State Housing Director Sees Robust Interest From Affordable Housing Developers

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State and federal funding has been approved for nine housing projects which are expected to create nearly 1,200 affordable housing units across Arizona, according to Tom Simplot, the state’s top housing official.

Simplot said back in October that the state’s recent rapid growth has outpaced its housing supply, leading to a lack of affordable housing which particularly impacts low-income families in non-urban areas. At the time, tens of thousands of additional housing units are needed across the state to address the deficiency, which Simplot admitted “has presented us with a serious challenge.”

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Since then, Simplot has engaged in a proactive outreach strategy to ensure developers are aware of a Notice of Funding Availability (NOFA) for $24.5 million in state and federal funding, up to $2 million per affordable housing project. The funding is estimated to help bring up to 1,500 new units to Arizona in the next several years, Simplot noted.

The result can be seen in the numbers Simplot recently shared with Arizona Daily Independent.

“With 9 applications and $17 million committed, the NOFA is succeeding in encouraging more affordable housing development in Arizona,” said Simplot, who took over as the state’s top housing official in May 2021. “The success can be partially attributed to the fact that we opened this NOFA to both nonprofit and for profit developers.”

Those nine projects alone are expected to create nearly 1,200 affordable housing units in the state. All but 180 units would be in Maricopa and Pima counties, according to ADOH.

Simplot understands there are challenges in getting developers to build in rural areas where there are already fewer affordable housing options. That is why ADOH encourages urban developers to partner with their county and city to see if funding resources are available through the American Rescue Plan Act.

“This leaves ADOH with more of its available resources for the balance of the state,” he explained.

ADOH is also making sure potential developers in Arizona’s more rural areas are aware Ducey signed legislation last year creating the state’s low-income housing tax credit (LIHTC) program. The program encourages the building of affordable housing by providing up to $1 million in state LIHTC credits to developers who have been awarded either a four percent or a nine percent federal LIHTC.

Simplot added that a minimum of three of those projects will be funded in rural communities utilizing the nine percent federal LIHTC. The scoring system will include points for projects in zip codes that have not been served through LIHTC in recent years.

“ADOH analysis suggests that the new state LIHTC program could spur as much as $160 million in new affordable housing development in Arizona,” Simplot noted. “And we will continue to look for additional funding sources to increase the amount of affordable housing in Arizona.”

Simplot’s executive team meets with housing stakeholders around the state on an ongoing basis, which he says has brought together hundreds of individuals to share ideas, challenges, and recommendations.

“The meetings inform us about where best to invest our resources to open the pipeline of new housing throughout Arizona, especially in the non-urban areas,” Simplot said.

Additional  information about Arizona Department of Housing funding options is available at www.azhousing.gov