Glendale to nix fees for affordable housing projects
Affordable housing developers in Glendale will soon be able to save some money after the city waived community development fees for their projects, an effort city leaders hope will bolster a much-needed affordable housing supply.
The Glendale City Council unanimously supported a change that will waive community development fees for projects that are awarded tax credits through the Arizona Department of Housing. The amount of money due in fees varies based on the size of the project, but can range from about $300,000 to $1 million, Jean Moreno, community services director for Glendale, said.
“We are finding that for affordable housing developers, even though they’re getting Arizona state tax credits, they are still coming up with issues where they are having a gap in funding,” she said. “We were looking at ways where the city could work as a partner.”
Waiving the community development fees was “low-hanging fruit” for Glendale, Moreno said. Often, and in other cities, fees can be waived or reimbursed on a case-by-case basis, but the change allows developers to count on that savings and plan accordingly. Developments that are not receiving state tax credits could still get fees waived if the city determines that it meets other affordability qualifications and if the council approves it in a development agreement.
Fees generated from development go into the city’s general fund, Moreno said. Now that fees will be waived for certain developments, Moreno will annually report back to the council about how much was waived in fees.
The program could be reassessed if the city finds a noticeable difference in revenue with the waivers. However, Moreno said affordable housing makes up a very small percentage of all development in Glendale, so the forgone fees are only a small piece of what is collected in development fees for the city.
At the meeting about the change, Councilman Jamie Aldama said Glendale is a leader in the development of affordable housing, and a move like this makes Glendale “a greater, more affordable place to live.”
Glendale has five developers working on seven different affordable housing projects in the city now, Moreno said. Most of the developments are in the southern portion of the city, but she hopes that other portions of the city will also see new affordable development.
The next project in Glendale to begin development will be Gorman & Company’s 368-unit complex, called Centerline on Glendale, on a 15-acre site near 67th and Glendale avenues. That project is the first to use an Arizona low-income housing tax credit created in 2021.
Many affordability programs require a development to be designated affordable for a 30-year period, and Glendale has many that are reaching their 30year deadline. Once the affordability period expires, if residents renew their leases, they are renewed at market rate, Moreno said. With many apartments reaching that threshold within the next five years, it is important to replenish the supply of affordable units.
The city has about 1,000 units of affordable housing that are under a tax credit at an affordable rate, and another 2,000 households that receive housing assistance vouchers, Moreno said, so about 3,000 households in the city are benefitting from some form of assistance. In analyzing the city’s housing needs and incomes, Moreno said there are about 14,000 households in the city that could benefit from these programs.
“I’m not saying we need to build 14,000 units, but I am saying we need to strike the balance and help build up affordability,” she said. “We are trying to do our part to ensure residents have the opportunity to continue to live and work in our community.”