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Homeownership eludes almost half the population here as the cost of houses skyrockets and salaries stagnate.

If homeownership is the American dream, half of Tucson is sleep deprived.

Fifty-one percent of Tucson households own their own homes during the most recent census in 1990. That was way below the national average of 65 percent.

And with home prices here spiking up more than 20 percent over the past two years while wages have stayed flat, chances are the percentage of homeowners is shrinking.

For tens of thousands, the term “affordable housing’ has become an oxymoron when it applies to buying a home in Tucson.

About 70 percent of the homes sold last year were out of reach of half the households living in the Tucson area.

For low- to moderate-income buyers, the name of the house-hunting game is compromise.

Take Bill Speer, for instance.

When Speer, a 27-year-old receiving clerk at the Osco Drug Store in El Con Mall, started looking for a home last year, he wanted a traditional single-family detached house.

However, Speer, who said he earns “nearly’ $7 an hour, could qualify for only a $40,000 mortgage.

With the average price of a single-family home in Tucson topping $115,000 last year, the houses he could afford were too tiny, in need of major repairs or sitting in decaying neighborhoods.

Speer was left with two options: a townhouse or a condo.

After a month’s search, Speer recently made an offer on a $37,000 townhouse on the Northeast Side.

But he has backed out of the deal because the owner wanted Speer to pay for half the repairs to the water-damaged bathroom.

“It’s a nagging situation,’ Speer said of his search. “Anything nice goes right away. And once you find one, it falls through.’

Speer’s dilemma is familiar to nearly half of Tucson’s households.

The median-priced home – where half cost more and half less – climbed to $90,700 in Pima County last year.

Meanwhile the median household income in the county was $25,400 in the 1990 census. And economists say any wage gains since then have been lucky to match inflation.

With interest rates now at about 8 3/4 percent, a household earning $25,000 a year generally can afford a $65,000 mortgage.

And as first-time buyers soon learn, houses in that range are few.

Of the 9,023 resale homes sold in Pima County last year, only 2,620 cost less than $70,000, according to the Tucson Association of Realtors Multiple Listing Service.

Those kinds of figures are why Tucson generally ranks in the bottom third in the country in housing affordability by the National Association of Home Builders.

When Meg Sax, a Tucson Realty & Trust Co. agent, started targeting first-time buyers six years ago, entry-level homes ranged from $40,000 to $60,000.

Now, $60,000 is the bottom end, Sax said. “You can find some bungalows under that, but if you want more than 1,200 square feet, you’re looking at above $60,000.’

Buyers also have a limited choice of neighborhoods.

Just about anything north of the Rillito is out. Nearly all the resale homes under $60,000 are in the central city or on the South Side, Sax said.

The new home market offers an even smaller selection.

Of the 160 active subdivisions in the Tucson area, fewer than a dozen have prices starting at less than six figures, said R. Mark Gragg, land specialist with Grubb & Ellis Co.

Builders say skyrocketing costs for labor, materials and especially land make it difficult if not impossible to build homes that cost less than $100,000.

So most first-time buyers have one choice: a resale.

Bill Nay and Patrice Peterson found a resale single-family home in the $60,000 range but their selection was limited.

The couple started out looking for a three-bedroom, two-bath home, but that would have meant prices in the $80,000 range.

After looking at more than 30 houses, the newly married couple bought a 975-square-foot, two-bedroom house near West Ina and North Thornydale roads a year ago for $67,000.

“We had to compromise. We wanted something we could be comfortable with and not bankrupt us,’ said Nay, a maintenance technician at Pima Community College.

Their mortgage payment of $500 a month is just $20 more than the rent they paid for a one-bedroom apartment.

Although it “wasn’t our dream home, it’s totally exciting to be a homeowner,’ said Peterson, a receptionist in a real-estate office who moved here with Nay 18 months ago from Maine.

“We never could have bought one back there,’ Peterson said. The cheapest homes in New England start at $100,000, she said.

Turning more folks like Peterson and Nay from renters into owners is one of the biggest challenges facing economic developers here.

