Arizona has always embraced growth. But recent rapid growth is outpacing our existing housing supply and this has presented us with a serious challenge.

Without enough housing, Arizonans, in particular our workforce and low-income families, are facing higher living costs and fewer housing options. One devastating result: an increase in homelessness.

Since my appointment to the Arizona Department of Housing in May, my priorities have been to ensure that affordable housing is available for all who live here. We are working with a wide range of partners to achieve that goal, including nonprofit and for-profit residential developers and housing-advocacy organizations. 

One program that could have a sizable and immediate impact just came online. The question is, will developers seize the opportunity?

These funds could build up to 1,500 units

The Department of Housing is making available nearly $24.5 million to housing developers right now, using state and national Housing Trust Fund dollars plus other pools of money.

Housing projects financed with 4% Low Income Housing Tax Credits are eligible for up to $2 million in gap financing per project. This funding could assist in the construction of 1,000-1,500 new affordable housing units over the next several years.

This gap financing is a vital component for developers dedicated to providing the affordable housing our communities need. Many times, it’s the difference between moving forward on a crucially needed, shovel-ready project or walking away.

With rising supply costs, it is an added incentive to build more housing, sooner.

Recent successes in Phoenix using gap financing include:

• Dunlap Pointe/Native American Connections in north Phoenix (54 units).

• 29 Palms II/Foundation for Senior Living in east Phoenix (25 units).

• St. Michael’s Crossing/Housing for Hope in north Phoenix (10 units).

Cash is key, but so is zoning. We're on that, too 

Why the urgent call to action? When a similar Notice of Funding Availability was made available in October 2019, we received but one application.

But that pool of money, totaling about $3.5 million, was restricted to nonprofits and geared toward housing for the homeless. The current Notice of Funding Availability is nearly seven times the amount and, more notably, welcomes for-profit developers to also participate.

Our department’s analysis suggests that Arizona needs an estimated 250,000 new housing units to keep up with demand. And I’m calling on affordable housing developers to apply for this gap financing and move forward with their sorely needed projects.

This funding is an example of how the Arizona Department of Housing is encouraging and supporting developers to build more affordable housing. However, even with abundant state and federal funding, new apartment communities cannot be built without zoning and site approval from our cities and towns.

Our department is committed to working with local governments and neighborhood stakeholders to overcome their often self-imposed barriers to new affordable housing. Working on community buy-in, combined with our financial incentive, we can create more opportunities and locations for affordable housing.

It is imperative that Arizona’s new homeless and housing plan rethink old approaches, create solid relationships between health care and affordable housing providers, and leverage all city, state and federal resources.

Our state has never before seen the current amount of resources dedicated to addressing the many needs along the housing spectrum – needs exasperated by COVID-19 – and we cannot afford to let this opportunity slip by. 

Gov. Doug Ducey and his administration are committed to finding practical and effective housing solutions for all Arizonans, and the Housing Department is working with stakeholders to provide funding anywhere they are needed to make it happen.