The developer behind a new apartment building planned near downtown Scottsdale is asking the city to approve increased heights and density in exchange for “attainable” housing in an area that has seen rental rates rise substantially in recent years.
The Miller, a proposed 148-unit residential building, would be located east of downtown Scottsdale on the northwest corner of Miller Road and 6th Avenue on the site of the restaurant building that has been vacant since Sweet Home Chicago closed in 2019.
Under current commercial zoning, the property owner can construct a building up to 36 feet tall.
According to plans submitted to the city, Pennsylvania-based Toll Brothers wants the site rezoned to downtown multiple use and utilize special improvement bonuses to increase the maximum height of 76 feet.
Toll Brothers would also like to use the bonuses to increase density to allow for 148 units, above the 85 units allowed under the requested zoning without bonuses.
The city allows developers to request increased height and density bonuses in limited parts of Scottsdale if the developer provides any number of public benefits specified in the city code.
One benefit is workforce housing, though developers have not typically utilized that option in the past.
Toll Brothers has proposed reserving a portion of units in The Miller for attainable housing for the city’s skilled workforce.
According to the zoning application filed with the city, that means the units will feature “below market rate rent for the skilled workforce (ie: police/fire, medical, education) with hopes of laying the groundwork for future attainable residential developments in Scottsdale.”
In a statement provided by John Berry, the zoning attorney representing the project, Toll Brothers said it anticipated dedicating 9 percent of the units in the building for attainable housing.
The Miller proposal comes as the city is confronting a growing shortage of affordable housing.
Thousands of apartment units have been built in the city in recent years – with thousands more in the pipeline – but the lion’s share of that new crop are in high-end or luxury complexes.
Meanwhile, rents continue to rise across the city.
Between 2015 and 2019, gross median rents in Scottsdale jumped 29 percent from $1,143 to $1,471. That outpaced growth across Maricopa County, where the median rent went up 21 percent from $986 to $1,193, according to U.S. Census data.
The 85251 ZIP code, where the new project would be located, had rents in line with the countywide median at $985 in 2015, but rents in that ZIP code grew 23 percent through 2019, outpacing the countywide numbers.
In February, Scottsdale Human Services Director Greg Bestgen told Council the entire Phoenix metro is short on affordable housing as limited stock is redeveloped and few new affordable projects are built to replace it.
“Scottsdale has become increasingly unaffordable to many of the workers who support the community, and insufficient housing for workers puts at risk the economic sustainability of our local community,” Bestgen said.
Bestgen told Council the city is investigating ways to address the issue, including partnering with private landlords and developers to increase the number of units available to low- and moderate-income residents.
The Miller proposal – which is still in the early stages of city review – does not define what “attainable” means beyond stating it would be below market rate.
Toll House said it “is still working through the details” on what its rents will be.
According to Toll Brothers, it is the first time a developer has offered attainable housing in exchange for height and density bonuses.
The company said it hoped the project would serve to generate additional traffic to nearby businesses, such as the Sprouts-anchored shopping Center.
“The Miller literally brings new customers to their front doors,” according to the statement. “That’s why the shopping center and area small businesses support the proposal.”
“Historically, this shopping center has produced a chunk of sales tax revenue to fund Scottsdale police, fire, parks and general operations. We want to help keep it that way.”
According to the rezoning application, the developer will need to contribute the equivalent of $994,915 to achieve the height and density bonuses it is requesting – meaning the attainable housing is unlikely to be offered in perpetuity at The Miller.
“We are still working through those numbers but are hopeful that the attainable housing program will last for approximately a decade, if not more,” according to the statement from the developer.