City built affordable housing is anything but affordable for taxpayers and profits off of the poor.
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.
For example, 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.
The city of Phoenix is building affordable housing on 24thStreet and Van Buren for $281,000 a unit, on land that it already owns.
The city’s affordable housing apartment complex 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.
Phoenix insisted on being the developer of the project…why?
Non-profit and private companies compete with the city for federal affordable housing funding and they can produce more affordable housing units for the same amount of funding, which would benefit more low income residents.
By acting as the developer of the project, Phoenix gets a “Developer Fee” of up to a 14 percent from the federal government. The city’s large bureaucracy lives off of these federal dollars.
The non-profit and private developers produce housing at a far lower cost per unit and could build at least 50 percent more affordable housing units than the city.
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.
This is a “Reverse Robin Hood” scheme in which the city is taking from the poor to well…give to the government.
Both the taxpayer and the poor must be protected. Phoenix and other governments must end the practice of profiting on the poor.
Here is what must be done:
- 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.
- 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.
Editor's note: Mr. DiCiccio represents District 6 on Phoenix City Council