A new entrant to the race for the seat of Tempe Mayor Mark Mitchell is shining a light on one of the city’s thorniest problems.
Former Tempe City Councilman Corey Woods, who announced in March that he would challenge Mitchell, has made housing affordability central to his campaign, though both men said tackling rising costs of living is front of mind.
Tempe has over the past decade added a bevy of jobs and residents, netting major corporate relocations and allowing Arizona State University to flourish. But the landlocked city’s growth, along with a complex web of market and policy factors, has left the city’s low-income citizens with few places to live.
It’s a Valley-wide concern. A recent study from the National Low Income Housing Coalition found there were only 21 units per 100 extremely low-income households in the Phoenix metro area. The fact that Tempe is landlocked means it’s difficult to just add units for those households until the problem goes away.
Mitchell, who has been mayor since 2012, and was on the council for a dozen years prior, touts a record of encouraging workforce housing, including Valor on 8th, a 50-unit low-income development targeted for veterans the city helped build last year.
Woods, now chief of staff for ASU’s charter school, served on the council from 2008 to 2016 and is a former chair of the affordable housing subcommittee. He said he has the connections and know-how to ensure that the right developers are brought in to add affordable housing stock to the market.
Each candidate is well-credentialed from their time in city government, though Woods is younger, and he believes he may appeal to a more progressive part of the electorate. But no matter who wins the race in 2020, the extent to which the city’s mayor can wield their power to lower costs is unclear.
“(Affordability and livability) is always at the forefront,” Mitchell said. “But you know, there’s a lot of challenges with our legislature with what we can and can’t do.”
The state constitution has a so-called gift clause that “makes it very difficult for cities and towns to provide incentives for developers to do much of anything,” said Mark Stapp, the director of ASU’s Center for Real Estate Theory and Practice. According to certain strains of conservative jurisprudence, the clause prevents the government from playing favorites with taxpayer dollars. But Stapp said it binds the hands of city lawmakers who could otherwise offer tax abatements for certain kinds of development.
There’s also a 2015 law on the books that blocks cities from requiring that housing units are sold or rented at specific price points or to a specific “class or group of citizens,” though it does make allowances for cities to enforce certain regulations or grant incentives like density bonuses in an effort to increase the supply of “moderate or lower cost housing.”
And there’s the state housing trust fund, which was slashed to cover other shortfalls in the recession and has not been replenished since. At the federal level, cuts to affordable housing financing mechanisms in the U.S. Department of Housing and Urban Development have forced cities to compete for a dwindling supply of Section 8 and low-income tax credit dollars.
In effect, there are no easy answers, and Stapp said he’d be skeptical of a candidate who would offer one.
Woods’ solution is less of a policy than a mindset he said he’ll instill in others if elected.
“What I think what really has to happen is, you have to have someone coming into City Hall every day where affordable housing, building the next generation of middle-class housing, and also human services, is clearly top of mind,” he said.
“When zoning attorneys and developers come into town, the first person they typically meet with … is the mayor of the city,” he said. “Having a person in that role who has that kind of experience — it’s not saying I can wave a magic wand and stuff just magically happens — but I understand how affordable housing works, I understand how low-income housing tax credits work, and I have relationships with people in that industry where I think we can attract a lot more affordable housing.”
He said he can help guide affordable-housing developers through permit processes, and use tax incentives to convince market-rate developers to keep a certain number of units affordable, so long as he stays within the boundaries the legislature set.
That distinction between market and affordable rate is a key one. Look around Tempe, especially in the city center, and it becomes clear that developers are adding new units. But they’re generally targeted toward students and young professionals, not to the elderly, disabled, and working poor making less than 30 percent of the area median income, which is in the mid-$60,000 range in the Valley, said Joanna Sagar, research and policy coordinator for the Arizona Housing Coalition.
“You see all these market-rate developments go up, but they’re not meeting the needs of lower-income people,” Sagar said.
Woods is open about the fact that he voted to approve some of those developments while on council and says there’s a need for them. Market-rate housing goes along with the well-paid jobs that have come to the city over the past several years, and that growth and the accompanying tax revenue is necessary to fill city coffers. But this can cut both ways.
“Our economic expansion and the rate of economic expansion is a significant cause of this, coupled with the fact that we haven’t seen wage growth,” Stapp said. “In real dollars, we’ve just gotten back to the median household incomes we were at in 2007. That is as big a part of the problem as anything.”
There are basic market factors at play as well, all things that are beyond the reach of city governments. Labor shortages in the construction industry drive up build costs, as do the prices of timber and other materials caught up in tariff wars.
And there’s ASU, which has a valuable relationship with the city that both candidates want to maintain. The university has been playing property developer, leasing out some of its state-owned land to private businesses and co-developing a massive mixed-use project called the Novus Innovation Corridor, which will add even more luxury and market-rate housing.
So where does this leave whomever assumes the mayor’s office in 2020? Prevented from growing out, the city has to grow up and in. But building high-rise infill development will require overcoming dissent from NIMBYs in the city’s neighborhoods, which are largely zoned for single family homes or duplexes.
The city can also to reduce the overall cost burden for low-income individuals by finding ways to reduce costs for services like transit, but this requires substantial political will.
Stapp put it bluntly.
“It’s a classic use of the word conundrum.”