By Philip Haldiman

Independent Newsmedia

It’s all about affordability when it comes to housing.

There was a time when families flocked to the suburbs --- places like Peoria and Chandler --- to raise a family in homes big enough to grow older comfortably.

Nothing has really changed since then, except now families are moving farther out, past the suburbs to the exurbs --- places like Buckeye and Florence.

Real estate analyst Jim Belfiore said the farther you go out, the more housing is bursting at the seams. Over the last 12 months, supply and demand are up 29 percent in the exurbs, while demand closer in is flat, down 3 percent, he said.

“The main reason is that in the core urban and suburban areas, prices have risen to a point where people can’t afford to have their American dream, so they are willing to hopscotch further out and drive in to work,” he said.

To better understand this growth, Independent Newsmedia requested building permits issued by a number of municipalities over the last five years, and generally found continued growth throughout the sprawling Valley and beyond, but more activity moving out from Maricopa County’s metropolitan core and into Pinal County.

The public records request included the following municipalities: Peoria, Scottsdale, Paradise Valley, Queen Creek, Apache Junction and Gold Canyon.

In 2017, Maricopa County’s population increased by nearly 73,650 people — a 1.7 percent increase, according to the Census Bureau.

The county’s population increased about 13 percent from 2010 to 2017.

Pinal County’s population increased about 14 percent during that period.

Of the municipalities covered in the records requests, none reflected this growth more than Peoria and communities in Pinal County.

Peoria saw a more than 50 percent increase in building permits from 2013 to 2018, with substantial growth in housing and commercial. Pinal County saw an 82 percent increase in building permits from 2013 to 2017, while the city of Scottsdale remained flat in building permit approvals with 2,785 in 2014 and 2,721 in 2018.

Mr. Belfiore said there is less affordable housing in cities like Scottsdale and Phoenix, where there are more building and development requirements.

He said now development is hot in places like Maricopa, San Tan Valley, Florence, Coolidge, Casa Grande and Buckeye.

“We will continue to see a burst in the exurbs,” Mr. Belfiore said.

Meanwhile, the West Valley matures.

Over the next 25 years, about 50 percent of the growth in Maricopa County will occur in the West Valley, according to Maricopa Association of Governments.

Liz Recchia, government affairs director for West Maricopa County Regional Association of Realtors, said the West Valley is transforming from a very large bedroom community for Phoenix to an employment center with residential, retail and amenities to serve the population, and the surrounding cities have been collaborating in terms of regional economic development to foster growth in employers, infrastructure, jobs, infill and housing.

She said all this is beginning to accommodate the pent up demand.

The West Valley business community and cities are working together to make the region a place someone can grow up, become educated, employed or start their own business to live, play and retire while having their children and grandchildren nearby, Ms. Recchia said.

“Builders are purchasing subdivisions that were platted pre-recession, and re-platting for current market product, building models quickly and forming interest lists several months before they break ground,” she said.

“I speak to brokerages frequently, and the most requested topic is projects in the West Valley. As soon as agents and brokers hear about a residential project going through approval, they inform their clients. Multiple offers on re-sale product is common.”

The power of Peoria

From 2013 to 2018, Peoria approved 7,735 single-family home permits. During a period of rapid growth, they increased from 845 in 2013 to 1,562 in 2016, an 85 percent increase.

Benjamin J. Katz, a Realtor with Lake Pleasant Real Estate, said the simple reason for such explosive growth has been a good economy.

A lot of people moved to the Phoenix metro area, unemployment has been extremely low and interest rates were at record lows from  2015 to 2017, he said.

“Millennials really started buying their first home, and builders took advantage of it,” Mr. Katz said.

Metro Phoenix has been growing at about 2 percent per year, which results in about 95,000 to 100,000 persons.

Mark Stapp, director of the Center for Real Estate Theory and Practice, said that equates to demand of about 27,000 to 30,000 new housing units, which is driven by cost of living and employment growth.

Peoria has evolved along with metro Phoenix but lagged slightly in recovery since the recession, he pointed out.

“Now Peoria has been one of the fastest-growing areas of the metro area. The northwest Valley had about 13 percent market share of new home permits last year. That market share is likely to stay about the same this year.”

Subsequent of this growth in Peoria, commercial followed residential.

Since 2013, the city approved 121 new commercial tenant permits --- buildings dedicated to one specific tenant, such as a QuikTrip or fast food restaurant. Approvals peaked last year with 42, about a 100 percent increase from 2017 and a 250 percent increase since 2013.

Peoria Economic Development Services Director Rick Buss said there are a variety of reasons for the increase, but some include a strong economy, the city’s focus on relationship development and customer service, and specifically introducing Peoria to the world, regionally, nationally and globally.

