Phoenix's 'ambitious' housing plan set bar low but led to progress. What happens next?
In 2020, Phoenix needed a housing plan to improve home affordability.
When Phoenix leaders set a goal to create or save 50,000 houses in a decade to improve home affordability, the Housing Director at the time questioned if it could be done. She said she worried the city was aiming too high.
Four years later, the city is 80% of the way to its target and likely to surpass its goal this year or next. The milestone is welcomed inside Phoenix City Hall and by Cindy Stotler, the city's former Housing Director.
Mayor Kate Gallego has repeatedly lauded the goal as "ambitious."
However, data show the city's goal did not aim to build more housing than the market was already producing. Rather, it strove to maintain existing levels of home construction.
Neither Stotler nor the mayor have explained how they came up with the goal of 50,000 units, except to say they looked at what other cities were doing, Atlanta in particular.
The findings raise questions about how the city determined its goal and whether more progress could have been achieved had the city been more strategic and aggressive.
Phoenix has substantially increased the number of affordable homes, particularly workforce units, in the city. It has outpaced Atlanta, its inspiration. But Phoenix still has a housing shortage, median home prices continue to increase year over year, and U.S. Census data show a third of Phoenix residents spend more than one-third of their income on household expenses.
David King, an urban planning professor at Arizona State University, said cities are best equipped to effectively combat their housing crises when they craft specific goals that directly target the problem.
Creating or saving a certain number of housing units is vague and unlikely to attack the root of the problem, King said. He noted better goals could be targets for affordable and workforce housing, and ensuring the units are built where they're most needed and helpful.
An Arizona Republic comparison of Phoenix and Atlanta's plans shows that Phoenix's goal was broader: It aimed for 50,000 units of any type of housing in 10 years, while Atlanta aimed for 20,000 affordable units in seven years.
It also shows Phoenix copied and pasted multiple sections from the Atlanta plan, including the letter from the mayor and the vision statement.
Stotler acknowledged the goal of 50,000 units was an underestimate and said she would have included targeted goals for affordable housing units, in retrospect. Stotler left her Phoenix job to work at the state housing department under former Gov. Doug Ducey and now works at the Phoenix Industrial Development Authority.
But the intent of the Housing Phoenix plan was about more than the headline number goal, Stotler said.
The plan was about shifting mindsets in favor of diverse housing and giving councilmembers political cover when constituents were opposed to housing developments, she said.
"That was our whole intent," Stotler said. "Just help the elected officials help us create more affordable housing."
She explained, "When elected officials are faced with major decisions (that) may be controversial, it helps them to fall back on policy so they can say, 'Well, we have a housing plan and ... we have a goal to create units.'"
To that end, the city has made strides.
None of the Phoenix City Councilmembers debate the importance and necessity of apartments or affordable housing.
They have made policy changes to speed the construction process, legalize backyard casitas and direct funding toward affordable housing. The city has launched a pilot program that aims to make homeownership possible for low-income families in perpetuity.
But as the city nears completion of its housing goal far ahead of schedule, and a housing affordability crisis still plagues the region, the question becomes: What does the city do next to solve the problem?
If the intent of the first housing plan was to spotlight the issue as one of critical importance, then how will the next plan dig deeper? The answer remains unclear.
Gallego told The Republic she was proud of the city's progress and the fact that Phoenix was the only city in the Valley with a housing plan — although outside the Valley, both Tucson and Flagstaff have them. Within the Valley, Mesa and Chandler are working on housing plans
She said she wants Phoenix to try "multiple levers" to combat the crisis in the future and "set new goals based on an updated housing needs assessment" when the existing goal is met.
But Gallego did not explain how the future goal would be determined and declined repeated interview requests for follow-up.
City officials don't explain how goal was determined
In 2020, Phoenix set out to build roughly 5,000 homes per year for a decade, but in the 30 years prior, Phoenix created 7,100 units on average per year, according to data from the Maricopa Association of Governments.
