gruen Gruen + Associates found that Chandler is short about 23,000 affordable housing units.

“The city can only do so much,” said Miranda, despite mentioning possible zoning changes that, if approved, would shift some retail space to residential use.

Sharyn Younger, a real estate broker for Copper Summit in Chandler, describes the current market as “frenzied” and “insane,” and prices are going up astronomically. A 2022 analysis by the Cromford Report found that the median home price in greater Phoenix has almost doubled to $470,000 since February 2018.

Properties also are selling within days, and investors make up an increasing number of buyers, which limits the supply.

“I have buyers that call me crying,” Younger said. “They’re just not getting their offers accepted because of the competition.”

According to Arizona State University’s Morrison Institute for Public Policy, the entire state of Arizona is short about 270,000 units that are needed across all demographics, from affordable to luxury housing. Ashlee Tziganuk, who specializes in housing research at the Morrison Institute, says the shortage can be traced back to the 2008 Great Recession when homes stopped being built.

“Essentially, we just have never really caught back up with our housing stock…we’re just in a position right now where the supply is not meeting the demand,” said Tziganuk.

The housing crunch is not just happening in the suburbs. The impact of high prices and low supply is also being felt inside the city limits of Phoenix.

“I haven’t seen anything good,” said Ylenia Aguilar, a school-board member who serves Osborn, a district in central Phoenix. She cites a rise in homeless youth as her chief concern.

“I want to say growth is great and amazing, but it hasn’t been in my community,” Aguilar said. “We obviously did not plan for this growth, and we are not meeting the needs of the most vulnerable populations.”

Another effect of growth is increasing diversity. Chandler, a historically white area, is becoming more ethnically mixed. According to Census data, the percentage of Chandler’s white population has declined  to 58 percent in 2020 from 77 percent in 1990, and the percentages of all minority groups have been growing steadily.

Arizona at large is only expected to become more diverse. Eileen Diaz McConnell, a professor and demographer at ASU’s School of Transborder Studies, says that the Arizona Latino population makes up almost a third of the electorate.

This percentage is only expected to increase as first-generation Mexican immigrants continue come of voting age. In her research, McConnell found that over half the state’s population that is under 18 years old now consists of minorities.

“We know that racial diversification is increasing,” McConnell said.

McConnell points out that Arizona’s white population is both shrinking and getting older, and disparities between age groups are contributing to cultural conflicts.

“We have a lot of people who came here to retire,” said McConnell. “They are not interested in the quality of the schools, and they are not interested in paying more taxes.”

Some are seeing these tensions play out in real time, like Lindsay Love, the first and only black member of Chandler’s school board. Following her election in 2018, Love found herself the subject of death threats, online attacks and intimidation, which was driven by a white, fringe minority.

Love points to the city’s origin as a ranching and farming town and the rapid changes driven by the tech industry as the reasons behind these cultural clashes.

Legacy families “are not liking to see the change,” said Love. “I can understand it on some level; right next to my community was a farm, now it’s a Starbucks and some IT businesses.”

By Tahreem Ashraf

Lorraine Valenzuela’s small white house in downtown Chandler, Arizona, is dwarfed by a large apartment complex going up across the street and flanked on the other side by an upscale bed and breakfast where rents for casitas start at $298 a night.

Her modest home, which she rents for $1,100 a month, is a holdout in Chandler’s red-hot housing market and reflects how difficult it has become for residents to find an affordable place to live.

“The landlords do not have a top off; they think they can charge whatever they want,” said Valenzuela, a hotel worker. She added that she paid $500 a month for her last rental home, on the same street, but was forced to move when it was sold and converted into a wedding venue.

The sky-rocketing cost of housing is one of the biggest challenges faced by Valenzuela and other low-income residents in the Phoenix metropolitan area. Low inventory, a growing population, zoning restrictions that favor single family homes and increased labor costs for new construction are adding pressure to a housing market under extreme stress.

The current housing crunch is in sharp contrast to the development of the Phoenix area since the mid-20^th century when its climate and low cost of living attracted new residents, many of them retirees, from other parts of the country. The state thrived as a suburban hub, where the American dream of owning a single-family house was easily attainable.

Liza Kurtz, a research analyst at Morrison Institute of Public Policy at Arizona State University, said the 2008 recession was partly to blame for the region’s current housing shortage. After housing values plummeted in 2008 and the mortgage crisis left homeowners under water, new construction slowed and has not picked up enough to meet the recent growing demand, she said.

