City leaders OK innovative rental-house development

Some residents oppose ‘affordable’ housing project

Posted 1/9/20

Leaders in one West Valley community seeded ground for an innovative residential development, which some hope — and others fear — will bring much-needed affordable housing.

But the …

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City leaders OK innovative rental-house development

Some residents oppose ‘affordable’ housing project

Posted

Leaders in one West Valley community seeded ground for an innovative residential development, which some hope — and others fear — will bring much-needed affordable housing.

But the project’s potential impact proved a point of contention, with some residents claiming the project will attract poor people and crime and drive down their property properties.

Developers of the complex, known as Vita at Greer Ranch, seek to build 149 standalone and duplex rental units on 10 acres at the northeast corner of Cactus and Reems roads in Surprise.

Discussion and debate over the rezoning case — just one of 8 action items on the agenda — took up more than half of the 2.5-hour Surprise City Council meeting hosted Jan. 7 at Surprise City Hall, with experts and disgruntled residents weighing in during the public hearing.

Land use attorney Adam Baugh of the Withey Morris law firm, which represents the developer in its rezoning case, explained the project and its importance to the local housing market.

“This is for renters by choice,” Mr. Baugh said. “People who are either young professionals who want a maintenance-free obligation and don’t want to worry about mowing a lawn. Or somebody who’s retiring who decides they want to preserve the value of their investment, sell their home and not worry about the next cycle crash.”

A relatively new hybrid product in the Phoenix area market, standalone rental units strike a balance between traditional high-density, multi-story apartment blocks and single owner, single-family houses, such as those in the adjacent Greer Ranch and Marley Park communities.

But with rentals, the new development — which features single and duplex units with an owned-home aesthetic along with deluxe community amenities — targets millennials and those headed toward retirement, who may want luxury without the burden of home ownership, Mr. Baugh explained.

“Because they are renters by choice does not mean they want to live in a two or three-story apartment with people living above you or side-by-side,” he said. “Instead of having three-story apartments, you can still have a multifamily rental product that’s similar to the homes that surround as far as scale and size. That’s what we’re trying to achieve.”

A similar community in nearby Marley Park was built by multifamily developer Christopher Todd and offers two options. Renters can choose between a 1 bed, bath standalone with less than 700 square feet at around $1,200 per month; or a 2 bed, 2 bath option with just over 1,000 square feet for about $1,600.

While the Vita at Greer Ranch development also won’t likely attract low-income renters, it fills a needed niche in the Surprise market, Mr. Baugh said.

He showed a pie graph based on data he said were obtained from the Maricopa Association of Governments, which displayed the distribution of land uses in Surprise. Of all uses, multifamily housing accounts for less than 1% of land in the community.

By comparison, other large Valley municipalities devote a far-greater percentage of land use to higher-density housing developments, he said.

The top five cities for multifamily are Tempe (28%), Scottsdale (14%), Mesa (11%), Phoenix (10%) and Chandler (9%). Glendale, Avondale, Peoria, Goodyear and Gilbert ranged from 8% down to 3%. Only Queen Creek and Buckeye had a smaller proportion of multifamily usage than Surprise’s .88%, with .4% and zero respectively.

“Multifamily is severely underserved in Surprise,” Mr. Baugh argued. “It’s a city that’s growing. And as you grow, you’ll eventually balance things out. But this is a great opportunity to balance it out.”

However, despite the demonstrated statistical need for more housing options, some of the proposed community’s neighbors were angered at the prospect of renters living in their back yard.

Greer Ranch resident Patty Brant spoke out against the rezoning request, arguing the new complex will open the door to those who qualify for Section 8 housing assistance through the federal government.

“I believe the developer said there will not be any Section 8 units there,” Ms. Brant said. “That is a federal law. There is now way anybody here is going to stop that.”

Claiming to have worked for the U.S. Department of Housing and Urban Development while living previously in New Jersey, she insisted nothing can prevent any person who qualifies for the federal voucher program from moving into the community.

“I could go anywhere in the U.S. with that certificate and no one is going to tell me they will not rent to me,” Ms. Brant said. “Because if they do, that’s a problem.”

However, an August 2019 report from Cronkite News countered such claims, pointing out protections afforded those in other states, cities and counties — including Ms. Brant’s former home state — are not provided to would-be renters in Arizona.

