Tempe to get $11M from county for new affordable housing in northern part of the city

Tempe will receive $11 million from Maricopa County to buy land in the northern part of the city for a new affordable housing complex, part of Mayor Corey Woods' plan to beef up Tempe's housing stock in a big way during his second term.

Maricopa County is pulling the cash from its left over federal pandemic relief funds. County leaders have dolled out multiple such grants for affordable housing projects over the past month, awarding a combined $40 million to Valley communities.

Tempe's $11 million county grant is going toward the purchase of a piece of property somewhere in the city's northern half. Officials haven't settled on a specific property yet and they haven't fleshed out a solid plan for how it will get developed, but the "preliminary" plan is for the city to buy the land and then ask companies to bid on a contract to construct housing there.

City leaders believe the yet-to-be selected property will eventually house a complex with roughly 50 affordable units, which will be reserved for people making less than 80% of the area's median income. That's just under $60,000 for a two-person household.

“This funding by Maricopa County will help us reach our strategic goal of increasing the percentage of affordable housing in Tempe,” said City Manager Rosa Inchausti. “Issues like homelessness and affordable housing are regional and national issues. Our city greatly appreciates the support of (the county) to elevate our community’s efforts."

If Tempe does decide to contract with a private developer or sell the land to a company, the affordable units would likely only have to remain low-cost for a certain period of time, like a decade. The specific timeframe would be specified in a future development agreement.

Tempe could instead pump the money into its Hometown for All program, which is designed to create housing units that remain permanently affordable because they're controlled by the city. It's an alternative to the typical method of creating cheap housing by asking companies to include a certain number of temporarily low-cost units in a development in exchange for certain perks, like permission to build taller.

Hometown for All gives developers a way to get those perks or otherwise make their project more attractive to officials by donating to a city-run nonprofit, which then uses the funds to create homes where Tempe controls the rent. The city also donates half of its permit fees to the effort.

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City Spokesperson Susie Steckner said that "at this point in time, no decisions have been made regarding the extent of (the Hometown for All nonprofit's) involvement in this p

roject." But if Tempe does decide to go that route the county grant could be a major boon to a program that has struggled to secure substantial funding since its creation in 2021.

The most recent figures online show the program has only brought-in about $3.3 million in developer donations and $4.5 million from city permitting fees, so the roughly $11 million county grant could double Hometown for All's financial wherewithal in one shot.

And as of last December, the program had helped fund the creation of about 450 units ― although only 59 of them had actually been constructed — so the roughly 50 new units that the county grant is slated to help fund could increase the program's housing unit output by at least a tenth.

Regardless of whether the city does opt to use the grant for Hometown for All, the cash is likely to help Woods hit the ground running during his second mayoral term as he tries to mitigate a ballooning housing market in which half of Tempe's residents are "cost-burdened" and to struggle to pay rent.

It's also likely to come into play as part of the city's effort to battling against pervasive homelessness, which the Maricopa Association of Governments' point in time count suggests is still on the rise in Tempe.

"The collaboration between county and city government in the pursuit of affordable housing is a powerful alliance. It combines the strengths of both entities, allowing for a more comprehensive and effective approach,” Board of Supervisors Vice Chairman Jack Sellers. “Our shared efforts ... will provide housing solutions in the near term and lay the groundwork for a prosperous future for all who will call this development home."

Tempe it is still searching for a viable property to buy with the county grant and said "there is no timeline for a purchase."

This article originally appeared on Arizona Republic: Tempe gets $11M from county for new affordable housing project