Scottsdale City Council will convene a working group to explore solutions to address affordable housing issues in the community.
Council voted unanimously to support a motion by Councilwoman Linda Milhaven for a formal discussion about a group on Aug. 24.
Scottsdale, like many other Valley cities, is facing a shortage of affordable housing options as housing prices and rents skyrocket.
Over the past two years, the median sale price of Scottsdale home has risen 35 percent to $798,350, according to the Cromford Report, a Valley real estate market report.
The median sales price in the historically affordable 85257 zip code grew even faster, rising 73 percent to $485,000 during the same span.
At the same time, rents are also on the rise.
According to Apartment List, Scottsdale rents increased by 21.2 percent over the past 12 months – far outpacing the 18.9 percent state average and 8.4 percent average nationwide.
The median cost for a two-bedroom apartment in Scottsdale is now $1,750 – the highest mark among large Valley cities.
Homelessness is also on the rise in the city.
Scottsdale’s annual Point-in-Time count found the number of homeless people contacted in the city increased from 50 in 2017 to 102 people in 2020.
The booming market has caused concern for some in the community who are worried that moderate and low-income families and elderly residents on fixed incomes will be priced out by the increase in housing costs.
Council has discussed those issues sporadically in recent months and voted 6-1 in June to include up to $10 million for affordable housing solutions in the city’s new budget, though it is still unclear exactly where the money will come from or how it will be spent.
Mayor David Ortega suggested the city could pull the funds from the city’s $29-million allocation of federal pandemic relief but said the city was still awaiting guidance on exactly how it could spend that money.
Milhaven was the only Councilmember to vote against the $10 million allocation due to concerns that the funding source was not explicitly spelled out.
She also has suggested that Council needs to define the issues it wants to address because “affordable housing” could cover a broad swath of problems, from shelters for the homeless to increasing the city’s supply of workforce housing.
“There’s a lot of confusion around it – is it workforce housing, is it affordable housing, is it housing the homeless?” Milhaven said.
Once the goals are set, the city can have a community dialogue on spending the $10 million, she said.
The new working group will likely feature a broad representation of residents, industry experts and Council members. Milhaven said she would like to see the development community represented “to bring some expertise to the table to help us understand what are our options are.”
“Folks like to talk about affordable housing, but there are things we can and cannot do,” she said. Noting state law now forbids municipalities from requiring developers to devote part of their units toward affordable housing.
Joanna Carr, research and policy director for the Arizona Housing Coalition, told the Progress that Arizona is one of three states to ban so-called inclusionary zoning.
“It’s a real challenge, because then the cities have to incentivize developers to include affordable units, and why would they if they don’t have to?” Carr said.
Milhaven said the work by the short-term rental group inspired her to request the new group to address housing issues.
She acknowledged that the affordable housing shortage – which is a problem nationwide – will likely be more complicated than the short-term rental issue.
But she hopes the same dynamic – residents, industry experts and the city working together – will bear similar, positive results.
“That was the key lesson – just bringing a bunch of people together to talk about it gave us some options we didn’t know we had,” Milhaven said.