City of Phoenix, AZ

11/12/2024 | Press release | Distributed by Public on 11/12/2024 17:55

City of Phoenix Makes Significant Strides in Affordable Housing and Housing Availability


​​ Today, the City of Phoenix Housing Department presented an extensive overview of Phoenix's housing efforts and initiatives aimed at serving our residents and addressing housing supply and affordable housing needs in our city.

For many years, the City of Phoenix has prioritized increasing the supply of housing for all income levels. These efforts span multiple City departments and have produced extremely successful policies, programs and initiatives. Phoenix is and will continue to be a leader in ensuring increased housing options for everyone who chooses to call the city home. Below is a summary of the primary accomplishments shared in the presentation to the Phoenix City Council:

Housing Department Overview

The Housing Department focuses on programs and services that support permanent, affordable housing in the City of Phoenix.

  • As the Public Housing Authority (PHA) for the city, the Housing Department operates more than 1,000 public housing units.
  • The Housing Department is responsible for administering more than 7,500 Housing Choice Vouchers allocated by the federal government.
  • The Housing Department also provides more than 3,900 units in apartment communities throughout the city, with more than 300 currently under construction.

Housing Phoenix Plan

In June 2020, Mayor and City Council approved the Housing Phoenix Plan (HPP), to create a stronger and more vibrant Phoenix through increased housing options for residents at all income levels and family sizes. To achieve this, the Plan set a goal of creating or preserving 50,000 housing units by 2030 through the implementation of the nine policy initiatives.
  • As of September 2024, more than 48,000 housing units have been created or preserved throughout the city, which is more than 96% of the total unit goal.
  • Approximately 22% of these units are considered affordable, with the remainder being workforce or market rate units. The breakdown is:
    • 48,391 created or preserved Units
    • Affordable | 4,625 created & 6,020 preserved
    • Workforce | 11,228 created ​
    • Market Rate | 26,518 created

Significant progress has also been made in several of the Plan's nine policy initiatives including:

HPP Initiative 2- Zoning

  • A text amendment was approved to allow accessory dwelling units (ADUs), citywide in September 2023.
  • As of September 2024, the Planning and Development Department has issued 233 building permits for ADUs in Phoenix.
  • The Planning and Development Department led the Walkable Urban Code expansion text amendment, which was approved in February 2022.
  • A text amendment to address parking standards and reductions for multifamily development was also approved in January 2024.

HPP Initiative 3- Redevelop City-Owned Land with Affordable Housing

  • 140 parcels were identified as suitable for residential development and approved by Mayor and City Council.
  • 26% of those approved parcels have been released via Request for Proposal (RFP).
  • Due diligence for additional RFP releases is underway and additional parcels are being considered for future housing development.

HPP Initiative 4- Enhance Public-Private Partnerships and Increase Funding

  • Four private development projects were awarded gap funding from a $6 million allocation of American Rescue Plan Act (ARPA) funding In June 2023.
  • This funding is assisting in the creation of over 500 new affordable housing units throughout the city.

HPP Initiative 7- Preservation

  • $5 million of ARPA funding was awarded to a local community development corporation in 2023 to create permanently affordable homeownership opportunities through a Community Land Trust (CLT).
  • Through this funding, at least 25 new homeownership opportunities will be provided, with future sale proceeds being reinvested back into the city.

Future Affordable Housing on City-Owned Land

  • Helen Drake Village: 80-unit affordable senior housing
  • Central and Columbus: planned 250-unit mixed-use affordable housing
  • 9th Street and Jefferson: planned high-density, mixed-income and mixed-use development
  • Ambassador West: planned high-density, mixed-income and mixed-use development
  • Marcos de Niza: Redevelopment of public housing to higher density mixed-income housing

Landlord Incentive Program

The Housing Department launched the Landlord Incentive Program in 2020 in order to incentivize private market landlords to accept Housing Choice Vouchers (HCV). Throughout the life of the program:

  • $7.8 million in CARES Act and ARPA funding was utilized.
  • 4,700+ incentive payments were made to landlords.
  • 900+ new landlords were added to the HCV program.

While all funding for the program has been expended, the Housing Department is still seeing interest in new landlords joining the HCV program. In October 2024, more than 50 current and prospective landlords attended a landlord open house to ask questions and gather additional information.

Through our gap financing program, the Housing Department serves as a lender to private affordable housing developers by providing development gap funding. When funding is provided to a project, the city records a deed restriction, called a land use restrictive agreement or LURA, on the units funded. This LURA ensures long-term affordability, which is currently set at a 40-year term.

  • Since 1993:
    • Gap financing has supported 8,700 + units in 140 projects.
    • $119 million in HUD funding has been provided to affordable housing developers.

Down Payment Assistance

The Open Doors Down Payment Assistance Program is designed to assist eligible first-time homebuyers. Federal HOME funds are offered as a deferred payment, 0% interest loan that is forgiven after a period of 5 to 15 years, depending on the amount of assistance provided.
  • Since 2013, more than 90 families have utilized $1.4 million in funding to help buy a home through this program.
  • $1.3 million in the process of being distributed and is expected to assist an additional 50 households.

Affordable Housing WiFi

The Housing Department is also committed to ensuring connectivity advancements to help address the digital divide.

  • $3 million in ARPA funding is providing wi-fi and internet connectivity, digital skills training and broadband infrastructure at more than 35 of our affordable housing communities across the city.
  • This ARPA funding will provide connectivity for 3 years.
  • To address longer-term funding for this initiative, we recently collaborated with several other departments on a federal digital equity grant submission.

Housing Needs Assessment

The Housing Department also presented an overview of a recently completed housing needs assessment. Knowing the COVID-19 pandemic increased housing pressures in Phoenix, the Housing Department worked to obtain a current Housing Needs Assessment as the needs assessment in the Housing Phoenix Plan was based on data available in 2019. The current assessment provides new data and a deeper analysis than what was included in the Housing Phoenix Plan. The results of this current analysis will serve to inform future policy recommendations. Some of the key takeaways from the review of the assessment include:

  • Approximately 57% of all subsidized housing units in Maricopa County are located in Phoenix.
  • The amount of land in Phoenix that permits multifamily development far surpasses other cities and allows us to accommodate future housing development.
  • 20% of Phoenix zoned property permits multifamily development of 4 or more units per lot.
  • 64,000 + housing units have been entitled through rezoning actions from March 2019-September 2024, the majority being multifamily units.
  • 52% of all rental households are cost-burdened, meaning they pay more than 30% of their gross income towards housing costs, which includes rent and utility costs.
  • Phoenix's extremely low- and very low-income renter households have the most limited housing options due to the low level of units with associated affordable rents.
  • There is a gap of 59,000 affordable and available units for households at or below 50% of the area median income. ​

Other factors that have had a significant impact on our housing supply in Phoenix:

  • The shortage of housing supply, relative to the demand, is a reason for increased housing prices.
  • During the pandemic, Phoenix's population steadily increased and put additional demand on the already-constrained housing stock, which led to large housing price increases.
  • From 2019-2022, median rents increased by 47% and median sales prices increased by 56%.
    • As of June 2024, the average median sales price in Phoenix was $440,000. The median home sales price in 2019 was $256,000.
    • Current market conditions make it more difficult to purchase a home.
  • Short-term rentals and investor purchases, which have contributed to our housing affordability challenges.

The City of Phoenix is dedicated to creating and preserving a variety of housing options for residents of all income levels and backgrounds. The City knows there is a need for more affordable housing and there is capacity to create, support and accommodate more housing of all types in the future. Prioritizing housing ensures Phoenix is a vibrant, inclusive community with housing choices for all.