By Roland Murphy for AZBEX
Goodyear as a maturing market? Check.
Explosive growth in the West Valley generally? Check.
Massive expansion in the Build-To-Rent market? Check.
A mad scramble to build enough traditional multifamily units to meet demand anywhere in Greater Phoenix? Check.
A plethora of oft- (some might say “over-”) reported trends are converging in Cotton Commons – a pair of associated residential projects proposed in Goodyear by SJ Acquisitions, in partnership with 29th Street Capital.
Following a September 15th recommendation for approval from the Goodyear Planning & Zoning Commission, the developers won approval from Goodyear City Council on September 27th to rezone two sites totaling roughly 40 acres at the SWC of Lower Buckeye Road and 173rd Avenue from single-family (R1-6) to multifamily (MF-12 and MF-24) so they can build a cojoined pair of residential projects: A 205-unit BTR community and a traditional apartment development of 400 units.
On the eastern 19.26-acre BTR side, planned amenities include a resort-style pool, dog park, fitness facility and open space. According to the development narrative, “Buildings are grouped to create intimate courtyards, with inviting landscaping to support healthy neighborhood interactions.” The single-story units will feature a mix of one-, two- and three-bedroom floorplans.
The western 20.97-acre traditional multifamily development will provide approximately 400-units in a one-, two- and three-bedroom mix. The three-story buildings will be enclosed in a gated community, and amenities will include a clubhouse, fitness center, two resort-style pools and open community space. Each unit will also have a private patio or balcony.
Cotton Commons is a relatively unique proposal. While both traditional apartment and Build-To-Rent communities are both going up as fast as developers can buy sites, secure approvals and find materials and labor, projects including both housing types are a comparative rarity.
As is often the case, a contingent of homeowners expressed opposition to the plan during the public review process. Nine households spoke at the P&Z Commission meeting, and two more submitted written statements. They expressed the standard worries about more traffic, higher crime, view obstruction, increased noise, short-term renters and drawing more homeless to the area.
In their analysis, however, City staff said, “This proposal presents a land use that will convert an underutilized site that is not appropriately entitled to meet demand to a high-quality development that offers two housing products that are much needed in this area to provide the diversity in housing necessary to support Goodyear’s employment, commercial, and entertainment land uses. With the pending investments made into the nearby Loop 303 extension, the proposal promotes the orderly growth and development of the area by adding residential densities appropriate to their context.”
For reference, the project narrative states the nearest traditional multifamily development is located approximately three miles from the development site, and the nearest single-family rental community is nearly four miles away. However, the location is less than half-a-mile from employment centers including Amazon, Huhtamaki and the Macy’s Distribution Center.
The staff analysis also noted the development will add much needed variety to housing types in the area and benefit both nearby residents and businesses.
Messages left for the developer seeking information on the design team, general contractor and expected timeline were not returned by press time.
Converging Trends
While Cotton Commons could be viewed as just another large residential project in a market teeming with them, a closer look shows the plan to be a convergence of multiple market and sociological factors currently impacting the Phoenix area.
Much has been made of the metro Phoenix’s leadership positions in both job growth and in-migration. The 2020 Census showed the West Valley adding 178,000 people over 10 years, with Goodyear growing more than 45% and hitting a population of 95,000, making it the largest city in the Southwest Valley.
The Arizona Republic reported in September the West Valley experienced a growth rate of 24%, compared to 16% for Maricopa County overall.
Metro Phoenix is also a launch point for the now nationwide trend of single-family rental/Build-To-Rent homes. According to information from Yardi and Colliers International, since the Phoenix area’s first specifically identified BTR property was delivered in 2015, there have been slightly more than 5,000 single-story, 1,500 two-/three-story and 775 condo-mapped rental units delivered. More than 1,800 of those BTR units have been delivered in 2021 according to Colliers’ data through the end of June.
Adding to the BTR excitement, the same data show another 1,850-plus units under construction with expected delivery before the end of the year.
Much has been made over the past three years about Metro Phoenix’s need to deliver 15,000 units per year through 2030 to meet demand. In 2020, according to information from ABI Multifamily, the area saw deliveries of approximately 8,800. The 2021 estimate from Colliers International shows projected delivery of 11,500, including both traditional and BTR developments.
Realistically, however, the established 15,000-unit/year need may be outdated. Given the Valley’s dynamic and sustained rate of growth, the real need could be as high as 17,000.
Occupancy rates in the Valley are hovering around 97%, which is as high as they can functionally go. Materials shortages (and associated price increases) combined with labor shortages have put a damper on the volume that can be built, regardless of governmental or industry incentivization.
While Cotton Commons and similarly ambitious developments are a welcome and essential contribution to the area’s inventory needs, experts are nearly universal in their assessment that things will continue to get worse before they get better.
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