Is Oro Valley Growing Too Expensive For Retirees?

One "study" says Oro Valley is getting to expensive
This is the conclusion of a study by gobankingrates.com. The study, published in September, ranks Oro Valley as 22 out of 30 nationwide locations that are getting too expensive for retirees.

Oro Valley’s senior population is approximately 30% according to census.gov (US Census Bureau). We are not just a retirement community; but people have traditionally moved here to do just that.


Reason 1: High Cost of Housing

The study uses median housing list price as a gauge of housing cost.

Gauging the cost of houses using that measure can lead to erroneous conclusions since a "median" is not an average. It is the middle number in a bunch of numbers.

We think that the average price per square foot of living space is a better measure. So, LOVE undertook our own study using data provided by Long Realty.

LOVE calculated the average asking price per square foot. We compared Oro Valley to other local retirement communities. We found that Oro Valley is near the top of the pack, but inline with Saddlebrook, which is a retirement community. Take a look at our infographic (panel left).

Reason 2: High cost of  living
We posted about Oro Valley's high local taxation last week, referencing a Kiplinger report that listed Oro Valley as a "high local tax town".

In that posting, we identified heavy taxation of water, a fact not considered by Kiplinger, as an added high tax factor. We also noted in that posting the relatively high property valuations assigned by the Pima County Assessor to Oro Valley properties, values that enable them to collect proportionately more property tax dollars from Oro Valley  property owners than from other communities.

Other than taxation and the cost of housing, the cost of living in Oro Valley is comparable to other local communities
The cost of living in Oro Valley  is also in line with the national average (panel right).

Our conclusion
Oro Valley's high cost of housing and high local taxes not only make Oro Valley expensive for retirees, but also make Oro Valley expensive for everyone else.
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You can do your own research on cost of living by clicking here, customizing it to your income and preferred locations.

About the  GOBankingRates study: They analyzed 50 cities with large senior populations (i.e., 25% or more of the population aged 65 or older). 

Kiplinger: Oro Valley No 6 In Highest Local Taxes In Arizona

High local taxes
Oro Valley local taxes are higher than those of most Arizona cities and towns, according to a study by Kiplinger, a personal finance advisory company. The study, published in September, ranked the 30 largest cities and towns based on the estimated local tax burden.

Marana tops list....but Oro Valley isn't far behind
Marana was the town with the most local taxes. It was followed by the City of Tucson.  Casa Grande, Apache Junction and Maricopa had more taxes than Oro Valley, but not by much.

Oro Valley's High sales tax
Oro Valley's high local taxes are driven by several factors. One is a high sales tax. We've documented this in a recent prior post.

Tucson and Oro Valley lead the Southern Arizona pack when it comes to sales tax. Oro Valley's half cent sales tax golf levy is indeed unique. It's the only one in Arizona.

Oro Valley's high utility tax 
The Oro Valley utility tax didn't exist until 2007, when a 2% tax was enacted. It was enacted during the recession to avoid cuts in town staffing.  It got doubled to 4% in 2011 to avoid having to reduce the police budget, a reduction that would have been in line with other town staff reductions at that time.

The original 2% utility tax was supposed to have been rescinded two years after its inception in 2007.  That never happened. The 2 percentage point increase imposed in 2011 was supposed to have "gone away" when the economy improved. The economy has improved substantially. Yet, the doubled utility tax remains today.

Want to learn more? Read our deceased colleague John Musolf's post:  "Perpetual Life Of The Utility Tax."

Oro Valley’s high water cost
LOVE has previously reported on the high cost of Oro Valley’s water in our posting: "Taxes, Add-On Fees, and an Inverted Rate Schedule Make Oro Valley Water Expensive.” Fees and tax levies add 41% to the cost of water. Water rates have gone up since that post; and with that increase in rates, so have the add on fees. Oro Valley's high water cost was not considered in the Kiplinger survey.

Oro Valley's higher than average county property values per square foot
Oro Valley also has a leadership role in property values. These values are the basis for the property taxes we pay. LOVE has also documented that Oro Valley's property values are higher per square foot than the rest of the county. Our 2015 analysis revealed that Oro Valley's population was 4% of Pima County but its assessed property values were 9% of total county property values. The result: Oro Valley residents pay more property taxes per square foot than other areas. Oro Valley's higher property taxes per square foot was not considered in the Kiplinger survey.

Up Next: Oro Valley Is Growing Too Expensive for Retirees
Arizona has always been a destination for retirees. Oro Valley has been the beneficiary. This fact accounts for why Oro Valley's median resident age is almost 50 years, while the national median age is 38.  Next monday, learn how things are changing.
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