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    Home » Local News » BEX Leading Market Series Panel Discusses Housing
    Local News

    BEX Leading Market Series Panel Discusses Housing

    BEX StaffBy BEX StaffMarch 14, 2025No Comments6 Mins Read
    Left to right: Moderator Nathan Sonoskey and panelists Shelby Duplessis, Benjamin Tate and Roger Theis. Credit: BEX Companies
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    By Roland Murphy

    The 2025 BEX Leading Market Series for March covered Housing Projects on the Horizon and was presented March 11 at SkySong in Scottsdale.

    Rather than simply rattling off lists of developments in various states of approval and construction, panelists took a deeper dive, addressing questions focused on the current state of the housing development market in Arizona.

    The panel was comprised of:

    • Nathan Sonoskey, CEO, Fast Permits (Moderator);
    • Benjamin L. Tate, Land Use Zoning Attorney, Withey, Morris, Baugh;
    • Roger Theis, VP of Development, Harvard Investments, and
    • Shelby Duplessis, Founder & Managing Partner at Diversified Futures.

    Sonoskey gave the panelists the opportunity to introduce themselves and briefly comment on their current activities. Duplessis and Theis both discussed long-term development plans in process for their respective clients and companies, including a vision for 17,000 West Valley units, various single-family and Build-to-Rent prospects on the horizon.

    Tate said his biggest challenges and cases at the moment tend to center around infrastructure and impact fees. In addition to various cities and jurisdictions recently increasing or planning to increase fees as part of their regular review cycle, he and his firm have been busy evaluating, and occasionally challenging, what portions of infrastructure costs get assessed to developers.

    In 2024, the U.S. Supreme Court ruled cities cannot impose fees without establishing a relation between a development and its proportional impact on infrastructure and costs. Tate explained it has been an ongoing effort to correctly determine what that proportionality is and to protect clients from having to pay too great a percentage of costs, particularly for infrastructure projects that were planned before a given development was even envisioned.

    Universal Challenges

    Project approval timelines have expanded, particularly since the pandemic, and Sonoskey asked panelists to discuss the specific challenges they have faced in dealing with various jurisdictions.

    Tate said it has become more difficult to set meetings and arrange direct, in-person meetings with municipal staff since COVID and stressed the need to find a contact at the city that will “quarterback” the process to streamline the necessary components.

    Duplessis agreed, saying finding a champion in the municipal process is essential. She also noted the lack of consistency in project reviews and contributions between various departments, saying timelines could be shortened and backlogs streamlined if there were better consistency and communication between departments and staff members, as it would reduce contradictory findings and improve collaboration. She stressed the need for greater collaboration across the board and the need to manage expectations for all parties.

    How’s the Money?

    Sonoskey then turned to matters of capital and finance, asking panelists what changes they are seeing in project funding.

    Tate said markets have become more risk averse and less patient. He added a relatively new phenomenon has been several requests to address due diligence findings direct to lenders. Up until six months ago, Tate had never had that happen before, but has since processed three such requests.

    Theis said he has found private equity partners tend to be more patient than institutional lenders. He explained institutional partners tend to envision timelines of five-to-eight years, while private equity timelines can reach up to 20.

    Duplessis said there has definitely been a need for more frequent and detailed updates, which has added a benefit of more patience, in her experience. She said the better informed the parties are about statuses and processes, the less worry they tend to have when complications and delays arise.

    Also on the financial side of operations, Duplessis said new complications, such as tariffs and their possible impacts on materials prices, are leading to new levels of concern. She added Arizona is better positioned for the possibility of an economic downturn than it was in the time leading up to the Great Recession, in large part because the state has diversified its economic development focus away from being almost entirely housing-centric, and it has become much more widely disbursed across various sectors.

    Theis said one of the more significant issues he has seen recently is the massive jump in impact fees imposed on developers, adding it hurts deals significantly when fee costs double over their initial estimates and can even cause long-planned developments to no longer pencil.

    Some projects have had to shift intended uses. For example, Duplessis said some developments have pulled back on planned condominium platting and maintained multifamily designations, as they were unable to effectively absorb the difference in impact fees.

    Other concerns and impacts, both current and potential, addressed by the panelists included the possibility of renewed cost spikes spawned by tariffs and trade policy and the ongoing dramatic rise in power and other utility demand spurred by data centers/artificial intelligence and other consumption variables.

    Demand and Use Considerations

    When asked to discuss demand and how it is influenced by conditions, Theis said demand has been great, overall, but there is a need to align development plans with the current appetites of the submarkets being considered, adding his firm has been specifically looking at secondary and tertiary markets with plenty of pent-up demand for housing product.

    Duplessis said the fundamental development of housing following employment is still a primary consideration and pointed to the growth of lifestyle amenities as a significant contributor. When major employers and retail and entertainment providers come to an area, housing demand is certain to accelerate.

    New Opportunity Areas

    When asked to predict upcoming areas of growth, Duplessis said Arizona in general and metro Phoenix in particular are “growing into a whole new beast,” adding, “We need a lot more of everything.” She said adult care and retirement communities should expect continued growth, and the state needs to add appreciably to its affordable housing stock across all product types.

    Theis harkened back to earlier comments from the panel about diversification and cross-support among employment, lifestyle and housing development, saying placemaking boosts markets.

    Tate said ongoing legislative efforts, such as refinements to recent laws on office to residential conversion and zoning process reforms, could contribute greatly to development opportunities.

    All the panelists agreed that Build-to-Rent may see more difficulty in the short-term, since metro Phoenix was one of the first and remains one of the prolific markets in the sector. Tate said cities with a high volume of BTR projects are experiencing some fatigue with the product type. Duplessis advised giving cities time to adjust and digest, but added there is an entirely different demographic for BTR than the market originally predicted, and the sector both needs and will continue to grow.

    apartments/condos Benjamin L. Tate BEX Leading Market Series BTR build-to-rent capital markets development costs Diversified Futures Fast Permits Harvard Investments housing Housing Projects on the Horizon impact fees infrastructure costs Land Use LMS materials costs multifamily Nathan Sonoskey NIMBY product approvals project financing residential development Roger Theis SCOTUS Shelby Duplessis single-family tariffs trade policy U.S. Supreme Court Withey Morris Baugh zoning
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