Phoenix City Councilman Sal DiCiccio is questioning the role of the City of Phoenix in the development of City built affordable housing. DiCiccio told taxpayers this week that he believes it is “anything but affordable for taxpayers.
DiCiccio is charging the City with profiting off of the poor as well.
“The goal of the program has always been to provide housing for those who are in need. Through the years, however, it became a way to take money from those in need and stripping taxpayers of hard earned monies,” wrote DiCiccio in a newsletter to constituents.
DiCiccio offers as an example the City of Phoenix affordable housing project on 24th Street and Van Buren. The City is the developer on that project which is being built on land it owns for $281,000 a unit. According to DiCiccio, across from the Biltmore, the most expensive luxury apartment complex ever sold in the private sector was located at 26th Street and Camelback Road for $277,000 a unit.
DiCiccio says that the City’s project will cost taxpayers about $32 million.
“The private sector could easily have built double the units for those in need at a cost of less than half what it cost Phoenix taxpayers, if built without government assistance,” but “Phoenix insisted on being the developer of the project,” writes DiCiccio.
He claims that although non-profit and private companies can produce more affordable housing units, they have to compete with the city for federal affordable housing funding because Phoenix gets a “Developer Fee.” That fee can be as high as 14 percent, and the City’s “large bureaucracy lives off of these federal dollars.” That greed prevents the potential development of at least 50 percent more affordable housing units built by the private sector for the same amount of money than the city will spend.
“There is an additional 10 percent of the funding that is dedicated to supportive services that help lower income residents. This represents millions that should go to our non-profit organizations and tribal entities, but has instead been diverted to a city bureaucracy that has an average cost per employee of over $109,000 per person,” writes DiCiccio.
DiCiccio calls it a “Reverse Robin Hood scheme” in which the city is taking from the poor” to give to the government.
“Both the taxpayer and the poor must be protected,” argues DiCicco, who is demanding that Phoenix and other governments end the practice of profiting on the poor.
DiCiccio offers two remedies:
1. The state project selection priorities must be aligned to get more of the affordable housing funding to those who need it the most. The changes should include awarding the funding to non-profit or private organizations and requiring that support services be provided by non-profit or tribal entities.
2. The role of government must be reduced and the role of non-profits must be expanded. More affordable housing units and support services should be going to low income residents.