Arizona Policy 'Favors Abstraction' Over Citizens

The Arizona press looks at the dead end that is the housing bubble. "Soaring home values make it possible for many in Arizona and nationally to feel as though they've got plenty saved up even as the national savings rate for 2005 was reported at negative 0.5 percent. That's the lowest level since 1933, in the heart of the Great Depression. Certainly, more consumers are seeing their homes as their savings, economists said. But placing too much 'saving' inside the home and pulling out cash as needs arise are unwise, Mike Sullivan, director of education for (a) credit-counseling agency said." "'At some point. you are going to want to retire and not have any house payment,' he said." "Wells Fargo senior economist Scott Anderson, said he is monitoring the savings rate closely. 'So long as the banks continue to lend to consumers, it's not going to be a problem,' he said. Easy credit is why consumers don't save in a traditional way, Sullivan said. 'You don't have to save anymore, and you don't have to delay purchases,' he said. 'Everybody just buys want they want and have stopped saving. Frankly, people are weak,' Sullivan said. 'If you can get something now, why wait?'" "Traffic keeps getting worse, and it's not just because of light-rail construction. It's impossible to pave our way out of the problem. What's interesting is the one industry that manages to avoid any role in a solution: house builders. And everybody from economists to cab drivers keeps saying, 'People will come here no matter what.' So they'll accept higher prices for decent transportation, no?" "But with the political clout of the housing industry, it will never happen. So policy continues to favor the abstraction of people who will come here over those who actually live here. Foreshadowing: A parcel in Phoenix's Desert Ridge sold for $1 million an acre. Will that be seen as a baseline for the future or an artifact from just before the bubble burst?" "Buckeye issued a mere 77 building permits in 2000 for single-family homes. Compare that with this year's anticipated 9,600. As metro Phoenix has sprawled over the years, retail has followed rooftops. Major employment centers, however, haven't made the jump for the most part, RL Brown said." "That creates a situation where workers must commute increasing distances for employment. The large swaths of available land in the southwest Valley and in Pinal County are the drive behind such robust growth, said Jay Butler, at Arizona State University. 'This is the big growth area,' Butler said. 'They have room for development.' What could soften the growth? Three bucks for a gallon of gas, Butler said." "Gilbert Town officials brushed aside concerns a 40-percent decline last year in building permit applications will negatively impact the town's economy. System development fees in Gilbert average $13,400 per home. Tony Hyland, a business owner in Gilbert and former president of the Gilbert Chamber of Commerce, cautions placing too much emphasis on revenue from retail sales." "'Gilbert has been living of the fat off the land over the last ten years due to explosive residential growth,' he said. 'Sales tax is controlled by the economy. Any community that relies on sales tax revenues is making a big mistake. The economy is fluctuating. I don't think the town anticipated a $26 million loss in revenues from residential system development fees in 2005,' Hyland said." "Mr. Hyland said the drop in residential building permits is a sign people are looking elsewhere to move and build homes. 'My gut feeling is people are looking for less expensive homes and less crowded communities to move into,' he said. Gilbert Director of Economic Development Greg Tilque said despite home prices increasing for homes in Gilbert, the town is still growing. 'Keep in mind, we still have 3,000 homes being built,' he said." "Gilbert Mayor Steve Berman said Gilbert's retail sales tax revenues will make up for the decline in development impact fees. He acknowledged Gilbert's housing market is slowing down. 'There's not a lot anybody can do about it," he said. "We are shifting our focus from residential to retail. It's one of those things. Sooner or later we are going to run out of room. All this is going to do is slow the train down long enough to count the cars.'"