Pricing Developments

Politicians, builders and advocates promote affordable housing downtown

A small complex of colorful multistory homes has been constructed so far in the high-priced Mercado District subdivision on Congress Street, just west of the Santa Cruz River. If the City Council approves an agreement on Aug. 6, a much more economically diverse development is planned right next door.

The council will be considering a proposal to sell about 14 acres to Jerry Dixon and his partners so they can create the Gadsden project. The components of this development are slated to include 400 condominium units and a boutique hotel, along with a public market and other commercial space.

Because the land is now publicly owned, proponents wanted to require that some affordable housing be built on the site. Under Dixon's original proposal, 5 percent of the units were to be targeted at those making less than 80 percent of Tucson's median income. For an individual in Tucson, the median figure is now $38,500, while for a family of four, it is $55,000.

In addition, Dixon proposed that 35 percent of the housing units would be priced for those earning between 80 and 125 percent of the median income.

Councilwoman Regina Romero, who represents the area, wasn't satisfied with that approach. She, along with Councilmember Steve Leal, pushed to change the affordable-housing mix of the project.

"Because the city owns the land," Romero says, "we need to see something back." She advocated changing the figures for affordable housing to 17 1/2 percent for each category.

Romero emphasizes that when running for office last year, she promoted greater neighborhood reinvestment by the city. She also campaigned with the belief that "downtown is for all of us," she says.

Romero points out that the city's comprehensive plan calls for 10 percent of housing to be affordably priced, but that only 6 percent actually is. "(The Gadsden project) will be a wonderful step in the right direction. I see this as a model (for the community)," she says.

Brian Flagg, of the Casa Maria soup kitchen in South Tucson, agrees. He advocated for more housing in the project for the community's lowest-income families, and says, "To be fair and successful, downtown's Rio Nuevo project has to be for everybody. It can't just be a bunch of yuppies.

"Regina Romero stepped up and gave a damn about poor people," Flagg adds about a councilwoman who has so far received her fair share of criticism from constituents not pleased about some of her other positions.

To help pay for the affordable homes in the Gadsden project, several mechanisms will be used. A primary one will be a "voluntary" 1 percent contribution of the sales price of each home sold in the development to the Tucson Housing Trust Fund, excluding those homes sold to the lowest-income families.

Dixon had previously estimated that this perpetual "voluntary" requirement would initially generate $1.5 million. With the changes in affordable-housing percentages, that number has shifted, but Dixon didn't have a revised estimate.

According to Romero, Dixon will kick off the trust fund with a $250,000 contribution. This money will then be combined with other sources to reduce the cost of mortgages to make them affordable to low- and moderate-income buyers.

These efforts to subsidize homes have led to concerns that the entire Gadsden project may not be economically viable in this soft housing market, but Romero doesn't share those worries.

"The mixed uses will mean the development is viable," the councilwoman says. "The public market, hotel, office space and diversity in housing will help them. They're not just dependent upon housing."

For his part, Dixon says of the Gadsden project, "We're trying to provide affordable living, not just affordable housing."

Dixon will also reportedly pay $3 million to loop Tucson's planned modern streetcar through the Gadsden project. In exchange for all his generosity, the city is scheduled to turn over to him the land for the development, which has been privately appraised at more than $4 million, at no charge, after he meets specific implementation requirements.

Across the way at the adjacent Mercado District, there was also to be a substantial affordable-housing component when Dixon and others first proposed it several years ago. It was city-owned land, and the anticipation was that 10 percent of the 250 units would be modestly priced.

But those plans changed, and now, only four of the homes will be in the affordable category. At the same time, some of the three-bedroom houses being built in the subdivision sell for $500,000 and more.

One of the reasons the city of Tucson didn't press for more affordable housing in this project was that the Menlo Park Neighborhood Association strongly opposed it. (See "Residential Revolution," March 23, 2006.) Their attitude, however, has changed.

"We do want affordable housing," explains Lorraine Bartlett, president of the neighborhood association, "so everyday people like police officers, firefighters and teachers can afford it. We need families moving in with kids to attend our schools."

Romero thinks the neighborhood association learned a lesson from the Mercado District. She also believes the process used to develop the Gadsden project was much better.

As a result of these changes, and assuming the City Council approves the deal, politicians, developers and neighborhood residents may agree with Romero when she concludes: "Downtown should be for all of us. If someone wants to live there and can afford a home, there should be choices to pick from."

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