$10 Million Budgeted for Affordable Housing? Not Enough, Advocates Say

City of Phoenix
For the first time in nearly a decade, Arizona lawmakers look poised to lift a cap on funding for affordable housing and homelessness services.

But advocates say the proposed spending isn't nearly enough to address the state's growing housing crisis.

Arizona Republicans proposed a budget this week that would inject $10 million into the state Housing Trust Fund, which provides grants for construction projects, rental assistance, rural home ownership, homeless shelters, and other programs to keep roofs over the heads of low-income residents.

That might seem like a lot compared with the $2.5 million allocated each year from 2010 to 2018. Housing advocates, however, point to the years leading up to the 2008 subprime mortgage crisis, when lawmakers consistently budgeted more than $20 million toward the fund.

The Arizona Housing Coalition and House Democrats proposed adding $30 million to the fund on an annual basis, citing a recent finding that this state ranks the third-worst in the nation for affordable housing by some measures. At the same time, homelessness has been on the rise in the state. In Maricopa County alone, homelessness rose 12 percent from 2017 to 2018, according to the latest point-in-time count.

Arizona has only one affordable housing unit for every four low-income households, according to a report published by the National Low Income Housing Coalition in March.

"We're not asking for this wild increase of funds," said Camaron Stevenson, spokesperson for the Arizona Housing Coalition. "We're asking for it to be restored and brought back to what had been determined effective a decade ago."

Bringing the Housing Trust Fund's budget to pre-recession levels would allow for more investments in homelessness prevention, such as developing affordable housing units. On the flip side, a smaller budget forces the state to use all of its Housing Trust Fund money on reactionary spending, such as emergency housing and rental assistance.

The Housing Trust Fund, created in 1988, gets funded through the sale of unclaimed property. At its height, the fund received 55 percent of those sales. But in 2010, lawmakers capped allocations to the fund to $2.5 million.

For years, Democratic State Senator Lela Alston has introduced bills that would restore funding for the Housing Trust Fund back to 55 percent of unclaimed property sales. Her version of the bill this year — SB 1497 — did not get a hearing.

"The needs are so significant. There is just not nearly enough money for housing," Alston said in a phone interview. She also criticized a $3.5 million earmark in the $10 million Housing Trust Fund allocation toward housing services for people with serious and chronic mental illness. She said supports that funding, but wanted it to be separate from the $10 million.