Some national builders are taking a “wait-and-see” approach to new construction in Tucson as they monitor how political policy will impact the price of material and labor.
The building break is happening as the city stays eager to find a way to get more infill home projects going to meet demand and the average new home price in Tucson has crept above $500,000.
In January, the average new home price here was $503,375, surpassing the half-million mark for only the second time in Tucson market history. The average price rose to $513,062 in May of 2023, then slowly settled back down as the market stabilized and more new homes were developed.
Meanwhile, permits for new homes here dropped by nearly 43% in January, compared to January 2024.
“Historically, uncertainty does not play well with consumers, producers or suppliers,” said local housing analyst Jim Daniel, with R.L. Brown Reports. “The strong market for new homes in Tucson may continue and the forecast for new housing could be enhanced . . . but we really have no choice but to adopt a wait-and-see approach.”
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Because most national homebuilders are interested in large land parcels to build multiple homes, the city of Tucson is trying to implement a new tool to encourage smaller builders to create new housing on vacant lots or empty parking lots in urban areas.
The city’s Housing Needs Assessment Study estimates Tucson will need 35,000 more homes by 2035 to meet population demand.
Big parking lots like this one at Park Place mall is one of the locations in Tucson where city officials hope to attract infill housing projects.
The city is asking for the public’s feedback on its Community Corridors Tool, a proposed plan to update zoning and transform underutilized spaces along major streets into livable communities.
Three “opportunity sites” highlighted by the city proposal include:
A 4-acre lot on East 22nd Street and South Country Club Road that could be developed into new retail and townhomes with one- or two-car garages for first-time homebuyers.
- A 7-acre site near East Broadway and South Rosemont Boulevard that could have a four-story mixed-use project with retail and apartments, then smaller housing to the south of the lot as the property approaches the existing neighborhood.
- Park Place, 5870 E. Broadway, specifically the vacant parking lot on the southeast side of the mall, could have a three-story retail and apartment building with additional townhomes to the south, approaching the neighborhood, or a 4- to 5-story apartment structure with ground floor retail that surrounds a parking structure.
- Some Tucson residents have shared concerns about the city’s infill push. Those include:
- The plan does not require neighborhood notifications.
The city says undeveloped lots like this one along East Broadway and South Rosemont Boulevard are prime locations for infill housing, but there’s been a drop in building permits in Tucson as national home builders wait to see the effects of recent political actions on the cost of material and labor.
- Increased burden on emergency services, water and sewer.
- Taller buildings that affect noise, solar installations and mountain views.
- No requirement of architectural review.
- Inadequate public outreach.
The Planning Commission will host a public hearing on the Community Corridors Tool at 6 p.m. Wednesday, Feb. 26 in council chambers, 255 W. Alameda St. and via Zoom. Visit corridors.tucsonaz.gov for a link to attend the meeting virtually, to read the report or to view a video presentation.
It is the final public meeting scheduled before the plan goes to the city council for a vote. A date and time for that meeting has not yet been announced.
Contact reporter Gabriela Rico at grico@tucson.com
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