“The supply is so low and the demand is so high that it has pushed up the cost of home prices as well as rental prices to really an extreme,” Kurz said.

A growing population is exacerbating the housing situation.

The 2020 Census found Phoenix to be the fastest growing major city in the country. With a population of 1.6 million, it surpassed Philadelphia as the fifth largest city in the U.S. and recorded a growth rate of 11.2 percent over 2010.

The 10 largest cities all grew this past decade, and 8 of the 10 grew at a faster rate this decade compared to the last. pic.twitter.com/qHzF2XRKGk

— U.S. Census Bureau (@uscensusbureau) August 12, 2021

In an effort to increase housing stock, some municipalities in the Phoenix metro area have begun introducing multi-unit buildings, but existing zoning laws, which favor single-family homes, mean the process can be burdensome and involve re-zoning. In Arizona, about 878,000 acres of land is zoned for single-family homes and only 17,000 acres are authorized for apartments, according to the Maricopa County Association of Governments.

Other zoning policies hamper the development of higher-density housing, which would help alleviate shortages. Kurz points to the  Private Property Rights Protection Act, which states that if municipal governments change land use and zoning in a way that would lower property values in a neighborhood, they are required to compensate the property owners for their loss.

“It has an enormous chilling effect on a lot of development and zoning tools as municipal governments are worried that they will have to reimburse for the property value loss,” said Kutz.

Developers also experience public opposition to proposed multi-unit housing projects because some residents believe the necessary zoning changes in their neighborhoods will depress property values. The resulting protests often delay  projects.

“It is so deeply ingrained that people will really get scared when any sort of density comes in their neighborhood. So, you get a lot of nimbyism and people going to city council and saying we don’t want this in our neighborhood and a lot of times that really hurts people who need affordable housing,” said Ashlee Tziganuk, a research analyst at the Morrison Institute.

To the southeast of Phoenix, the city of Chandler is representative of the emerging housing crisis in the state. It has seen its population increase by 17 percent, since the recent census,  and is projected to grow 11 percent by 2030.

Billing itself as the “community of innovation,” Chandler has a history of high-tech job development, which has attracted people from different states adding to its population.

Chandler, too, is experiencing spikes in rent and a housing shortage, exacerbating the affordability issue across the city. According to a city government report on the state of affordable housing in Chandler, sale prices for homes and rental apartments across the economic spectrum are rising. From 2021-2022, the sale price of a three-bedroom house jumped 25 percent, meanwhile, the rental units saw an increase of 17 percent. The average cost for a three-bedroom home is $502,000 and the average monthly rent is $1,880 per unit.

Leah Powell, Chandler’s director of neighborhood resources, said when people at the higher-income end are not able to afford higher prices they start buying and renting homes previously attainable by middle-income residents. This puts added pressure on prices and reduces the inventory of affordable housing.

“We have a supply issue at the very top end of housing,” said Powell. “We have a higher-income population that is pushing the bubble for affordable housing.”

With all the controversy and uncertainty surrounding the housing market, Valenzuela fears she might not be able to hold onto her home, if the rent goes up as it has elsewhere in Chandler.

“They are forcing us to live in cars. We can’t pay rent,” she said. “You can see these places are going up and they are packing them as close and tight as they possibly can to rent out more.”

By Karina Aslanyan

In Scottsdale, AZ, the city’s Advanced Wastewater Treatment Plant – otherwise known as the Water Campus – sewage water flows in and drinking-quality water flows out. Although the recycled water is not likely to flow through household taps anytime soon, the plant is now demonstrating a small but important answer to recycling water in drought-plagued Arizona.

“We are one of the most advanced indirect potable reuse facilities in the world,” said David Walby, Water Reclamation Services Director at the Treatment Plant.

Arizona is at the fulcrum of two important and clashing trends: it is both one of the fastest growing states in the country and it is at the center of a water crisis in the American Southwest that is having rippling effects nationwide.

In May, the federal government announced plans to keep more water in Lake Powell on the Arizona-Utah border, instead of releasing it to Lake Mead in Nevada—the first time the government has taken such action, which will lead to cuts in water people can use in Arizona and elsewhere. Officials say that both reservoirs are at their lowest points ever.