“Ten states, Washington, D.C., and dozens of U.S. cities have made source of income a protected class, meaning you can’t deny someone a home just for having a Section 8 voucher. So far, however, no Arizona cities have followed suit, nor has the state,” the report stated. “Race, sex, religion and nationality are ‘protected classes.’ If you’re a landlord in Arizona you can’t deny someone a home just because she uses a wheelchair or because she’s Jewish, or a mother, but it’s perfectly legal to turn her away because she’s poor.”

According to affordablehousing.com, the only states that can force landlords to accept Section 8 vouchers are Connecticut, District of Columbia, Maine, Massachusetts, New Jersey, North Dakota, Oklahoma, Oregon, Utah, Vermont, Washington and New York. California, Hawaii and Maryland are considering adopting protections for federal voucher holders.

Whether or not the new Surprise complex will draw low-income renters, the need for new housing options is great, according to Mark Stapp, professor and executive director at the W.P. Carey Master of Real Estate Development graduate program at Arizona State University.

He said while hybrid rental standalone developments are growing in popularity across the Valley real estate market, at the typical price point, none are likely to attract federally subsidized renters.

“People who say that are just ignorant,” Mr. Stapp said. “They have no idea what Section 8 housing really is. They have no idea how affordable housing actually works. And they are simply scared and that’s unfortunate.”

The federal definition of affordable housing encompasses people who earn between 20% and 120% of an area’s median income who have a third of their income burdened by housing costs. The Section 8 voucher pays the cost of rent in excess of that burden, but has limits on how much can be paid.

But with higher rents, those who qualify for Section 8 could not afford to live in such communities and landlords are unlikely to accept when higher-income renters are already waiting in line. Instead, these kinds of rentals are aimed at those with decent income, but perhaps not the desire or means to buy, he said.

“If you’ve got $1,200 or $1,600 a month, that means you’ve got to be able to afford that kind of rent and who are you?” Mr. Stapp said. “You might be a nurse. You might be a lab tech. You might be working at Intel. The problem we have in this community, like across the country, is affordability for working people.”

He said fears about renters in need of affordable housing are largely unfounded and building an economically diverse community is crucial to its long term success.

“People are afraid of those who are different than them and they get concerned that the housing that’s going to be next to them is going to be ‘affordable,’” Mr. Stapp said. “But we need affordable housing. We need it badly. And it’s not like, ‘Oh, my God! There’s a bunch of ethnically different people that are going to live next door to me and they’re poor people and they’re going to steal my TV and eat my dog.’ That’s the ignorance that drives me insane. But there’s no way on God’s green Earth this is going to be a Section 8 project.”

He said while this project may not appeal to lower-income renters, making room for a broad spectrum of people is a key to building healthy communities and economies.

“People get worried about ‘poor people’ living by them. But the most vibrant, resilient communities are those that are diverse,” Mr. Stapp said. “Diverse culturally, diverse economically, and diverse ideologically. When people get concerned about different kinds of people living nearby, I think it’s a short-sighted approach to life.”

Surprise District 4 Councilman Ken Remley — who voted with the 5-2 majority to approve the zoning case — agreed with the professor’s assessment.

While he counted himself among vocal opponents of similar projects previously proposed in the area, he now believes they are of value to the community, he said.

“One of these that I’ve heard tonight is about how we’re going to have a lot of crime and how we’re going to have a lot of Section 8,” Mr. Remley said. “I was one of you not that long ago, just before I ran for office when the first Christopher Todd community came to Surprise and it was a totally new concept and we’d been used to apartment complexes two and three stories tall — most of which are 100% occupied by the way.”

He said several similar communities already developed in Surprise have been successful, despite predictions of crime, traffic and other problems.

“I heard everybody else saying, ‘You know, it’s going to bring a lot of riff-raff. It’s going to bring some real traffic problems … and our property values are going to go down,’” Mr. Remley said. “Let me tell you. Just the opposite has happened… I saw those who were in opposition, and I was one of them, and we were wrong.”

But despite his initial opposition to the standalone rental community, which was built across the street from his own neighborhood, he has since been convinced the renters there are just what his city needs.

Empty lots — not rental complexes — pose a greater harm to the community, no matter what some may fear, he suggested.

“I do not see the traffic congestion and other problems everybody’s talking about,” Mr. Remley said.

“I have to make a vote, which is going to consider what is in the best interests of the city of Surprise and its residents. Not what some community is afraid is going to happen.”

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