A landmark assessment of infrastructure needs in Arizona was produced by the L. William Seidman Research Institute in May 2008 for the Arizona Investment Council (AIC): "Infrastructure Needs and Funding Alternatives for Arizona: 2008-2032", that addressed infrastructure needs in four categories: energy, telecommunications, transportation, and water and wastewater. The information from the AIC report is a major input to the report that follows. Other types of infrastructure — most notably education, health care, and public safety — also are analyzed here to provide a more complete picture of infrastructure needs in Arizona. The goals of this report are to place Arizona’s infrastructure needs into national and historical contexts, to identify the changing conditions in infrastructure provision that make building Arizona’s infrastructure in the future a more problematic proposition than in the past, and to provide projections of the possible costs of providing infrastructure in Arizona over the next quarter century.

The condition of Arizona’s infrastructure has a direct impact on economic productivity and quality of life. As economic competition expands domestically and globally, and as the knowledge economy evolves, the importance of a strong infrastructure increases. Education, in particular, is of growing importance. Arizona’s infrastructure challenges will require commitment and creativity to meet the needs and potential of 10 million people and to ensure a positive future for the state.

The age of housing in the Phoenix metropolitan area reflects the mostly steady outward spread of development. Large differences exist across the area in other housing measures. Many of these differences are closely related to geographic variations in household income and in the type of housing. As in the rest of the country, housing affordability in the Phoenix metropolitan area fell substantially in the 1970s. During the 1980s, the change in affordability varied by situation. Affordability rose for the median-income household, especially for homeownership. For those at the low end of the income spectrum, affordability of rental units improved slightly, but affordability of owned units worsened. Data for the 1990s are limited; the affordability of owned units rose for the median-income household, which could afford the median-priced home in 1998. An inadequate supply of very low-cost housing existed in the Phoenix metropolitan area in 1990. Even if low-income households were perfectly matched to low-income housing that they could afford, a little less than 3 percent of all households (about 23,000) could not have found affordable housing. The inadequacy expanded in the 1980s. The percentage of households reporting an unaffordable housing payment was much greater. Considering only low-income households who spent more than 30 percent of their income on housing, about 21 percent of all households had a housing problem related to affordability.

Arizona’s total value of international exports as a share of gross product was 33rd highest among the 50 states and District of Columbia in 2012. Arizona ranked 36th for manufactured goods. In 1997, Arizona had ranked eighth overall and ninth for manufactured goods. The state’s large relative decline in export share can be traced to its sizable relative decrease in its manufacturing sector. In particular, the electronics manufacturing subsector’s share of total GDP has dropped considerably.