Title
Affordable Housing and Housing Phoenix Plan Follow-Up
Description
This report provides the Economic Development and Equity Subcommittee additional information on Housing Phoenix Plan efforts, Planning and Development Zoning Ordinance text amendments, and Housing Choice Voucher Landlord Incentive Program updates.
THIS ITEM IS FOR DISCUSSION AND POSSIBLE ACTION.
Report
Summary
This item is a follow-up to the Feb. 22, 2023, Subcommittee meeting in which the Housing Department provided an update on the Housing Phoenix Plan.
City Council approved the Housing Phoenix Plan (HPP) on June 16, 2020. The Plan set out a goal of creating or preserving 50,000 units by 2030 through the implementation of nine policy initiatives.
In addition to the nine policy initiatives, the HPP included a needs assessment and housing gap analysis. Based on 2019 data, the HPP detailed that an additional 163,067 housing units, 99,581 of which needed some sort of subsidy, were needed to adequately house the City’s current population. Housing staff will undertake an updated needs assessment and gap analysis in 2023. The phased study will assess existing housing stock in addition to forecasting future housing needs. The first phase of the study, analysis of existing conditions, will commence this spring. A second phase, determining future housing needs, will follow in the summer. The result of this effort will allow staff to develop revised metrics, evaluate potential housing goals and help inform future program and policy recommendations.
Initiative 2 of the Plan proposes amending the Phoenix Zoning Ordinance to facilitate more housing options. The Planning and Development Department (PDD) has initiated several text amendments that address expanding housing options and providing affordable housing incentives. Three of the text amendments are regarding mobile homes. The proposed amendments will address standards for non-conforming mobile home parks, modernize standards for new mobile home parks and establish an incentive framework for preservation of existing mobile homes. In addition to the mobile home focused text amendments, PDD has also initiated four other text amendments consistent with Initiative 2. These amendments include the expansion of allowances for accessory dwelling units, modification of standards to promote a greater variety of housing types, establishment of an incentive framework for affordable housing, and a reduction of parking requirements for affordable housing. The PDD team is commencing with stakeholder outreach on the mobile home focused text amendments this spring with the goal of bringing two of the three text amendments to the City Council for action in July. The PDD team is preparing language for the four other Initiative 2 text amendments and will begin vetting the language with stakeholders and the village planning committees throughout the spring. PDD is finalizing a schedule for these text amendments and is looking to have at least one text amendment come before the City Council in July with the others to follow in the fall.
Initiative 7 of the Plan is designed to expand efforts to preserve existing affordable housing stock, including implementation of landlord incentives and resources. The Housing Department launched a Landlord Incentive Program in October 2020 as an innovative strategy to help combat the shrinking number of units and fewer affordable housing opportunities for Phoenix Section 8 Housing Choice Voucher (HCV) holders. Since the program’s inception, over $2.6 million in incentive funds have been disbursed to property owners, successfully executing over 2,400 Housing Assistance Payment (HAP) contracts equating to secured housing for voucher holders in Phoenix. The one-time, $2,000 incentive payment program has helped to attract landlords. Currently, we have 2,000 landlords of which 350 are new first-time landlords to the HCV program.
As the Public Housing Authority (PHA) for Phoenix, the City’s Housing Department has over 6,200 voucher holders currently leased in the HCV program of the 7,355 vouchers allocated to Phoenix. In 2022, the voucher success rate, defined as the percentage of all households provided vouchers who lease a housing unit, was 56 percent, and the average amount of days from voucher issuance to lease up was 114 days.
Given the increasing rents, low vacancy rates, and limited housing stock in the Phoenix market, the Housing Department employs the following strategies to increase the voucher lease-up success rate:
- Landlord Incentive Program - First implemented in 2020, the Landlord Incentive Program has disbursed over 2,400 incentives to landlords that have leased a unit to a voucher holder.
- Voucher Issuance of 180 Days - The U.S. Department of Housing and Urban Development (HUD) requires Public Housing Authorities to make a voucher available to families to search for a unit for a minimum of 60 days. Over the years, the Housing Department has extended the search time from the required 60 days, to 120 days, to the current 180 days to allow families more time to search for and secure housing.
- Increased Payment Standards - The department adopted payment standards at 120 percent of the 2023 Fair Market Rents, published annually by HUD, which significantly increased the amount of housing assistance paid on behalf of a participant. Compared to 2022 payment standards, this represents an average of over a 50% increase.
- Landlord Engagement - The department hosts biannual Landlord Open House events to engage with and educate Phoenix-area property owners on the benefits of participating in the Housing Choice Voucher program. A dedicated landlord liaison leads additional ongoing targeted efforts to strengthen relationships and recruit more property owners for the program.
- Streamlining with Technology - The department sends the required Housing Assistance Payment (HAP) contracts electronically requesting a landlord’s electronic signature, which has decreased the turnaround time for contract execution from weeks or months to just days. Additionally, Landlords are also receiving rent payments faster and more securely as they can opt in to receive Automated Clearing House (ACH) payments instead of paper checks. Enrollment by landlords in ACH has increased over the last few years from 27 percent to currently more than 98 percent.
On May 1, 2023, the Mayor and City Council approved an amendment to Chapter 18 of the Phoenix City Code, which prohibits housing discrimination based on a renter or buyer’s source of income.
Recommendations to increase the voucher success rate include the following:
- Increasing Landlord Incentive - Increasing the Landlord Incentive Program can further incentivize landlords to rent to voucher holders. Options to increase the incentive payment utilizing the remaining funds include $2,500, $3,000, and $3,500 per new HAP contract, as illustrated on Attachment A.
- Housing Navigators - Housing Navigators can assist with identifying, applying for, leasing and moving into units. HUD does not provide PHAs dedicated funds for housing navigation support for HCV program participants. Therefore, if this item is adopted, a funding source will need to be identified.
Financial Impact
The Landlord Incentive Program was initially funded by federal CARES Act funding and City Council approved federal American Rescue Plan Act (ARPA) funds.
Concurrence/Previous Council Action
- On June 16, 2020, the City Council approved the HPP.
- On Aug. 28, 2020, the City Council approved $500,000 of federal CARES Act funding for the Landlord Incentive Program.
- On Sept. 7, 2021, City Council approved $1 million of City-allocated ARPA funding for the Landlord Incentive Program.
- On June 7, 2022, City Council approved an additional $4 million of City-allocated ARPA funding for the Landlord Incentive Program.
Department
Responsible Department
This item is submitted by Deputy City Managers Gina Montes and Alan Stephenson and the Housing and Planning and Development departments.