AZ Central

Renovations bring multifamily affordable housing to W. Valley

By Kaila White, The Republic, September 14, 2014

One of the best things about Elizabeth Maciel’s new apartment is the brand-new playground just steps from her front door, where she can watch her four young children play through the blinds in her favorite part of the house — the spacious kitchen.
With three bedrooms and a renovated bathroom, her home is bigger and nicer than anything she has ever lived in, but the rent is about half as much as her other homes, she said.

Maciel, 26, lives in Ironwood Village, a formerly foreclosed apartment complex in downtown Glendale’s Centerline district that was recently renovated to create affordable housing for low- and moderate-income people.

Monthly rents range from about $570 for two-bedroom apartments to $775 for three bedrooms, utilities included. The complex is among a handful of similar new and planned revitalization projects designed to bring safety and stability to neighborhoods in the West Valley.

The city, state, a non-profit and a developer partnered on the complex’s $9.5 million renovation, with $2.1 million coming from the city via federal neighborhood-stabilization grants.

The developer, Gorman & Company Inc., also has plans for a multifamily affordable-housing project in Avondale. Madison Heights, a public-housing community near Van Buren Street and Dysart Road, will be demolished and rebuilt once the developer secures funding.

Madison Heightsand a complex in west Phoenix were the top two priorities on Housing Authority of Maricopa County’s list of redevelopment projects, according to Brian Swanton, Gorman & Company’s Arizona market president.

They also are the only projects in Arizona approved by Congress for transformation under the new Rental Assistance Demonstration program.

Though single-family homes are the most popular, some West Valley cities are partnering with non-profits and private companies to build multifamily affordable-housing complexes, some to help an area recover from foreclosure, others to improve dilapidated public housing.

Ironwood Village includes 95 units, a pool and many new amenities, including solar panels, a computer lab, a fitness room and a multipurpose room, which houses free before- and after-school programs.

Elizabeth Maciel reads one of her children’s Mother’s Day poems in the kitchen of her three-bedroom apartment at the recently renovated Ironwood Village in Glendale.

Since moving in, Maciel has been able to afford a few luxuries. She recently took her children to dinner and to see “Teenage Mutant Ninja Turtles.”

“I would love to get a house of my own someday, but I know me staying here, being here, I think I’ll be able to do that. You know, afford this place but save up on the side,” she said.

It’s common for people with low incomes to spend as much as 50 percent of their gross monthly income on rent, which makes it difficult to afford other necessities or save for a home of their own, said Michael Trailer, director of the Arizona Department of Housing.

“It goes beyond just housing,” he said.

“In our community, we like people to be productive and pay taxes; it’s pretty hard to do that when you don’t have decent housing. Simply put, housing creates stability in families and communities.”

Ironwood Village is an example of the new model of multifamily affordable housing, he said.

“We’ve come a long way from the old days of public housing. We’re not just trying to put a roof over people’s heads; we’re trying to build these projects in locations close to jobs and education and services which provide the best access to opportunity.”

In order to be able to receive federal funding, Gorman & Company had to find a foreclosed complex within certain areas that the U.S. Department of Housing and Urban Development deemed neediest and with the most potential for impact, a difficult task that had them looking at about 40 properties before picking Ironwood Village and another one in Phoenix, Swanton said.
Most of the affordable-housing revitalization is in or near Phoenix because of greater access to transportation for work and school.

The lack of light rail has created a challenge for West Valley revitalization, as there are more incentives for developers to buildaround the light-rail area, Swanton said.

But Ironwood Village fell within an approved area by a single block, he said. Gorman & Company, Catholic Charities Community Services, the Arizona Department of Housing and Glendale partnered to revitalize it.

“It was a property that was literally falling apart at the seams. … Physically, it was a nightmare,” Swanton said. “And quite frankly, the existing tenant base was a challenging one.”

About half of the residents moved out during the renovation process — most when they saw the new credit- and criminal-background standards, he said. In other cases, up to eight people were living in a two-bedroom apartment, which is considered overcrowding by federal standards.