Stotler said officials believed the goal was ambitious because the Great Recession crashed the market, and they were unsure home construction levels would ever return.
Data show average home creation dipped to 2,700 per year between 2010 and 2015, but those figures rebounded in 2016 to 5,400 units and have not dipped below since.
In the three years before the housing plan, Phoenix built between 5,500 and 7,000 homes per year.
When asked how officials determined their goal of 50,000 units, Stotler said officials looked to other cities, such as Atlanta.
Atlanta's plan "had a good, ambitious number of housing units to create. We wanted to do something similar," she said.
Atlanta, which in 2019 aimed to create or save 20,000 affordable units in seven years, devised its goal based on data and outside expert analysis from an advisory group, HouseATL.
HouseATL board member Natallie Keiser told The Republic the goal was "triangulated off three data points:" how many affordable homes the city was losing, how many were being produced annually, and how many the city was short.
After evaluating "the extent to which development partners could scale to double or even triple production in an eight-year period," Keiser said the team landed on a "worthy, meaningful and achievable goal."
Phoenix officials, by comparison, created an "Affordable Housing Initiative," which identified Phoenix's housing needs, conducted community outreach, assessed the shortage and compiled best practices for affordable housing incentives.
The research was the basis for the city's Housing Plan, city officials said at the time, but they did not explain how it led to the goal of 50,000, and neither the mayor nor council members asked when the plan was approved.
Stotler's description of how the goal came about suggests it was somewhat arbitrary.
She said the Housing Department looked at other cities as a gauge, considered a goal of 30,000, talked it out internally, and then opted for 50,000 to be more ambitious.
The Republic's comparison of the reports shows several pages were directly copied and pasted or tweaked just slightly.
Former Atlanta Mayor Keisha Lance Bottom's introductory letter begins, "Atlanta’s vibrant culture, booming economy and welcoming spirit have attracted many new residents over the past decade, reinforcing what Atlantans have always known - our city is a great place to call home."
Gallego's letter begins, "Phoenix’s culture, booming economy, and quality of life has attracted hundreds of thousands of new residents over the past decade. This is further confirmation of what Phoenicians already know—our city is an exceptional place to call home."
Atlanta's vision statement at one point says, "For too many Atlantans, their ZIP code is a determinant of their access to opportunities."
Phoenix's vision statement is nearly entirely copied. It also says, "For too many Phoenicians, their ZIP code is a determinant of access to opportunities."
Gallego did not respond to questions about the copied language and if she or someone else wrote her letter.
Stotler said copying was common in government.
"If we find something that works very well, we try to copy it," she said.
Former housing director hoped for more affordable housing growth
Phoenix's housing assessment from 2020 found the city needed more affordable housing than market-rate: roughly 100,000 affordable units and 63,000 market-rate units.
Workforce housing is for people making between 60% and 120% of the area median income, which in 2023 was between $39,300 and $78,500 per year for an individual.
Affordable housing is for people making below 60% of the area median income, which was less than $39,300 in 2023. For a family of four, it was less than $56,100.
King, an urban planning expert, said the key to an effective housing solution is crafting detailed goals that directly and quickly target the problem — which in Phoenix, is affordability.
"Because we have so much growth in the Phoenix region, it really doesn't matter how many housing units we're building. The growth exceeds the number of housing units, so rents keep going up," King said.
More of any housing is a benefit, he acknowledged, but new housing doesn't age into affordability for decades, meaning low-income renters and buyers are not helped at the time they need it.
Phoenix's goal, which set a target for 50,000 homes, did not specify how many should be affordable versus market-rate.
The result has been roughly 35,000 homes built, and 5,000 saved. Half are market rate, half are affordable or workforce.
Here's a breakdown of the 40,091 units:
22,557 market-rate units created.
9,271 created workforce-rate units created.
8,263 affordable units saved or created:
Created: 3,308.