The percentage of homeowners in the city of Tucson dipped from 60 percent to 51 percent during the 1980s while it stabilized at about 65 percent across the country.

The reason: The city hasn’t created enough high-wage jobs where salaries have stayed ahead of inflation, said David Taylor, a planner with the city of Tucson.

“We traded a lot of high, value-added (mining and manufacturing) jobs for a bunch of phone bank jobs,’ he said.

During the 1980s, the number of renters increased four times faster than the number of homeowners.

With tourism growing into the city’s major industry, “Tucson has become more of a service-industry town,’ noted Saul Tobin, a semiretired home builder. “The average income in Tucson has not escalated but home prices have.’

Tobin cited the example of Desert Steppes, a subdivision near East Broadway and Camino Seco that his company developed in the mid-1970s.

A three-bedroom, 1,300-square-foot home there cost $16,900 when it was built, Tobin recalled.

Today, those houses fetch between $80,000 and $100,000 on the resale market. That’s at least a 370 percent increase in 20 years.

Although wages have climbed in the same period, the percentage increase is nowhere near as great.

For example, the minimum wage was $2.10 an hour in 1975. Today, it’s $4.35 an hour, an increase of 107 percent.

The “real question’ in expanding the pool of homeowners “is whether we can create enough 21st century jobs for our 21st century children,’ Taylor said.

And the best way to do that is through “competitive pressure,’ said Robert Gonzales, president of the Greater Tucson Economic Council.

GTEC is focusing on raising the average wage rates by trying to recruit more companies here who will force salaries up by competing for the labor pool, Gonzales said.

However, Tucson will probably always be a low-wage town, relative to other areas, said Marshall J. Vest, an economic forecaster with the University of Arizona.

Tucson’s location as a gateway city for legal and illegal immigrants flocking to the United States from Mexico and Central America tends to depress wages, Vest said.

The immigrants form a large labor pool “willing to work for low wages because they are much better than they’re used to earning in Mexico. And that puts downward pressure on the entire spectrum of wages,’ Vest said.

And that’s bad news for Tucsonans who want to own a home but can’t quite afford one.

Because they are waiting, said Sax, “either to save up more for a down payment or for their salaries to increase.’

Charter Construction is filling void


Citizen Business Writer

Of the 160-odd subdivisions under construction in the Tucson area, Westview Park is near the bottom of the list – pricewise, that is.

In a city where new home prices average more than $120,000 and fewer than a dozen subdivisions offer homes for less than $100,000, the South Side development has single-family detached houses starting at $59,500.

The subdivision, platted for 107 homes, is next to Gallegos Elementary School, at South Cherry Avenue and East Wyoming Street.

Charter Construction Co., the developer and builder, is filling a niche other companies have ignored during the recent housing boom, said President Steve Macholtz.

“There’s a pent-up demand for this kind of product,’ Macholtz said. His company already has orders for nine homes and the first model is still under construction.

No one will mistake Westview Park for Tucson Country Club Estates or any of the tony enclaves in the Catalina Foothills.

Lot sizes start at 4,500 square feet and houses range from 895 to 1,711 square feet.

But the frame-and-stucco homes include vaulted ceilings, enclosed garages and energy-saving features such as double-glazed windows. Charter has 15 floor plans, including one designed for people in wheelchairs.

Profit margins on individual homes will be paper-thin, Macholtz said.

But the housing density on the the 16.5 acre site – from six to seven homes per acre – gives Charter the volume it needs to make the project work, he said.

Charter’s typical customer is a first-time home buyer who currently rents in the neighborhood, said Kathy Seiler, a Realty Executives agent representing the construction company.

Most are financing the purchases with FHA-backed loans, she said. And mortgage payments, which will average between $500 and $600 a month, are in the same range as buyers’ rents, Seiler said.

Macholtz said his project is perhaps the first new subdivision in the area in a decade. And neighbors are thrilled to see the construction, Seiler said.

“Everybody is pretty much happy we’re here,’ she said. “They’re glad to see something new coming in that will raise values in the area.’

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