Candidates for City Council in south and west Phoenix's District 7 discuss ideas for affordable housing

Housing is on the minds of District 7 Phoenix City Council candidates as affordability, development and displacement have emerged as central issues across south and west Phoenix.

Rent and housing prices in metro Phoenix continue to soar, with the median home price recently hitting $315,000. That's good for someone selling a home, but squeezes out many residents looking to buy. 

While District 7 includes some of the Valley's most affordable housing, many parts of the district that covers parts of south, downtown and west Phoenix are feeling the upward pressure on prices.

A city study this year showed a quarter of the city's homeowners and half of renters are paying more than they can afford on housing. Phoenix needs 100,000 subsidized housing units to bridge the shortfall, the analysis shows.

The affordability of new housing has sparked clashes with the City Council as developers often obtain federal funding and calculate rents based on Maricopa County's median income of $77,800, which is substantially higher than the $42,000 median income in south Phoenix. The county's median income also is well above many ZIP codes in district 7, which is home to some of the poorest communities in Phoenix.

Developers say it can be hard to find a large enough government subsidy to build housing that would be affordable for the lower median incomes in the area.

That has left city leaders looking for ways to encourage developers to build affordable housing, to redevelop city-owned land for affordable housing and to devise legislation that could ease the problem.

Phoenix City Council candidates running to replace term-limited Michael Nowakowski in the Nov. 3 election offered up their ideas as home prices continue to rise. 

Four of the five District 7 council candidates talked with The Arizona Republic about their housing plans. Candidate Cinthia Estela did not respond in time for publication.

Francisca Montoya: More workforce housing

Francisca Montoya said there must be a focus on workforce housing to help essential workers who are overburdened by rent and transportation costs, citing the city's housing analysis.

“We had a housing affordability and homelessness issue before the pandemic,” she said. “And it’s only been exacerbated by the coronavirus. And it’s made us aware of how much we rely on essential workers, and many of these essential workers are the ones that can’t afford a place to live.”

She said many of these workers spend exorbitant amounts of time traveling to a minimum-wage job that can’t adequately cover all their expenses. Affordable housing, she said, must be available to those who are working to provide a public good.

Developers trying to build affordable housing often are on the hook for a lot, whether finding funds to subsidize costs to paying impact fees for infrastructure such as sidewalks, sewers and lighting.

"In order for the development to pencil out financially too many times it requires low-income housing tax credits and other types of incentives provided by local municipalities or the state in combination with some of these federal incentive tax credits,” Montoya said.

"That helps bring down some of the cost that allows for X-number of units to be made available for working families ... and it sometimes is difficult to attract developers that will build housing using this stacking of various financial pockets of funds."

There are organizations that work to build affordable housing, but it’s not nearly enough to meet the need, she said.

Montoya said she hopes to bring more incentives to developers, such as covering impact fees in exchange for a minimum number of workforce housing units. Creating deals in writing with developers who promise to bring affordable housing is essential to keeping them accountable, she said.

Gary Flunoy: Focus on locals

Flunoy said Phoenix's growth is out of control and must be tempered for the City Council to get a hold on it and slow the pace of displacement.

He said he wants to prioritize housing affordability for locals because available homes and apartments are getting scooped up by those moving into the area from more expensive places who are seeking comparatively inexpensive prices.

“We need to work on the federal, state, county and city level to manage that (growth),” Flunoy said. “I’m really afraid that you’ll have more and more families that have been living in this area for years now having to move out to Buckeye and places like that."

He called the current pace of growth "unhealthy" and "unstable."

Flunoy said the city’s poorest residents are getting left behind by affordable housing practices, such as using the county’s area median income for obtaining funding and determining affordability. He agreed with Montoya that the city should have incentives for developers to build affordable housing.

“It’s extremely challenging (to build affordable housing),” he said. “So we have to obtain funds to incentivize developers. Somehow the city will have to invest in that venture and the return on that venture will hopefully be significant in the long term for the people who live here.”

