OUTING INFILL

PHOENIX'S INFILL HOUSING PROGRAM IS SUPPOSED TO ENCOURAGE RESIDENTIAL DEVELOPMENT IN THE CITY CORE WHILE CURBING URBAN SPRAWL. BUT WHEN IT SUBSIDIZES LUXURY HOMES IN EXCLUSIVE NEIGHBORHOODS, THE PROGRAM FILLS THE WALLETS OF BUILDERS

Quail race across a secluded Phoenix street where Gretchen Freeman and her husband will soon break ground on a new home. Their future backyard affords a view of Camelback Mountain's Praying Monk. Neighboring houses sprawl across roomy, desert-landscaped lots.

Home prices in this development, Biltmore Alta Vista Park, start at about half a million dollars. You'll pay more if you want to live in a home designed by Frank Lloyd Wright or Will Bruder. Freeman has hired Tod Williams and Billie Tsien, the architects who designed the new Phoenix Art Museum.

Judging from the home construction under way nearby, people are eager to live in this part of town.

Now there's another incentive to move into the neighborhood: government subsidies.

Last March, Mayor Skip Rimsza and the Phoenix City Council unanimously approved the Infill Housing Program, a $100,000 pilot project designed to promote inner-city development. The program waives fees on building, fence, water and sewer permits to those who build new homes in central Phoenix neighborhoods that are 20 years old or older. The waivers average $2,000 per home, with larger homes getting larger waivers. The builders also are treated to an expedited city review process.

But the Infill Housing Program isn't doing much for the "inner city." Nearly a quarter of the city--about 120 square miles--qualifies for infill subsidies. The program's boundaries stretch to 43rd Avenue, 64th Street, South Mountain and Cactus Road.

There is no cap on the expense of qualifying homes, or on the amount of waivers a home can receive. In the past six months, Phoenix taxpayers have subsidized home construction in tony areas like Arcadia, Squaw Peak and North Central Avenue.

And in Gretchen Freeman's neighborhood. She already had decided to build in Biltmore Alta Vista Park when she read about the infill program in the daily newspaper. She applied and was accepted. Her fee waiver comes to about $2,800.

So when the dust from building her 4,700-square-foot home settles, Freeman and her family will move into government-subsidized housing, designed by New York architects.

Last fall, Skip Rimsza stood on an empty lot in the warehouse district of downtown Phoenix and campaigned for mayor with the promise that he'd promote infill.

The concept is simple: Build houses and businesses on vacant land in the center of town, and you'll revive dying neighborhoods, increase the city's tax base and discourage urban sprawl at the city's boundaries. Now Rimsza's seeking reelection--although few voters seem aware there's an election October 3--and infill is one of the issues he's touting. Rimsza fancies himself a visionary. He intends to leave his mark with infill, the way Terry Goddard did with his vision for a vibrant downtown cultural community--$1 billion in bonds that engendered a new city hall, waste management plant, library and science museum.

John Meunier, dean of the College of Architecture and Environmental Design at Arizona State University, agrees that with new cultural amenities in place, housing is the next step. He says no downtown is revitalized until people live there.

But Meunier says the city is not doing enough.
"Everything now is completely market-driven, to the point where talking about it any other way is almost heresy," Meunier says. ". . . The fact is that without significant pump-priming, we are going to be faced with exactly the same thing that every other American city has been faced with, which is the continuing decline of the inner city."
Rimsza has gotten a lot of political mileage out of his infill shtick, taking credit for the $5 million in construction the program has abetted.

In a guest column in the September 17 Arizona Republic, Rimsza suggests infill can cure everything but dandruff. He writes glowingly of the city's "real, honest-to-goodness infill program to encourage development in older, established neighborhoods." He opines that infill will improve schools, transit opportunities and, curiously, "offer job opportunities to our central city kids."

"Infill is that important," Rimsza declares. "I've made it a priority. I've led the charge."
But the pilot Infill Housing Program--Rimsza's first stab at promoting infill--couldn't help but succeed, at least on paper. It's a no-risk, low-cost, feel-good program that offers waivers to people who were--for the most part--already planning to build within its boundaries. Few of them actually need government help, which means that city subsidies in many cases merely add to builders' profits.

