Wednesday, January 11, 2006
The lure of the outskirts
Cheaper land, lower fees and taxes are pushing more Tucsonans across county lines for their new homes
DAVID PITTMAN
Tucson Citizen
Shane Van Deren and his wife, Meridee, can't afford a new house in Tucson, so they are buying their first home some 40 miles east, on the outskirts of Benson.
"Homes around Tucson are just a little too expensive," Van Deren, 23, said. "We are so happy to be able to get into a good-sized home that is priced well on an acre of land, rather than a cookie-cutter house in a tight subdivision."
The Van Derens are part of a growing trend.
Cheaper land, a rural ambiance and easy interstate access to Tucson jobs are creating new bedroom communities outside Pima County.
The new hot spots are Benson in Cochise County and Red Rock in Pinal County.
But the move outside Pima County for people who work in Tucson means lost revenue for the area in property, sales taxes and development fees.
"These people will live outside Pima County, but they will drive to Tucson to work," said Tucson housing expert John Strobeck. "Tax revenue from these developments will go to Cochise and Pinal counties, but the costs for roads and services will be borne in Pima County."
More potential homeowners such as the Van Derens, pushed out of a market that averages about $260,000 for a new house, are willing to spend more time on the road in order to buy a bigger home on more land than they could afford in Pima County.
Developers are responding to the demand.
Premier Homes recently opened the first production subdivision in Benson, and more will soon follow.
"There are a substantial number of builders in Benson right now, and most of them will start building in 2006," said Will White, senior land broker at the Tucson office of Arizona Land Advisors.
Strobeck, publisher of the Tucson Housing Market Letter and owner of Bright Future Business Consulting, predicted about 2,000 residential housing permits will be issued to build homes in and around Benson this year. While huge for Benson, by comparison, more than 11,000 building permits were issued in metro Tucson last year.
Other developments are under way in Cochise County.
"Meritage Homes has a huge chunk of land it will build on on the west side of Highway 90 going toward Sierra Vista, and a number of builders are lining up to build at Whetstone Ranch, a master-planned community where land is being prepared for construction," Strobeck said.
Across Pima County to the west, Pulte Homes plans to begin selling houses at its Red Rock Village master-planned community this spring. Construction is expected to start this summer, and Pulte said nearly 4,000 homes will be built there over the next decade.
Why are housing developments moving so far outside Tucson's urban core? Because land prices and government fees and taxes imposed on builders are considerably lower, meaning homes can be built for less.
The single largest expenditure for home builders and developers is the cost of land. And land in Benson and Red Rock sells for considerably less than similar land in Pima County.
In neighboring counties, raw land (with no utilities or government entitlements) near Interstate 10 is being sold for about $15,000 per acre, three times what it was drawing 1 1/2 years ago. Similar land in Pima County is going for about $50,000 per acre.
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