Housing Cost Burden In Southern Arizona 2018

Author(s):
Katelyn Chamarro, Research Economist
Published:
05-08-2020

In 2018, the percentage of housing cost-burdened households varied widely among Southern Arizona communities, ranging from a low of 13.2% to a high of 48.0%. This article provides an in-depth look at how 38 of the largest cities, towns, and census designated places (CDP) within Southern Arizona fare in the percentage of households that are housing cost-burdened. Due to the importance of mining in Greenlee County, we also include three nearby communities in New Mexico. Hereafter, when discussing multiple cities, towns, or census designated places, the general term communities will be used. Note that, in some instances, we do not present data because the estimates were not sufficiently precise for that community.

Housing cost burden is an important measure of a household’s well-being. Cost-burdened households are more likely to struggle to pay for basic needs such as healthcare, childcare, transportation, and even food. A household is considered to have a housing cost burden when they pay more than 30% of their income in household expenditures such as: rent or a mortgage, taxes, and utilities. In 2018, the Corona de Tucson CDP posted the lowest percentage of households that were housing cost-burdened at 13.2%. The towns of Hurley and Thatcher had low rates as well at 18.5% and 20.4%, respectively. The Corona de Tucson CDP’s residents fared significantly better than the nation and state of Arizona, which posted rates of 32.6% and 31.5%, respectively. Conversely, the city of South Tucson posted the highest percentage of cost-burdened households with a rate of 48.0%, 16.5 percentage points higher than the state and more than three times Corona de Tucson’s rate. Figure 1 examines the percentage of housing cost-burdened households in the communities.

Figure 1: Percent of Housing Cost-Burdened Households (2018)

In 2018, renters fared significantly worse than homeowners, with 15 of the 41 communities posting housing cost-burden rates for renters in excess of 50.0%. On the other hand, 21.7% of homeowners, on average, within the 41 communities were housing cost-burdened. The Corona de Tucson CDP posted the least number of homeowners that were housing cost-burdened at 12.2%, while the city of Somerton had the most at 35.3%. The U.S., state of Arizona, and city of Tucson all had similar housing cost-burden rates for homeowners in the 22.4-24.0% range. For renters, there was slightly more variation between the U.S., state of Arizona, and city of Tucson with respective rates of 50.2%, 48.5%, and 54.6%. Renters in the city of Benson fared the worst among all communities, with a housing cost-burden rate of 70.4%. In contrast, the town of Clifton posted the lowest percentage of renters that were housing cost-burdened at 11.7%.

Homeowners can be broken down into those that have a mortgage and those that do not. Homeowners without a mortgage tend to be significantly less cost-burdened than homeowners with a mortgage. For instance, homeowners without a mortgage that are housing cost-burdened pay more than 30% of their income in homeowner costs such as: taxes, insurance, and utilities. In the city of Tucson, 30.2% of homeowners with a mortgage were housing cost-burdened, while that percentage dropped to 12.7% for homeowners without a mortgage in 2018. Figure 2 illustrates housing cost burden by tenure.

Figure 2: Percent of Housing Cost-Burdened Households by Tenure (2018)

The age groups of 25 to 34 years and 35 to 64 years had similar housing cost-burden percentages for the U.S. and state of Arizona in 2018, but varied greatly among the communities. For example, the city of Somerton posted a rate of 31.6% for ages 25 to 34, but a rate of 37.8% for ages 35 to 64, a difference of 6.2 percentage points. On the other hand, the Catalina Foothills CDP had a rate of 29.8% for householders age 25 to 34, but only 19.0% of householders age 35 to 64 were housing cost-burdened. This variation was less evident in the 65 and over age group. There were some cases, such as the cities of San Luis and Somerton, where the rate was less for householders age 65 and over than for the other age groups. However, when comparing age groups 35 to 64 and 65 and over, the rate of housing cost burden was higher for those 65 and over for 23 of the 41 communities. Figure 3 displays percentage of housing cost-burdened households by age for all 41 communities.   

Figure 3: Percent of Housing Cost-Burdened Households by Age (2018)

The percentage of households that are housing cost-burdened increases for those with lower incomes regardless if they own or rent. As one would expect, the rate of households considered housing cost-burdened decreases as income increases. For instance, in the city Tucson, of the 79,013 people that are housing cost-burdened, 49.8% earned less than $20,000 in 2018. This percentage decreased to 31.4% of households falling into the $20,000 to $34,999 income range, to 13.1% for those with income $35,000 to $49,999, to 4.6% for the income range $50,000 to $74,999, and to 1.1% for households with income greater than $75,000. When compared to the U.S., households in the city of Tucson are more likely to be considered housing cost-burdened at lower levels of income. For example, 49.8% of cost-burdened households in Tucson earned less than $20,000 compared to 35.7% nationally, more than a 10 percentage point difference. Nearly all of the communities explored in this article displayed similar results, with the lower income ranges posting a higher percentage of households that were housing cost-burdened relative to the U.S.

For the majority of the communities, renters were significantly more housing cost-burdened when compared to homeowners in the two lowest income ranges, but this switched for income ranges $35,000 and above. For example, in the Casas Adobes CDP, 20.3% of housing cost-burdened homeowner households fell into the $50,000 to $74,999 income range, but, for renters, this percentage was 6.5%. This was also the case for those with income greater than $75,000, with a housing cost-burden percentage of 6.4% for homeowners, but just 2.6% for renters. This can be observed in the state and national data as well, with renters in the highest income brackets being less housing cost-burdened than homeowners of the same income range. Figure 4a-c includes three graphs and illustrates housing cost burden by household income, broken down by tenure.

Figure 4a-c: Percent of Housing Cost-Burdened Households by Income 

Since 2000, there has been an uptick in the percentage of households that are housing cost- burdened. This can be seen in most of the communities explored in this article. When considering all households (homeowners and renters combined), only eight of the 41 communities had lower housing cost-burden rates in 2018 than in 2000. The remaining communities posted an average increase in the housing cost-burden rate of 5.3 percentage points. For homeowners, there were 16 communities that posted lower housing cost-burden rates in 2018 than in 2000. The Corona de Tucson CDP posted the largest decrease, with 23.4% in 2000 to 12.2% in 2018. As for renters, only the town of Marana, the city of Safford, and the Vail CDP posted decreases in the percentage of housing cost-burdened renters from 2000 to 2018. The COVID-19 pandemic is likely to result in a continuation of this upward housing cost-burden trend. Reduced incomes and job losses caused by the outbreak will put strain on household finances, causing more households to be housing cost-burdened in the future. Figure 5 includes three trend graphs that highlight how the percentage of housing cost-burdened households have changed over time for renters, homeowners, and renters and homeowners combined.

Figure 5a-c: Percent of Housing Cost-Burdened Households Trend (2018)

To learn more about the housing cost burden for the Arizona counties, metropolitan areas, states, and the U.S. please visit the Housing Cost Burden indicator. Detailed information on housing cost burden by trend, tenure, age, and income is available. The estimates provided in this article were obtained from the U.S. Census Bureau, American Community Survey (ACS). The ACS is a nationwide rolling sample survey that produces one-year and five-year estimates. All data provided in this report utilize five-year estimates. This article provides information on the 38 largest cities, towns, and census designated places (CDP) within the Southern Arizona counties of Cochise, Pima, Pinal, Greenlee, Graham, Santa Cruz, and Yuma. Additionally, three nearby communities in New Mexico are included.