He said the City Council should push to create an affordable housing plan by working with residents and institutions such as schools to hear what residents need.

He said there still are negative views about affordable housing and renters in some planning committees that hinder new development that would benefit residents. 

“We have to get off our high horse. Yes, we need to make sure if fits in the area, but it doesn’t mean (renters) shouldn’t be able to afford to live in the District 7 area,” Flunoy said.

Susan Mercado-Gudino: Property tax diversion could help

Mercado-Gudino said she wants to use tax-increment financing to fund affordable housing projects. Tax-increment financing diverts future property tax revenue to a public improvement or economic development project. Arizona, however, is the only state that does not typically use tax-increment financing.

The diverted tax money goes toward established redevelopment districts, which are controlled by the City Council, instead of going to the general city budget. Most states require proof that a project cannot feasibly be built without tax-increment financing. Critics say this creates a lot of guessing that tends to benefit private consultants, which supply their own projections and data to persuade city planners.

She said the plan would divert money for community projects and allow people to live and work in their communities.

“With tax-increment financing, the money stays in the community,” Mercado-Gudino said. “People prefer to work near home and when they do, the money stays in the community, too.”

She also suggested capping rents and forging a path to bring in affordable, single-family homes so residents can become homeowners. She wants residents better connected to resources that will help them take the leap into homeownership.

“Some people don’t have (homeownership) as a goal in life because we are taught to struggle,” she said. “And it’s scary and they don’t know anyone who has taken that first step. That’s why, if I’m elected, I will share what I’ve been able to do when I was struggling. I think we have a lot of people who are making decisions about things they haven’t experienced.”

She called the current council a “dog and pony show,” and said some councilmembers are apathetic about the needs of constituents and have neglected to bring affordable housing to communities in need.

“Sometimes it feels like what’s the point of even coming (to speak to the council) if they’re just going to vote for whatever they want?” she said.

Yassamin Ansari: Follow a 'housing first' model

Ansari said she wants to implement a “housing first” policy to trigger a complex discussion about housing and combating homelessness. Housing first has been implemented in Salt Lake City and reduced homelessness by 91% within the first 10 years, she said.

Today, however, Salt Lake City’s homeless crisis is more complicated. Utah's state officials said the state never reached "functional zero" — or virtually no homelessness — but that it merely improved on federal metrics, which are not always reflective of the ways some people experience homelessness. At the same time, advocates said the program was successful and made strides in building permanent, supportive housing communities.

“I think this is the best way for Phoenix to pursue affordable housing because it removes all of that bureaucratic red tape that makes existing housing programs ineffective,” Ansari said. “I really think you can’t have a solution to homelessness without having a conversation on housing.”

She said allowing a variety of housing is another step in creating housing affordability, but that involves making room for them.

“A lot of zoning around the city of Phoenix render certain areas single-family housing and that created a challenge in bringing affordable housing,” Ansari said. “All different members of the community should be able to live in the community they’re working in. There has to be a variety of housing for that to work.”

That variety includes projects that set aside units for affordable housing. This would allow, for example, a person working at a restaurant downtown to live in the area. 

She and Montoya both said combating homelessness should be a citywide issue instead of just falling on District 7, which is home to the Human Services Campus.

That has put pressure to place more resources in and around District 7, but she said homelessness can’t be solved without it being treated as a city issue with specific, tailored resources put in place. She called the current crisis “inhumane” as homeless people endure 110-degree heat with only a tent, but she said she understands residents have their own concerns about opening more shelters around their homes and wants to work with them to create solutions. 

“I don’t think megashelters are long-term solutions. I want to see small, specialized shelters for disabled veterans, the elderly, LGBT youth,” she said. Megashelters "are a temporary solution that doesn’t help folks get out of this in the long run. I think with smaller, specialized shelters we have more opportunity to provide specialized support.”