By Lee Cooley, Scottsdale REALTORS®
Sometimes when things heat up in Scottsdale, it’s not from the temperature outside.
Sometimes it’s when city leaders, staff and developers misalign. Like when Axon, the maker of tasers and bodycams, proposed developing a 74-acre parcel within walking distance of its current headquarters into a corporate campus.
Pushback came from the Airport Advisory Commission and the Planning Commission, resulting in an indefinite continuance from City Council. But Axon CEO Rick Smith recently told investors he isn’t taking it laying down.
“It’s not clear that Scottsdale wants Axon, as we are seeing the political environment becoming more challenging and, frankly, anti-development,” Axon CEO Rick Smith said.
Axon isn’t the only company fighting City Hall. On day two of the Arizona Housing Coalition Conference in Mesa, developers gathered on a panel about The Complexities of Financing & Developing Affordable Housing. Among them was Dan Richards, a partner with Greenlight Communities in Scottsdale.
“Some of the cities understand (affordable housing) and they want to be part of the solution,” said Richards. “When you have alignment at the council level, staff level, then you’re able to work through the process. Other cities don’t get it. They say the words ‘affordable’, ‘attainable’, ‘workforce’ because of the service industry, emergency workers, healthcare workers. It’s hard to not want those people in your community but the reality is, they can’t afford it.”
Why this is important
- In 2021, 83% of the jobs in Scottsdale were filled by people living outside the city.1
- It’s the only city where police officers can’t afford a two-bedroom apartment.2
- As Scottsdale residents continue to age, they tend to use more city services.3
“We had a recent experience in a west Valley city that wanted workforce apartments,” Richards continued. “A couple of people in the city kept saying the word, ‘Kierland’. It’s beautiful, it’s great. The reality is, you can’t live there if you’re trying to do workforce apartments. They said, ‘Okay, we get it. Never mind.’ Then, right when we were ready to go and do some zoning submittals, they asked us where the underground garages go.
“It’s impossible to build this and have the rents we’re all talking about, get the financing in place and everything if you’re having to do all those things – structured parking, crazy design details, rooftops pools. Some cities get it and want to be part of the solutions, and some don’t.”
When it works
In 2019, Greenlight had a sure thing. “We had one project we did in Scottsdale,” said Richards. “Eighty-nine units on Hayden just north of McDowell. It was an old Baptist Church. It was zoned (R-5, multifamily). That’s the only reason we took it on.
“We thought it’d be relatively simple for our height, for our density. We knew exactly what we were getting into. There’s no entitlement issues with that, we just had to go through Development Review Board. In the City of Scottsdale, it’s a public design review board process – as opposed to Phoenix which is really a staff-level process.
“We had meetings with the neighborhood to explain what it is – it’s been a church for 40 years; it was zoned to allow our product. We did DRB meetings, but the pushback wasn’t on the design…which was the only thing they were allowed to do…the pushback was on the use and the zoning.
“It took us over a year to get through the design review process on a zoned site in Scottsdale where it takes us under a year in any other city in Metro Phoenix to do zoning and site plan approval.” – Dan Richards, partner at Greenlight Communities
When it doesn’t
Three years later, ORION Investment Real Estate SVP Larry Kush, Caliber Cos. President Jennifer Schrader and Rise48 Equity CEO Zach Haptonstall participated in a Scottsdale State of the Multifamily Market panel.4
“Up on 92nd Street near Shea there are two developers,” Kush said. “Kaplan (94 Hundred Shea) and Caliber (Mercado Courtyards) want to build around 500 units on two sites that border each other. I seriously doubt it will ever be approved.”
“What we experience here is a small subset of people who don’t want to see change,” added Schrader. “We’re actually converting an office building into apartments. We’re not taking vacant land. We’re taking an office that’s been vacant for a decade.”
“You’ve got different politicians complaining about how people like us are jacking up the rents so it’s not an affordable market anymore,” said Haptonstall. “But then on the other hand, you don’t want to provide more housing to increase the supply. It’s very hypocritical.”
Now flash forward a year and a half. John Graber at the Scottsdale Independent reported that “through the first seven months of 2023, developers pulled 122 building applications for projects already approved by the city council. That compares with 46 projects for the same time period in 2022 and 33 for the same time period in 2021.”5
What you can do
Affordable housing may be cooling off in Scottsdale, but a statewide strategic partnership has launched Home Is Where It All Starts®, a new movement to show the value and impact of attainable homes; keyword: attainable.
“To lessen the stigma attached to Section 8, we don’t use ‘affordable housing’ ,” said Dave Brown, CEO of Valley Leadership (VL) and a proponent of Home Is Where It All Starts®.
In 2019, Brown’s VL Impact Maker launched the first of two teams on education and health. One initiative for the Health Impact Team is Housing & Healthy Neighborhoods by Supporting inclusive communities where Arizonans have a safe and healthy place to call home.
You can help spread the message by downloading and sharing the Home Is Where It All Starts® awareness campaign toolkit hosted by one of its many partners.
1Most workers in Scottsdale can’t afford living here
2Scottsdale’s affordable housing situation is worst in Metro Phoenix
3Scottsdale is getting older
4Scottsdale’s State of the Multifamily Market
5Experts: Scottsdale City Council slowing growth