In fact, many builders who have taken advantage of the infill subsidies tell New Times that the program had no bearing on their decision to build.

Mark Stapp, who will receive subsidies for the 22 houses he's building at Mitchell Place, a development at Third Street and Osborn, says, "I'm not a fool. I mean, I'll take [money] if it's given to us. But I think it's fair to say that the Infill Housing Program had no effect on developability, feasibility or success of this project at all."

Stapp's homes are in a low-income area, as are about a dozen homes being built in South Phoenix. There are bigger projects in the works, as well. Sunbelt Holdings is planning a 1,000-home, gated development at 32nd Street and Baseline. Heard Ranch, as it's called, would feature homes costing more than $100,000. Because of its location, the development qualifies for the city's infill program; but because of its size, the city council will ultimately decide.

To promote building in low-income areas, the city waives requirements that an infill home be in a neighborhood 20 years old or older for areas near the poverty line.

But that hasn't done much to promote building in such areas.
Many others aren't.
As of August 31, the city had issued 32 permits; new applications are received almost daily. Most of the homes are priced at $80,000 and up.

Some of the other projects that have qualified for or are awaiting approval for infill subsidies include:

ù Four homes along or near Central Avenue, between Camelback Road and Glendale Avenue.

ù Five homes in Lincoln Vistas, north of Lincoln Drive around 20th Street, in the shadow of Squaw Peak. The units are priced at about $320,000.

ù Two homes at Arcadia Estates, a 41-home subdivision being built by Cameron Homes at 48th Street and Lafayette Boulevard in the Arcadia neighborhood. The homes in the development sell for about $400,000 and come with options such as a garden spa bath, media room and as many as four bathrooms.

Chris Moore, construction coordinator for Cameron Homes, says the builder intends to apply for waivers for a total of 37 homes in the subdivision.

Moore says he wasn't surprised to learn Arcadia Estates homes had qualified for the government subsidy. "Really, there was no reason for them not to give it to us because we did qualify under all the terms and conditions of the program," he says.

He says Cameron's project was already in the works when the Infill Housing Program was conceived, but the company still intends to take advantage of it.

Critics say the infill map is far too broad and the subsidies far too small to encourage building where it's needed--downtown.

Furthermore, they say, requirements of the program--that houses be built with air conditioning, block fences, one and three-quarter baths, a two-car garage--discourage building in depressed neighborhoods, where, lacking larger subsidies, residents can't afford such amenities.

"Some consumers will be left out of this package of benefits. There's just no doubt about it," Rimsza admits. He's quick to observe that his pilot program is just one of the many ways the city is promoting infill, insisting that the Infill Housing Program never was intended to focus on decaying inner-city neighborhoods or "affordable housing." It was meant to promote growth where the market supports it. Bill Cleverley recalls otherwise. The owner of Monterey Homes was one of 60 people interviewed by city planners last year when they were drafting the Infill Housing Program. Cleverley's been building homes and apartments in the Valley for 15 years; two years ago he built 36 homes near Central Avenue, between Northern and Glendale. He's shocked to hear that the final infill map approved by the council encompasses that area; his $350,000 homes sold out in about a year--without subsidies.

Cleverley says, "Initially, the true thrust of [the city's] infill housing incentive program was designed for the classic infill--you know, like central parts of Phoenix that are pretty depressed and old . . ."

But that thrust changed. "Central Avenue and Northern is hardly an economically disadvantaged area," Cleverley notes. R.L. Brown, publisher of The Phoenix Housing Market Letter and longtime observer of real estate trends, is also confused. "The north central corridor has had a series--a long series--of infill activity that has gone on for at least a decade or more," he says. "It's a desirable area which builders--if they can acquire property and go through the process on their own--are usually willing to do. But that's not really my understanding of the thrust of the city's major interest--it's to develop more toward the core of the city, and those properties south of the downtown area."

Cleverley says he told city staff, "Look, who is going to go down there and buy a house? It's crime-ridden, the schools are a problem, you've got drugs, I mean--a $2,000 incentive? You'd have to spend that much on security bars in your house."

