What the Devil won't tell you
Tucson needs a lot more than ending housing discrimination to address rising rents
Rents are going up fast in Tucson. But why does a homeowner care?
What's bad for the tenants could hit the rest of Southern Arizona hard. If renters paying $700 per month in 2021 are paying $1,200 in 2023, that's $500 per month disappearing from the rest of the economy.
Also, Arizona traditionally needs population growth for the economy to grow. The state's population growth slowed for a good portion of the 2010s and so did our economy. One of Arizona's selling points has been it has reasonable costs. However, if average rents start to break $1,500 on the way to $2,000, then we're Tax-a-Chussets but with starving schools.
And finally, Tucsonans will witness more homeless folks on the street — and God knows that bugs people (trust me, it bugs people who need roofs over their heads more). Renters who live in what property managers refer to as decent "B properties" are going to start displacing renters in less desirable "C properties," who suddenly are in no properties at all.
It's OK, the Tucson City Council is on it. Council members have scheduled a vote on Sept. 27 to prohibit landlords from discriminating against people who have federal housing vouchers.
That's all good and well, but fixing the affordability crunch is going to take a lot more work than that. This isn't one of those "let's-say-we've-done something-about-it" issues. It requires an all-guns-blazing attack before those rents destroy discretionary budgets across the community.
Courtney Levinus, the president of the Arizona Multi-housing Association (that'd be the landlord lobby, folks), yanks at the roots of the problem, when she points out cities, towns and counties have failed to see the problem coming.
"They've been really hesitant to adequately plan for their population growth," Levinus told me in an interview. "Arizona is going to keep growing. Business is going to keep moving here. People are going to keep moving here."
Bingo. Readers won't catch me standing up for landlords a whole bunch, but in this case the rent explosion was a freight train rolling down the tracks and blaring its horn.
It's rare that everything you need to know about a subject can be reduced to a single statistic. Tucson's housing affordability crisis has such a number. The 2010s were the worst decade for new housing construction since the city started tracking. Just 2.5 percent of housing stock was built between 2010 and 2019. By comparison, 21 percent was built during the 1970s, another 16.4 percent was built during the '80s, 13.3 during the '90s and 12.2 percent during the 2000s.
Home construction fell off a cliff. This is a supply and demand issue. Pima County did a study that found the area needs 75,000 low-income units built by 2028.
In other words, just to meet the needs of the community someone needs to build 750, 100-unit apartment comlpexes in eight years. Let me cut to the chase. That ain't going to be the Primavera Foundation. They do good work fighting homelessness but they aren't developers.
Developers didn't want to build in the aftermath of the mortgage earthquake's devastation of home values.
By the way, according to a report by accounting firm Stessa, builders added to the Arizona's overall stock by 9.5 percent – ranking 11th nationally. So, Tucson experienced an acute fall-off in construction.
Community leadership should have seen this slowdown happening and said, "Oh wow, we're gonna have problems later."
Now everyone is playing catch-up.
Let's talk about what some Council members will find gross. They're going to have to work with and even cater to developers.
For years the dividing line between right and left in Tucson was growth management versus growth boosterism. Activists and Democrats were on one side and developers sided with Republicans.
Greedy business types are a big part of the answer. That they belong to the wrong party is not a good enough reason for voters to suffer.
Bring them to the table. The county's housing council is overloaded with social service organizations and underrepresented by the people who are actually going to fix the problem.
The crisis doesn't necessarily mean Tucson or Pima County must give up any standards. Most of the regulatory problems developers face involves time, Levinus said.
Projects that used to take 18 months from the drawing board to ground-breaking can now take up to four years, said Levinus.
Section 8 doesn't make em crazy
The U.S. Department of Housing and Urban Development's Section 8 program was supposed to be the cure for the social ills surrounding government housing projects. Don't build low-income earners homes, just give renters a federal voucher to use in the private market.
Increasingly, the private market isn't accepting these vouchers, said Liz Morales, the city's housing director.
"Most of the landlords we talk to say, 'We are not renewing the lease, we don’t want to work with section 8,'" Morales said.
Tucson has a waiting list of 600 families who have the housing voucher but can't find a landlord willing to accept them. The waiting list has been closed and is about to open up again and the city is preparing for what Morales predicts are going to be "pretty staggering numbers."
No, we can not have homeless camps full of people with Section 8 vouchers in their pockets.
But if people aren't taking the voucher, then what's the point of opening up the waiting list?
A point about Section 8: People on it pay 30 percent of their housing on rent but the government picks up the rest of the tab. These aren't people without steady incomes. They are people with steady incomes that aren't enough to afford rents. They aren't drugged-out child molesters. They are the cashier at the convenience store or dishwasher in the restaurant (and anyone who thinks dishwashers don't know the value of work should try the job for an hour. We won't even make 'em give it a shot during a Sunday brunch).
Also, they must comply with the lease. They can be evicted just like anyone else and then they can be kicked out of the program.
In fact, people know about Los Angeles' homeless problem. But 19 percent of the homeless were employed the quarter they started receiving community assistance and another 18 percent were employed within 12 months of getting help.
Shockers: Losing a job is bad for your prospects of remaining housed. Not having an address makes employment difficult to find. And landlords don't like taking people with evictions on their record. It can be a deal-breaker and leave homeless people largely without a private sector solution to their problems. The market intentionally doesn't want to fix it.
