The following is the opinion and analysis of the writer:
Justin Nelson
Senator Ruben Gallego’s recently unveiled housing affordability plan, "The Path Home," is an ambitious attempt to tackle a crisis that has hit Arizona families particularly hard. However, as a project manager for a large general contracting firm with 16-plus years’ experience that has worked directly with HUD and navigated the intricate web of federal affordable housing requirements, I see a proposal that is fundamentally disconnected from the logistical and regulatory realities of the industry. While the Senator’s intentions are noble, several key pillars of this plan are built on a foundation of sand and would likely fail to meet basic HUD standards.
One of the most concerning aspects of the report is the suggestion to utilize federal land for residential use. As a steward of public land through my work with Backcountry Hunters & Anglers, I see this as a nonstarter. It leaves the door open to the privatization of public land by developers, when we already have established avenues for land swaps that effectively target parcels within urban areas where growth makes sense.
More importantly, from a HUD compliance standpoint, this plan ignores the Site and Neighborhood Standards. HUD requires that affordable housing sites have adequate access to "horizontal infrastructure” - water, sewer, and power—and be located in neighborhoods with accessible social and health facilities. Nearly all federal land is raw and remote. The cost of bringing these sites up to HUD’s minimum property standards would be astronomical, instantly stripping the "affordability" from the homes built there. Urban infill is a far more feasible solution that leverages existing infrastructure and meets federal suitability requirements.
The report’s approach to the construction workforce also misses the mark. The plan relies on "prevailing wages," but in Arizona’s current boom, market wages for skilled trades often exceed the federal Davis-Bacon minimums. The wages that are set by Davis Bacon are based on numerous factors such as project location, trade scope, and fringe benefits. The current construction market often exceeds the minimum hourly pay to remain competitive to a relatively small skilled labor pool. When federal mandates peg wages to an outdated floor, it can lead to contractors paying less than what a worker could make on a private commercial site. This creates a persistent worker shortage on federal projects, as the most seasoned pros follow the higher market rates.
Specific items in the report further complicate the job site:
• Item #15: The requirement to "create" a workforce is effectively unenforceable. You cannot conjure a skilled electrician or pipefitter out of thin air to meet a quota. This mandate will most likely lead to a dilution of the talent pool, placing underqualified workers on high-stakes project sites—a direct violation of the quality and safety standards I’ve seen HUD demand in the field.
• Item #16: This provision only works if projects move away from the "hard bid" delivery method. Hard bid only looks at a contractor's price to do the project and does not factor in essential items like experience on similar projects, constructability of the design, the use of skilled labor ILO temp labor, etc. Most federal work requires a hard bid, which forces a "race to the bottom" on price. This system naturally pushes out the more qualified, highly-skilled contractors who have higher overhead due to better training and safety programs.
For landlocked cities, the housing shortage isn't just about a lack of new builds; it's about the erosion of existing stock. "The Path Home" fails to address the impact of short-term rentals. When available housing is converted into vacation rentals, the supply for local families vanishes, and home values are artificially inflated. Any serious federal housing plan must give local municipalities the teeth to limit STRs in geographically constrained markets.
If we want to fix the American dream, we must focus on:
1. Prioritizing urban infill over the risky privatization of federal lands.
2. Modernizing wage requirements to reflect actual market conditions.
3. Regulating short-term rentals in supply-constrained markets.
We need a housing plan that works for all parties developing and constructing these homes and the people who need them, not just on a campaign flyer.
Follow these steps to easily submit a letter to the editor or guest opinion to the Arizona Daily Star.