He says the program was originally supposed to target blighted neighborhoods, and concludes, "I guess the maps started to expand into other areas. Of course, the dynamics behind that are all political." Councilmember Cody Williams admits that the map grew. He says, "There certainly were some requests [from councilmembers]--'What about this area, what about that area?' I literally had to create an argument that that area just north of South Mountain ought to be an infill area."

None of this surprises Holly O'Brien, president of the Neighborhood Coalition of Greater Phoenix.

"When I hear 'infill project,' it makes me shake in my boots," O'Brien says, "because we've been hearing about it for years but we just keep going the other way."

In more than two decades with the city's Planning Department, assistant director Joy Mee has seen attempts at infill housing come and go. "It's been quite a range. And the range of projects and the range of success have been about the same," she says.

At the high end of the success meter is Renaissance Place, a gated luxury condominium community on Seventh Street north of Washington. The city offered construction financing assistance and reduced the cost of the land significantly, Mee says. St. Croix, a condominium complex at Fifth Street and Fillmore, wasn't as successful. Initially, the condos didn't sell, Mee says. They were converted to apartments--and were quite popular--and are now switching back to condos.

At the low end is a smattering of fourplexes built in neighborhoods throughout central Phoenix in the mid-1980s. In many cases, the structures are so ugly and poorly constructed that they blemished already bad neighborhoods.

"It wasn't all our fault, but we can take some blame for that," Mee says. The units weren't subjected to the city's code screening process (that process has now been changed) and were built as tax shelters.

She adds, "The product that was built lacked amenities and they were run by out-of-town landlords and they quickly deteriorated." Today, the city has designated five neighborhood initiative areas, using federal funds to condemn buildings, promote neighborhood involvement and eventually create infill housing. Mee says the city is also involved in a project at Third Street and Fillmore--a rough part of town near the Arizona Center--where a developer is considering building apartments. The city may donate all or part of the land, she says.

Michael Dollin--an urban designer and landscape architect who lived and worked in the Encanto neighborhood for many years--believes Phoenix needs a "much stronger, well-articulated program" to promote infill. Yes, he says, there's construction, but "nothing like what we ought to be having, given the real estate boom we're having."

Reed Krolof, associate editor of Architecture magazine in Washington, D.C., and former associate dean at ASU College of Architecture and Environmental Design, says, "It is crucial for infill to work if Phoenix is to transform itself into a first-class city, because it is not a first-class city now. And I think everybody knows that."

Cathie Yankovich loves living in the Roosevelt neighborhood, although she wishes she could fix up the outside of her house. She doesn't dare. "If you paint your house, you are a target for crime," she says by way of apologizing for the paint peeling from her big old house on Portland Street.

Roosevelt, bordered by Central and Seventh avenues and McDowell Road and Fillmore Street, was the first neighborhood in the city to be designated a national historic district. Some of the blocks have been fixed up; on others, houses are boarded up, and lots are filled with trash and transients.

Yankovich is a computer programmer, although that's just a day job--she's also an artist. She has long brown hair pulled back with a concoction of beads and macram‚. She's been a neighborhood activist for years, although not so much recently, and she hasn't even heard of Rimsza's pilot infill project. No one's applied to build any homes in Roosevelt through the project, although infill is certainly needed in the area. Years ago, Yankovich lived on Sixth Avenue near Roosevelt Street, in the garage of a duplex building. The garage is gone now, the duplex boarded up, and the adjacent lot is full of broken glass. "One of the neat things about being downtown is that whether you like your neighbors or not, you know them," Yankovich says. When empty lots exist, "the neighborhood starts being disjointed. . . . You don't have the socialization" or security of neighbors.

Roosevelt is in good shape compared with neighborhoods Louisa Stark works in. Stark, an archaeologist by training, founded the nonprofit Community Housing Partnership 11 years ago to promote housing in the poorer parts of the city. Like West Buckeye--bordered by Seventh Avenue, 19th Avenue, Buckeye Road and the freeway. According to the 1990 census, West Buckeye's median household income was $6,000, one-fifth the city's average. In West Buckeye, it's more common to see empty lots than houses. Lot after lot is filled with abandoned refrigerators, couches, toys, broken glass.