Gorman was required to use the federal funding to find more-suitable homes for those families, in some cases giving up to $30,000 for their relocation, Swanton said.

Year over year in August, police received about half as many calls for service from the complex once Gorman took over and began renovation in 2012, according to police logs.

“If we go into a neighborhood like where Ironwood is and rebuild the complex, it starts to revitalize the neighborhood. It’s like dominoes,” Trailer said. “We’ve seen it over and over again where we’ll go into an area that has deteriorated and rehab an existing complex and, all of a sudden, everybody else starts fixing theirs up, too.”

Gorman completed another multifamily affordable-housing project in 2011, the Glendale Enterprise Lofts across the street from Glendale High School in the Centerline district, which runs along Glendale Avenue between 43rd and 67th avenues.

Since then, a gourmet taco shop opened and a shopping center was remodeled down the street, and the high school opened a new culinary building — investments that are related to the Lofts’ improvement, said Brian Friedman, Glendale’s director of economic development.

“There is a positive ripple effect. Once one business starts remodeling, we see others also investing in new projects, improving their properties and new private investment being planned,” Friedman said.

A shopping center, Circle K, McDonald’s and Burger King have been remodeled near Ironwood Village, he said, and Ascent, a data-center company, has planned a new campus nearby.

Both Ironwood Village and Glendale Enterprise Lofts were 100 percent occupied within weeks of reopening.

Most other West Valley cities that receive federal funding for housing aid, such as Peoria, use it mostly for single-family homes through work with Habitat for Humanity and Chicanos Por La Causa.

In addition, the non-profit Native American Connection has bought land in Glendale, near Laurie Lane and 59th Avenue just north of Centerline, and is awaiting financing to build multifamily affordable housing for seniors.

Solar-powered units, by Catherine Reagor, Arizona Republic, December 1, 2013

A housing development in Tempe called Gracie’s Village opened last week. The project, on Apache boulevard, along the Valley Metro light-rail line, has 50 affordable housing units above a thrift store.

All are solar-powered.

Developer Gorman & Co. worked with Grace Community Church of the Valley and the Arizona Housing Department to develop the three-story project.

Rental rates start at $394 a month for a one-bedroom apartment. Families earning $18,600 to $46,260 a year can rent at Gracie’s Village, which also has two-and three-bedroom apartments.

The development has a multipurpose room for before and after school care, a Wi-Fi Internet lounge, a roof deck, playground, picnic area, frontloading energy-efficient washer and dryers inside each unit, hard-surface flooring and electronically controlled entry.

Mesa gets bit of boost in low-income housing

Ariz. to get 7 subsidized projects this year vs. 18 in 2012

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Ramiro Ibarra (left) and Jose Ibarra level gravel on a road at the site of a low-income housing project in Mesa.

Photos by Stacie Scott/The Republic

The northern side of University Drive near downtown Mesa used to be, figuratively speaking, the other side of the tracks.

Seventy years ago, Mesa chose the neighborhood as the site of its first low-income housing project financed with federal money.

During World War II, the low-slung bungalows housed airmen training at Falcon Field.

But after the war, the Escobedo Apartments reverted to their original purpose: providing roofs for many who otherwise wouldn’t have one.

Faced with a monumental bill to rehabilitate the decaying units, Mesa closed them in 2008. The tenants got vouchers for reduced rents in other quarters.

Now, Escobedo is being reborn.

You can still see many of the original units, fenced off and slowly crumbling. But others are gone, and in their place is the frame of a low-income complex called Escobedo at Verde Vista.

It’s happening because last year the Arizona Department of Housing included the complex among projects approved for federal tax-credit financing. This year, Escobedo’s second phase, which will add 62 units to the 70 under construction, also received funding.

Overall, the list of approved housing projects statewide — only seven — is far shorter than the 18 issued by the department last year.

And while last year’s projects included nine in the Phoenix metro area, this year there are only two, both in Mesa.

