Tempe puts its all in addressing the affordable housing crisis

Understanding the paradigm shift that is the city of Tempe’s Hometown for All affordable housing initiative is a whole-body experience. 

There is the heart of the matter. Addressing the affordable and workforce housing shortage in Tempe is a long-established community goal. As elements of a vibrant, healthy community, housing variety and affordability are civic objectives expressed in General Plan 2040 that voters approved in 2014.

There is the mind. Some of Arizona’s best thinking on addressing the devastating affordable housing crisis is found in a Tempe strategy adopted by the City Council in 2019. 

And then there is the all-important skin — as in, in the game. 

With Hometown for All, approved by the City Council in January 2021, Tempe puts its money where its mouth is in addressing affordable housing challenges. The strategic initiative provides a dedicated revenue source to purchase land and properties with the sole purpose of increasing permanent affordable and workforce housing stock. It also established a system for developers to make voluntary contributions to help the city meet affordable housing goals. 

Tempe, like no other Arizona municipality, is all-in on addressing affordable housing needs within city limits and within the confines of state laws that prohibit certain planning and development tools, such as inclusionary zoning, that are at the disposal of communities in other states. 

“We are putting our own skin in the game,” Tempe Mayor Corey Woods said. “It’s not just asking the developers to solve this problem. It’s not just crossing your fingers and your toes and hoping the problem solves itself. It’s actually the city saying this is an important enough goal to us that we are willing to put our own money into this account to ensure that we meet this challenge. That’s important.”

Hometown for All is designed to produce more of the permanent affordable housing stock that affords lower- and moderate-income Tempe residents the opportunity to enjoy the comfort and wellness of housing security. Under the initiative, the city moves 50 percent of certain permit fees from the general fund into an affordable housing account. About $6 million in fees and developer donations were deposited into the affordable housing account in Hometown for All’s first year.

“It’s like people say, ‘In life, don’t talk about it; be about it,’” Woods said. “It’s one thing to walk around and say I support affordable housing. It’s another thing for a city council unanimously to say we do support affordable housing in our community, and not only are we asking you developers to consider making a voluntary contribution, we’re going to put our own money into this account to make sure the fund continues to grow.”

"All cities should connect the dots like Tempe leadership has," said Terry Benelli, executive director of LISC Phoenix. "Affordable housing is vital for economic development to succeed, businesses need housing stock that is adequate for their employees at all levels. The success of Hometown for All shows that businesses understand the ROI for financially supporting affordable housing." 

Just as financial capital is critical to affordable housing construction, significant political capital is at the foundation of Tempe’s strategic initiative to increase affordable and workforce housing stock as an essential building block for sustaining an inclusive community. 

First-term Mayor Woods is a longtime champion of affordable housing. It was one of his key issues in a winning campaign for City Council in 2008. Then as a council member he put his back into work to address affordable housing, including successful development of projects like Valor on Eighth, Gracie’s Village and Apache ASL Trails. By the time Tempe voters elected him mayor in 2020, Woods was ready to help the city take next steps on affordable housing. In April, the Arizona Housing Coalition honored Woods as its advocate of the year for work that creates systems-level change in affordable housing and/or homelessness. 

Hometown for All is a product of experience, foresight, political will and legal realities of Tempe buying properties that become available and redeveloping them to meet specific community needs. 

“We’re not a profit-making entity at the city of Tempe,” Woods said. “We just have to balance our budget. We’re not here to get untold return on investment. We’re here to create the kind of community that really is inclusive and diverse for people of all backgrounds and all income levels and all occupations.”

The city acquiring land and issuing request for proposals to develop affordable housing and other components such as a grocery store is on more solid ground legally in Arizona than trying to compel developers through the city’s development approval processes to build affordable housing on their private property. 

“I cannot risk taxpayer money and the city’s credibility on a lawsuit that I, frankly, know is not winnable,” Woods said. “We’ve come up with a creative way for the city still to reach our goals.” 

Hometown for All also creates a neighborhood of other ideas and actions in Tempe for addressing the need to increase affordable and workforce housing options. The City Council has invested other funding sources to do things like purchase a motel for temporary transitional housing and redevelop the property into multi-family housing. In December, it purchased the site of the former Food City grocery store on Apache Boulevard with plans for a mixed-use development that includes affordable housing. 

Stephanie Brewer, executive director of Newtown Community Development Corporation in Tempe, said an initiative like Hometown for All has the potential to change dynamics that increases production of affordable housing.

“They are putting a process in place that is going to create more units,” Brewer said. “Actively doing it, not just waiting for a nonprofit to get enough grant money to do something in their town. They’re actively saying we need to produce units and we have the money to help you do it.”

And then there is the important show of leadership by example and the potential for ripple effects in other communities. 

“They are going to make sure affordable housing happens in their city,” Brewer said of Tempe leadership. “The fact that council and staff have made that decision and council has approved money to put behind it — pretty darn innovative.”