As long as the Grand Canyon, Coconico National Forest, Meteor Crater, and Red Rock State Park remain major tourist destinations absolutely.
> Like all other American cities the planning code of Flagstaff virtually forbids construction of anything, so it's not as if they've tried to build on the margin and it didn't help.
Flagstaff and Coconico County changed their zoning code as part of the Flagstaff 2045 initiative [0].
Furthermore, much of the CDP land surrounding Flagstaff has been converted into housing - the Kachina Wetlands area, Flagstaff Ranch, Presidio Park, the area around Floxglenn Park, Pine Canyon, etc.
These are all recentish expansions (past 10 years) and there are further expansions that have been zoned by Coconico County.
Furthermore, within Flagstaff City, multi-unit housing is being developed now using the stick-frame format.
All these units are a significant expansion for a small regional town in the middle of nowhere (amazingly beautiful but nowhere nonetheless).
All these units are priced at the $400k and above range - which is unaffordable for service workers who tend to earn $14-20/hr and tend to commute significant distances.
-----------
Fundamentally, zoning has been simplified but the costs of construction (labor, financing, and of course land) incentivize high value/high margin real estate development.
One of my former sparring buddies is MD track (hence no more time to spar) for Real Estate/Construction financing at one of the bulge brackets, and in our conversations, much of the deal flow over the past few years has been flowing towards infra construction because of better margins and significant subsidization by state, local, and federal governments.
Commercial and Residential Real Estate just cannot compete with the margins that come with building a fab for Intel or TSMC, as wages, margins, and RoI is much higher.
Zoning can help to a certain extent in some highly sought after markets, but in much of America, financing for residential construction just cannot compete with infra financing.
[0] - https://flagstaff-regional-plan-2045-flagstaff.hub.arcgis.co...