In addition to Escobedo, the department approved a 78-unit complex proposed by Scottsdale-based Algarve Partners on the site of an old motel at 950 W. Main St.

The Algarve Apartments complex will be adjacent to a light-rail extension under construction, complying with the housing department’s goal of building as many units as possible next to public transit.

These complexes, and others like them throughout the Valley, are built by private companies or non-profit agencies, rather than with public money.

But public money is involved because the companies receive tax breaks under a Reagan-era program designed to spur investment in affordable housing. The federal government issues a certain amount in tax credits each year, and the states decide which projects are worthy. This year, Arizona sifted 32 applications.

Rent at Escobedo will range from $256 for one-bedroom units to $824 for the most expensive four-bedroom models. The first residents are expected to arrive in late September.

“Without the tax credits, none of this would be remotely economically feasible,” said Brian Swanton, Arizona market president for Gorman & Co., which is building the Escobedo project.

Swanton said Escobedo and other tax-credit projects around the state won’t fill the demand for affordable housing.

Already, he said, 100 people are on the waiting list for Phase I without the company doing any marketing other than putting signs on the construction-site fence.

“I was surprised by all the demand,” Swanton said. “We will literally fill up overnight.”

Nationwide, he said, industry experts have estimated there is $25 billion in past-due capital needs for affordable housing.

“It’s a crisis,” Swanton said.

The disparity between last year’s long list of approved projects and this year’s short one was deliberate, Housing Department spokesman Daniel Romm said.

In 2012, the department beefed up the project list using 25 percent of the tax credits it knew would be available this year, he said.

“Our goal was to leverage our program to create immediate job growth,” Romm said. “As a result, we invested over $200 million in financing to fund 18 low-income rental projects, creating over 1,200 low-income rental units in seven counties.”

That, he said, “was the most ever funded in one year by ADOH.”

Those who received last year’s tax credits, which totaled more than $20 million, were required to speed up the construction timetable, and ground was broken for Escobedo and two other projects in Mesa late last fall.

Total investment in Escobedo at Verde Vista is estimated at $23 million.

It is being built under the auspices of the Save the Family Foundation, a Mesa charity created in 1988 to serve homeless families.

It partnered with other non-profits and Wisconsin-based Gorman, which specializes in affordable housing and urban redevelopment.

The project includes a new headquarters for Save the Family and a social-services campus on the southern side of University Drive.

In addition, four of the original bungalows are being preserved for historical purposes. They will house a fitness center, computer classes and other services for Escobedo’s new generation of residents.

http://www.azcentral.com/community/mesa/articles/20130802mesa-arizona-low-income-housing.html?nclick_check=1

 

RELATED INFO

Newly approved projects

These are the seven projects approved by the Arizona Department of Housing this year for tax-credit financing:

Amity Residences for Veterans, Tucson, 65 units.

Escobedo at Verde Vista Phase II, 125 E. University Drive, Mesa, 62 units.

Crossing Point Villas, Sierra Vista, 60 units.

WMAHA Homes VI, Fort Apache and Whiteriver, 46 units.

Algarve Apartments, 950 W. Main St., Mesa, 78 units.

Bowman Senior Residences, Nogales, 48 units.

Sun Ray Family Apartments, Douglas, 57 units.

Tax-credit program

The Tax Reform Act of 1986 changed how the federal government promotes low-income housing.

Rather than pay directly to build such projects, the government now gives tax breaks to entities willing to finance them privately.

The IRS divvies up a set amount of tax credits per year among the states, based on population. In Arizona, companies that want to build projects apply to the Arizona Department of Housing.

Winners don’t always have their own money for construction and may obtain funding from outside equity firms. The sponsoring organization then sells the tax credits to the equity companies, making the equity companies eligible for tax credits each year for 10 years.

The tax credits lower the overall cost of building a project, making the apartments more affordable.

The tax-credit program does have some critics. The Cato Institute, a libertarian think tank, opposes it and says on its website, “The low-income housing tax-credit program provides large subsidies to developers and few, if any, benefits to low-income families.”