Stark knows about the city's work in the Garfield neighborhood (bounded by Seventh Street, 16th Street, Van Buren and I-10), where her office is located in a brown infill fourplex. Garfield is one of the five neighborhoods targeted for infill by the Neighborhood Services Department.

Yet Stark is not impressed. She steers her old blue Nissan pickup around the streets of Garfield, pointing out trash-filled empty lots, abandoned houses, an unpaved road.

"I think of empty lots in terms of streets missing teeth," she says. Ironically, "the city housing department, I think, has been quite good at condemning and demolishing houses, leaving empty lots, which then, quite frankly, as the new infill program is moving into more affluent areas, leaves these areas quite desolate."
Stark is critical of a number of elements of the pilot Infill Housing Program. She's shocked it allows entire subdivisions to be built, as opposed to homes built lot by lot, literally "filling in" an area.

She believes the infill map should be drastically condensed to the area bounded by Van Buren, Baseline Road, 16th Avenue and Seventh Street.

Stark herself has a two-bedroom house with one bathroom. She thinks the extra bathroom and other requirements of the infill program are unreasonable. In Garfield, people are forced to convert garages into bedrooms.

She says, "Some of the stipulations are just too tough to meet in neighborhoods where the housing is going to have to be kept less expensive."

Mark Stapp agrees with Stark, which is surprising, given that he has received subsidies through the infill program. Stapp is building that 22-home subdivision at Third Street and Osborn, in a neighborhood which, with a mean household income of $17,000, is one of the few low-income neighborhoods where a builder has cashed in on the infill program. He had planned the subdivision long before the pilot infill project was conceived, and originally intended to build homes for about $60,000. City requirements--including block fences and air conditioning--pushed the price per unit into the mid-$80,000s. And although Stapp has already sold 18 of the homes, he resents city politicians and staff who continually refer to his project as a model of the pilot infill program. He says they stood in the way of affordable housing.

"There was a lot of political bullshit that flapped from the lips of council people publicly, that behind closed doors is not at all what they want to have happen," Stapp says. ". . . They don't want affordable housing in the infill program."
Vice Mayor Craig Tribken, who represents the center city, is the most obvious example, Stapp says.

Tribken counters: "All affordable housing doesn't need to be in central Phoenix. Central Phoenix has its fair share."

He says he didn't want poor people living in Stapp's houses. And he didn't want cheap wooden fences, either. "We don't want to build new Maryvales," Tribken says.

Stapp's subsidies will only turn out to be about $550 per house, because water and sewer hookups were already in place. He questions the value of subsidies at all, pointing out that the more expensive projects will be built regardless, and that even for his project, the city funding didn't make a difference.

Urban designer Michael Dollin admires Stapp for undertaking his housing project. Dollin believes the infill program is "a meager attempt," a "buckshot" approach that would better utilize resources by directing them to one neighborhood.

He's shocked that homes at Third Street and Osborn can sell for $80,000 and says some of the prerequisites "almost make the program unworkable."

But the infill program is not without enthusiasts. One of them is Greg Brownell, a sales associate with Elliott Homes. Brownell admits that the eight houses his employer built through the pilot infill program probably would have gone up without the subsidies. The eight homes are being added to an Elliott subdivision on 16th Street between Southern Avenue and Baseline. Brownell has nothing but good things to say about the pilot infill program. Perhaps that's because Elliott is trying to cut a deal with the city to build 97 more homes adjacent to its existing subdivision, all with city subsidies. "Two thousand bucks is a lot of extra money," Brownell says, particularly for marketing purposes.

Particularly when it's multiplied by 97.
Another big fan is Russ Conway, who might be the putative father of Phoenix's pilot infill program. Long before Rimsza and the city council approved the program, Conway, land development manager of Classic-Steller, a custom homebuilder, created Central City Estates. Homes at the 14-unit development on Central Avenue north of Missouri are priced at around $320,000. The site presented some difficulties because it had been home to a restaurant and hotel, so Conway persuaded then-councilmember Rimsza to consider expediting the building process for infill developers.