Amidst this crisis, recycled water has become a key part of the water-shortage solution for many cities. Every year, the Water Campus returns over 1.7 billion gallons of purified recycled water into regional aquifers, via the Advanced Wastewater Treatment Plant. AWT can treat up to 20 million gallons of water a day, making it one of the largest indirect potable water reuse facilities in the world. The AWT takes so-called tertiary effluent water, which has already been recycled for irrigation purposes, and further purifies it using membrane ultrafiltration, reverse osmosis, and ultraviolet photolysis.

To understand the problem that the AWT plant is trying to address, it’s important to understand where Arizona’s water supply comes from and why those sources are now endangered. Today, Arizona is in the midst of a 20-year megadrought, brought on by the decline of the Colorado River, the state’s main source of drinking water. Additionally, the river supplies water to seven other states and Mexico. Around 40 million people rely on the river as a primary source of water for both indoor and outdoor use. Produce like lettuce, vegetables, and fruit are all reliant on the Colorado River, which irrigates over 5 million acres of agriculture in Arizona, California, and Mexico alone.

In Arizona, water coming from the Colorado River, as well as ground water, follows a strict allocation system that gives priority to large cities – like Phoenix and surrounding Chandler and Scottsdale – as well as Native American tribes. The latter won their allocations via the 1908 Supreme Court decision in Winters v. United States. Despite this, many tribes still suffer from water scarcity due to issues such as lack of water infrastructure. As a result of a complicated history of agreements with the state government, farmers in Arizona are last in line for Colorado River water and bear the brunt of the drought.

“There’s a need to move away from relying on Colorado River supplies as the primary supply of water,” said Sarah Porter, Director of the Kyl Center for Water Policy at Morrison Institute of Arizona State University. “We have to somehow make an adjustment to having a lot less water from the Colorado River, and that’s tough.”

Outside of recycled water, Arizona has also turned to ground water, which is being rapidly depleted, leaving a grim impact on the environment. The extraction of ground water creates fissures and subsidence – land sinking when the water that was filling a void within the ground is removed. “We have some areas in the valley where we have subsidence of upwards of 15-16 feet,” noted Walby.

To prevent the depletion of groundwater, Arizona passed the Groundwater Management Act in 1980. The act limits the use of mining water and requires that water taken from the ground be replaced to prevent subsidence.

One of the treatment plant’s major objectives is to replenish the aquifer holding ground water. What may come as a surprise, however, is that their only other objective is supplying water to golf courses. Through what is a public-private partnership known as the Reclaimed Water Distribution System, the Water Campus delivers 20 million gallons of recycled water to 23 golf courses in northern Scottsdale.

Golf courses are the biggest water users in Scottsdale and many other cities throughout Arizona; thus, they represent the Water Campus’s greatest opportunity for helping the municipality conserve water, according to Walby. One standard 18-hole golf course requires approximately a million gallons of water per day.

While Scottsdale’s golf courses may be its biggest users of outside water, they are also a huge economic engine, bringing in an estimated $500 million a year through tourism. While some golf courses have looked at introducing synthetic turf as an alternative to the high-maintenance grass, turf is not suited to the Arizona climate because it absorbs heat much more than grass.

Cities throughout the state have created incentives to encourage residents to preserve water used in outdoor irrigation, which accounts for about two-thirds of Arizona’s water usage, such as tiered water rates. That, in turn, is intended to reduce the prevalence of grass lawns, which require immense amounts of water to survive Arizona’s desert heat, which can reach as high as 122°F in summer.

“It’s a built-in incentive to go ahead and use the water that you need for indoors, but after a certain volume the next level of water is much more expensive,” explained Porter.

Additionally, cities like Scottsdale have been pushing residents to turn to native gardening. The city has introduced tax rebates for residents that choose to remove grass lawns and replace them with native vegetation, synthetic turf, or gravel.

The one place where the Water Campus’s recycled water is unlikely to flow, however, is in residential taps. In 2018 the Arizona Department of Environmental Quality permitted recycled water for direct potable reuse, which is defined as “the treatment and distribution of water without an environmental buffer.” (By contrast, indirect potable reuse means using “an environmental buffer, such as a lake, river, or a groundwater aquifer, before the water is treated at a drinking water treatment plant,” according to the EPA.)

Eighteen months later, in September of 2019, Scottsdale’s Water Campus was issued the state’s first permit for direct potable reuse. However, for now, Scottsdale is choosing to focus on replenishing its outdoor water supplies, perhaps a more palatable recycling goal for local residents.