Tempe housing plan looks to generate millions for affordable housing

Posted at 7:41 PM, Mar 25, 2021
and last updated 2021-03-25 22:41:44-04

TEMPE, AZ — When Tempe Mayor Corey Woods took office in January 2020, he said the affordable housing crisis seemed to have gotten worse than when he vacated his city council seat in 2016.

“It's not just a Tempe issue. Frankly, it's a regional issue all over the place where we don't have enough affordable and attainable housing,” Woods said.

A 2017 inventory of Tempe housing showed it was short about 16,000 affordable units for the residents with the lowest incomes according to Housing and Revitalization manager LeVon Lamy. That’s when he said the city began its focus on housing the most vulnerable.

“We established the affiliate nonprofit to the Housing Authority. We started acquiring units to be permanently affordable rental housing,” Lamy said.

The city also began acquiring land to offer to developers.

“For some of these projects, we sold the land that had been acquired with federal funds for, just nominal (prices), in exchange for that longer-term affordable housing,” Lamy said.

Most of the money for any affordable housing program comes from federal sources so if cities need more—which they all do—they have to find a way to pay for it.

Woods said Arizona laws make that difficult task, even harder.

“The infrastructure is not currently set up, not just in Tempe, but frankly, throughout the state to encourage more affordable housing,” he said.

Several laws prevent cities from using common policies typically used to generate more affordable housing. Amongst those state prohibitions are rent control and inclusionary zoning which allows cities to make building permits contingent on developers including a certain number of affordable units.

“All of these very well-known tools that are being used in cities and state throughout the country, to generate the necessary revenue for affordable and attainable housing options,” Woods told ABC15. You're basically tying one arm behind my back.”

A few months into his tenure he and staff brainstormed ideas to create more funding.

“In about probably a two to three week period, we came up with the proposal that eventually became Hometown For All,” he said.

The Hometown For All initiative is designed to create a sustained source of funding to build units more quickly.

“The concept was finding two different revenue streams, one from existing city revenue, but the second one, which would all be new revenue,” Woods said.

One source is 50% of building permit fees go directly to the city-run non-profit Tempe Coalition for Affordable Housing.

The second source is a voluntary fund that developers are encouraged to donate a percentage of the value of their permitting fees.

“If you are building a multifamily residential complex, we would ask you to sit to give us 20%,” Woods said. “If you're building a commercial or kind of office product, we were asking for a voluntary 10% contribution.”

Since its inception in January 2021 Woods said the fund has taken in nearly $1 million.

He anticipates the amount will at least double by the end of the year.

“Somewhere between $2 to $4 million a year, all of which can then be used to further our affordable housing needs in Tempe,” Woods said.