The result was the pilot infill program, which Conway took advantage of for Lincoln Vistas, a 28-home development north of Lincoln Drive, near 20th Street. Lincoln Vistas was already in the works, so the fee waivers Conway's received on four homes (so far) are just icing on the cake, although he says Lincoln Vistas is difficult to sell because of traffic and a few older homes in the area. Conway says the infill program was a factor in his decision to build Meadowlark Manor, a 12-home development at 15th Avenue and Orangewood. He's received a fee waiver for one home so far.

How to promote infill in the true inner city? Conway says it would be difficult to pinpoint target areas on a map, excluding areas that don't need incentives. "That kind of map would be impossible to draw," he says.

Conway laughs when asked whether some fee waivers are undeserved. "Probably no different from our welfare system," he says.

John Meunier, ASU's architecture dean, agrees that Rimsza deserves some credit for making infill an issue. But, Meunier wonders, "Does he have the ammunition to actually fight the battle he wants to fight?"

Rimsza keeps a dog-eared legal pad scribbled with lists of suggestions to promote infill--from offering free garbage pickup, to encouraging city employees to live in Phoenix, to securing a capital-gains tax break for people who build in the city. Many of Rimsza's ideas depend on other governmental bodies--particularly the Legislature. Phoenix officials covet a state sales-tax break for construction costs on infill housing, to benefit the home buyer. The city would offer a similar break, Rimsza says. Phoenix Intergovernmental Affairs Coordinator Norris Nordvold says the city tried to push it through the Legislature last year, but failed.

House Ways and Means Chairperson Lori Daniel, a Chandler Republican, says she'll kill such a bill if it comes up again next year.

Daniel says, "You're making people from Chandler or other various cities pay sales tax for Phoenix's infill. . . . I think it needs to be beneficial across the state. I think infill's great. I think what the city's trying to do is fine. But I think they can waive their own fees, waive their own taxes on a city level and accomplish the same thing without getting into the state tax dollars."

Rimsza doesn't hold out much hope. "The Legislature has little interest in urban communities today," he says. Craig Tribken's more blunt. He says, "The political will is not going to come from a Legislature that is more concerned about grazing rights than they are about home values in the central city. These guys take an almost perverse pleasure in watching cities fail, because cities represent to them the failure of liberal policies."

Tribken says infill won't occur until the cities surrounding Phoenix share the responsibility for providing affordable housing.

Meunier suggests doubling gasoline prices--to discourage commuters--and embracing old ranch houses as the next trendy home of choice for refurbishment.

Reed Krolof says bribery will do just fine. "I believe that most of the homebuilders in Arizona are not a particularly sensitive lot, and that the smell of money will attract most of them above and beyond any concern for the environment. So if a $2,000 waiver per unit is enough to get them, then fine. And if it's not enough, then raise it a little bit." Just about everyone agrees on one thing: Growth on the city's outskirts must be controlled. Holly O'Brien says, "If any city councilperson votes for annexing one square inch, they are against infill."

This year, the city approved an impact fee boost of $600 per house for development north of the Central Arizona Project canal--raising the fee to around $5,360, depending on location. The impact fees are designed to offset the city's costs for developing virgin desert; building in developed parts of the city is cheaper because water, sewer and electrical hookups are already available.

The impact fees now charged by the city are only a portion of the eventual cost of developing the land.

Krolof says, "Make the developers pay the entire infrastructure cost. Not some percentage--some wacko, weird percentage, like they've worked out before--but the entire infrastructure cost. . . . That will stop development at the perimeter, or it will dramatically slow it down."

Last week, the city council voted to double the infill program's budget, from $100,000 to $200,000. No changes were made to the program.

City staff showed slides of a subdivision near 16th Street and Missouri, and of houses that are part of the Elliott Homes subdivision in South Phoenix.

No mention was made of Gretchen Freeman's home, or the homes on North Central Avenue. Vice Mayor Craig Tribken says he plans to try to have a cap put on the waiver amount, so the most expensive houses don't get the most money, but the council didn't take action on it.

Frank Dolasinski, who administers the pilot program through the city's Business Customer Service Center, says he suggested capping the waiver amounts last year, when discussion of the program first came up.

Tribken tells New Times, "No question in my mind we ought to cap it."
So why not now?
Tribken chuckles.
"There's a mayor's race going on.

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