Saved: 5,225.
Stotler said it's more affordable housing than was previously being built but, "I was hoping to see more affordable units ... I would like affordable units to be a huge percentage of that."
Phoenix's thinking at the time, she said, was that building any kind of housing would help the situation. But looking back, she said she would have added targets for affordable housing.
"I think we were nervous to do that," Stotler said. "You can't predict the future. And we were doing the best we could."
Policy and mindset progress on affordable housing
Despite the absence of specific affordable housing targets and uncertainty over whether more could have been achieved, Phoenix has increased its supply and well-exceeded its overall home construction goals, averaging 8,700 total units per year between 2020 and 2023.
It is difficult to compare Phoenix and Atlanta's progress because Atlanta re-started its count in 2022 with the changing of the mayoral administration, and Phoenix has changed the way it reports its figures over time.
But while Atlanta has seen 4,500 affordable and workforce units finished in the last two years, Phoenix has far outpaced that at nearly 13,000 affordable and workforce units created or saved since March 2022.
Stotler said she was stunned by the explosion of home construction in the last four years. But beyond that, she and City Councilmembers are also happy with the policy changes that have been adopted since 2020.
The Housing Phoenix Plan had nine high-level policy goals. The plan sought to determine the most advantageous areas for apartments and make affordable housing easier and less expensive to build.
Most of the goals have been completed, by the city's own accounting.
The council set aside more than 140 land parcels to be redeveloped into mixed-income housing in 2022.
The city launched a Landlord Incentive Program, paying people $2,000 to rent to Section 8 housing voucher recipients — low-income residents who generally pay 30% of their income toward rent and utilities while the government subsidizes the rest.
Last summer, the council members approved a Community Land Trust pilot program that makes homeownership attainable for low-income buyers. The trust purchases properties and then sells the homes, but not the land, reducing the price tag. When the buyer wants to sell, the trust repurchases the home and sells it to another low-income family but directs a portion of the sale's proceeds to the departing family to ensure they build wealth.
The Council also reduced parking requirements at apartment complexes in certain areas, legalized backyard casitas and streamlined the approval process for developers.
Vice Mayor Debra Stark, in reflecting on the plan, said she has seen both the City Council and residents grow more accepting and educated about the importance of affordable housing.
"I think what you're seeing is the council is much more open to having those discussions and acknowledging that we have to address the issue in a holistic manner," Stark said.
Regarding residents, she said, "I feel that people are more willing to talk about having affordable housing."
Councilmembers Betty Guardado and Jim Waring echoed those sentiments.
Councilmember Laura Pastor said, "Affordable housing was not as big of a conversation 10 years ago. ... Under my leadership, I ask for 10% of city projects to incorporate 10% affordable or workforce housing."
On set to meet goal ahead of schedule, Phoenix will set new one
Phoenix is 80% of the way to its goal of building or saving 50,000 homes and has completed most of the objectives in its housing plan.
But the city is short 120,000 homes, global developer Hines told Axios Phoenix in January.
The median home price in the Valley grew $43,000 more expensive in the last year, up to $468,000 in April, according to Realtor.com.
In May, the mayor said in a statement the city would "set new goals based on an updated housing needs assessment" when the existing goal is met.
She said she wanted the city to try "multiple levers" to combat the crisis in the future. She did not elaborate on how future goals would be determined and denied interview requests.
King said the questions Phoenix leaders need to ask themselves is what they will do differently next time and how they will evaluate success.
"If Phoenix says that they're 80% of the way to their goals for affordable housing, what's the big goal that they haven't achieved yet? Affordability," King said.
"Phoenix is less affordable now than it was five years ago," he added. "So, there's something missing in these plans."
Taylor Seely covers Phoenix for The Arizona Republic / azcentral.com. Reach her at [email protected] or by phone at 480-476-6116.
This article originally appeared on Arizona Republic: Phoenix's housing plan set the bar low. Will the next be better?