“The city has a specific strategy to significantly raise the profile of Peoria, and this is paying off and will continue to be successful,” he said. “Clearly, Peoria is a great place to locate and expand business. Our job is to promote this.”

A quiet boom emerging in Pinal County

Growth in parts of Pinal County, including the cities of Apache Junction, Gold Canyon and Queen Creek followed a similar trajectory.

Single-family permits went up more than 300 percent in Apache Junctions, from 33 in 2014 to 138 in 2018.

Gold Canyon had more than 400 building permits in 2018, a record for the community.

And in Queen Creek, single family housing permits nearly doubled in that time period with 689 in 2014 and 1,295 in 2018.

Local industry experts say the area is to a point where places like Apache Junction and Gold Canyon need a wider variety of housing.

Developers are building new single-family homes costing $200,000-400,000 and up. To the east and west of Apache Junction, homes are going for closer to $100,000.

Apache Junction Economic Development Director Janine Solley said having a diverse portfolio of housing types that meet the needs of a diverse workforce is important for Apache Junction.

“From an economic development perspective, employers need access to a local, reliable workforce within a reasonable commute shed,” Ms. Solley said. “The types and quality of jobs determine what an employee would consider a reasonable commute. And, the types and quality of housing stock options may dictate what neighborhood or area within that commute shed an employee will choose to live.”

Live-work-play buildings, which can include retail or other businesses and employment as well as housing have been popping up all over the Valley.

Designated Broker Liz Harris said this model could be a good fit for the area.

This type of mixed-use development is already allowed by Apache Junctions’s B-3 zoning, which is primarily found in and around the downtown-area.

It would be a brilliant move for the city, she said.

“It is a phenomenal concept, but it doesn’t always take off” she said. “If it’s marketed correctly, I think it’s very smart,”

Scottsdale’s sizzle appears dormant

Since 2014, the total amount of building permits issued in Scottsdale has remained mostly flat — floating above 2,500 from year to year — although the type of permit fluctuates.

Scottsdale Director of Development Services Michael Clack says the ebb and flow of building permits from year to year depends on what is in demand.

“Right now it’s at a slow curve upward — very shallow — almost to where we’re maintaining to past several years the number of permits that we’re issuing,” he said. “I know a lot of plans that come in we’re getting tenant improvement plans, which are in existing buildings, it’s not a new building.”

Mr. Clack points to the Scottsdale Fashion Square as an example property that’s rebuilding within its established footprint.

“They’ve been doing a lot of rebuilding, particularly on the inside, doing a lot of remodeling, interior floor plan and have different stores moving in and out. Those generate plan reviews and permits within the mall,” he said.

Overall, Mr. Clack believes --- while pointing out that he’s not an economist --- the number of building permits Scottsdale experiences is healthy.

“If you have a vacant piece of land, that represents a certain piece of value as far as property tax. When you begin to improve on land, you’ve increased its value, which increases its property tax,” he explained. “The city is getting a long-term benefit just with improvements on that land.”

Paradise Valley remains prominent

Paradise Valley is unique in that its land use is largely restricted to single-family homes on 1-acre lots and resorts.

Since 2014, nearly 350 single-family building permits have been pursued at the Paradise Valley Planning Department. In addition, more than 100 permits were issued for hotels in the same period.

Officials say these numbers illustrate a healthy local economy.

Deputy Town Manager Dawn Marie Buckland said that for more than a decade, demolition and rebuilds within Paradise Valley make up half their home building permits.

“The snapshot mirrors a trend we’re seeing in the metro Phoenix area, but for the rebuilds. Looking back since 2001, demolition and rebuilds consistently makes up about 50 percent of our new home building permits,” she said. “I am unaware of any other city in Arizona that sees that remarkable number of rebuilds. This is an extremely desirable location; I would expect that to continue.”

Deputy Town Manager Dawn Marie Buckland said the town thrives because of its resorts.

However, Ms. Buckland points to the quantity of single-family home permits as a real indicator for what the town’s residents think about Paradise Valley, noting the town consistently sees a steady stream of single-family residential home permits.

“This really reinforces that Paradise Valley is a very desirable community, and shows confidence in the Town Council, as well as the professional staff,” she said. “People are making investments; building new homes on vacant lots as well as tearing down existing homes and building new. Residents simultaneously value beautiful desert vistas and privacy, and civic and community engagement, and are afforded ample opportunities for both.”

Managing Editor Terrance Thornton, News Editors Melissa Rosequist and Richard Dyer contributed to this report.

Philip Haldiman can be reached at 623-876-3697 or phaldiman@newszap.com.