AZ: As home prices go up - Rising home prices are good for sellers, but they raise important policy questions
Tucson, AZ - Significant cause for concern exists in recent reports that home prices in Tucson are increasing at a faster rate than incomes. While higher prices are good for home sellers, the trend means more and more low-income and middle-income families are being priced out of the housing market.
Indeed, the median home price in Tucson is now $135,000. Using the traditional rule-of-thumb for home buying, that home requires an annual income of about $45,000. That, however, is about $8,000 more than the median household income. Thus, somebody earning a median income in Tucson cannot afford to buy a median-priced home.
As a story in Sunday's Star points out, home ownership is important for several reasons: Homeowners tend to be more involved in their community and have a built-in incentive to maintain their homes. What's more, homeownership is a major way people improve their lives, and, of course, for many people, their home is their single greatest financial asset.
Consequently, while higher prices may benefit sellers, they may not provide the same benefit to the community as a whole.
This trend toward higher home prices takes on even more significance as one considers efforts to protect and conserve significant areas of land. The momentum appears to be reviving behind the county's Sonoran Desert Conservation Plan, and whether one is a supporter or critic of the plan, it must be acknowledged that setting aside some land for conservation is almost certain to raise the prices of the remaining land, which in turn will raise housing prices.
This doesn't mean that significant steps cannot be taken to mitigate the plan's effects. One obvious solution is to increase housing densities in some areas of the city.
Even so, as the community moves ahead with considering the Sonoran Desert Conservation Plan, as well as a variety of other growth-related issues, it is clear the effect on housing prices must be fully considered and solutions found.
Otherwise, more and more Tucson households will be priced out of their dream of homeownership - and out of the behavior that tends to increase connections to the community. That benefits no one.
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