By Matthew Holloway | AZ Free News
Arizona’s affordable housing shortage is primarily the result of years of underbuilding after the Great Recession, not the rise of short-term rental (STR) platforms like Airbnb, according to a new report from the Common Sense Institute.
The report, titled “Home Prices, the Great Recession, and the Sharing Economy: Evidence from Arizona and Airbnb,” found that Arizona homebuilders sharply reduced construction following the 2008 housing crash and never returned to pre-recession levels, even as population growth resumed. Permit activity in Arizona fell from nearly 90,000 annual authorizations in 2005 to just 12,600 in 2010. By 2019, the state was still authorizing only about 45,000 new housing units per year, roughly half its pre-recession pace.
According to CSI, Arizona built roughly 38,000 fewer housing units per year between 2008 and 2023 than would have been needed to keep pace with long-term historical trends. Researchers concluded that this persistent gap in construction created a housing deficit that continues to drive up prices across the state.
While Airbnb and similar platforms have drawn criticism for reducing housing supply, the report found that short-term rentals account for only a small share of Arizona’s housing stock and are concentrated in tourism-heavy markets rather than spread evenly across the state. According to the Arizona Association of Realtors, CSI found “no observable statistical relationship” between the growth of short-term rentals and rising home prices across most Arizona communities.