A landlord's market
Tucson's planned anti-discrimination measure is good and well-meaning but doesn't even solve the Section 8 problem.
All it does is tell landlords they can't categorically refuse voucher holders. However, it does allow landlords to refuse housing to individuals. It's like "I didn't fail to hire you because you were African-American. I just hired the white guy because he was a better fit."
And this is a landlord's market.
Kim Fitch, the owner of property management firm Nicolesi and Fitch, does take Section 8 voucher holders. Morales describes her as one of the good landlords in town who works to do the right thing. I can vouch having lived in a community Fitch managed — she runs a good ship.
So don't get mad at her when she points out that the name of the game in renting is maximizing property revenue. She works for property owners who want that return maximized.
The 1,800 units her team manages are 98 percent occupied and when including the number that are either full or pre-leased that figure goes to 99 percent.
And that's with rent increases. Raise the rent. People still move in.
Now, Fitch and others in her field do require new tenants to prove they can afford to move in but tenants already living there don't need to prove they can afford the increase (affordability as defined by rent equaling 30 to 40 percent of income or less).
"We are looking at what the market can bear," she said. "Forcing someone to take Section 8 isn't going to fix the problem."
Rents are going to go up anyway and property managers wouldn't be required to keep rents artificially low, Fitch said.
"Liz has been very clear," Fitch said. "We are not asking you to lower your rent."
Good. Landlords have an incentive to stick with the federal program. On the other hand, the program won't do a thing about rents.
Affordability isn't a landlord problem. It's a supply problem. This is especially true living under a Legislature that has outlawed local governments imposing limits on rent increases.
Fitch credits Morales with fixing a lot of the bureaucratic messes that had been associated with the Section 8 program.
Basically, there's more paperwork that goes along with voucher holders and the feds require the dwelling unit be up to snuff so an inspection is required.
The government allows renters to choose a property with rents up to 120 percent of Tucson's median.
But the 120 percent allowance is only for one year, so tenants and property managers could be facing difficult choices in 2023.
So what are the solutions?
I have mocked it in the past but the Tucson Housing Affordability Strategies plan has 10 broad strategies with multiple tactics beneath them. All of them make sense. Replicate incentives handed out along parts of town like the Sunshine Mile, the Grant Road Corridor and the area around North Oracle Road. There's renovating existing stock. The city could and create zoning incentives and draw a tight bead on those most at-risk.
My favorite heading is "Facilitate Development by Reducing Costs and through Innovation." I've been wondering what "innovation" means. There's a county plan using the same term.
D'uh. Innovation is how staffers sell "deregulation" to progressives politicians running the city and county.
The city now offers a subsidy on impacts fees for affordable housing projects but only if they are built by nonprofits. Tucson needs private development. Wave impact fees for builders who expect to turn a profit.
Even some luxury apartments will help address affordability. Some more A properties will free up the B properties, reducing the pressure on C properties.
NIMBYs be damned
Also, the city may have to do the one thing it hates: Anger neighborhoods. Yeah, rental units are going to have to be built in your back yard. Tucsonans live in a city of nearly a half million and a metro of 1 million. They need to get the idea that this mega pueblo stopped being a bucolic small town back around 1954.
The city's affordable housing plan was put together by the SPACE Team, which stands for strategic planning and community engagement. Community engagement can be useful to gauge how much affordable housing a neighborhood can withstand without getting the vapors, but not if it should be built around them at all.
More of Tucson is going to have to look like North Tyndall Avenue just south of Speedway, with dense development that goes up and not out. Developments like Hub on Park Avenue and Aspire Tucson have changed the the neighborhood west of the University of Arizona. Not just students need a place to live.
And that might mean proactively "upzoning" (increasing the density of development allowed on a site).
It's how Tucson stops sprawl and increases affordability because high-density development costs less to build. Building up and not out is also how Tucson fights climate change by creating shorter vehicle trips or eliminating the need for them altogether with mixed use developments.
Oh my God, higher densities, playing nice with developers and walking. What kind of post-apocalyptic Fury Road am I describing?
One state over, the California Legislature has taken some power from local zoning authority to build residential units. The Arizona Legislature is talking about something similar. Who thinks Arizona lawmakers are to the left of California's?
If cities and counties want to stay in the game, they had better act fast.
No slow go
The Section 8 plan was something the Council asked the staff to pursue back last December when presented with a strategic plan.
Nine months later, they'll will get an ordinance.
For climate and affordability, the City Council can't just hear one easy-sounding idea and latch onto it to say they've done something.
Morales handed them a bunch of ideas.
I would suggest doing 10 things, doing them fast and as part of a series of votes during a single meeting, so the city blasts it out to the world: Tucson is open for residential development.
Don't just enact them one at a time and a year at a time or Tucson's low-income earners will be commuting in from Pinal County by the end of the decade.
Residential development has slowed as the Tucson area approached and broke a million population.
So dramatically increasing the number of places to live is just playing catch up.
I'm the first to admit there's a lot more to this issue I haven't touch on but that just shows how involved the issue truly is.
Ending discrimination on Section 8 is fine, but without a whole bunch more it's just changing scenery during a forest fire.
Blake Morlock is an award-winning columnist who worked in daily journalism for nearly 20 years and is the former communications director for the Pima County Democratic Party. Now he’s telling you things that the Devil won’t.