Housing Affordability Presentation

Housing Affordability 
City Council 
Work Session
April 11, 2022

Meeting Intent 
o Why is Housing Affordability a Growing Issue?
•
Data / Market Conditions
o How is Affordable Housing Defined?
o What is the City Already Doing?
o What Additional Tools / Options Are Available?
2

Why is Housing Affordability a 
Growing Issue?
3

Factors
•
High employment and population growth
•
Low housing inventory 
•
Low rental vacancy rates  
•
Low interest rates / high inflation
•
Unstable supply chains, labor/material costs
Impact
•
Increased housing costs and incomes not keeping pace
•
Diminishing housing affordability
•
Increased housing cost burden
4
Factors and Impacts

5
Population Growth & Employment
Population growth 2007-2020 with largest increase age group: 55+
Job growth projection: Increase of 67,300 new jobs over 2020-2055 period
Sources: MAG Socioeconomic Projections; Gruen Gruen + Associates

6
Limited Housing Supply
20,000
21,000
22,000
23,000
24,000
25,000
26,000
27,000
2018
2019
2020
2021
2022
(YTD)
Existing Units
Delivered Units
Multi-Family Apartment Inventory in Chandler
Homes for Sale*
Homes currently on the market per 
MLS: Approximately 5,000
Homes typically on the market per 
MLS historically: 22-24,000
Currently 20-23% of normal
Source: City of Chandler
*Maricopa and Pinal County

7
Housing Cost Increases
Average Sales Prices (For-Sale Housing) by Bedrooms in City of Chandler
Studio/1-BR
2-BR
3-BR
4-BR
5+ BR
Jan-March 2021
$189,286
$331,813
$400,249
$548,213
$813,089
Jan-March 2022
$264,611
$409,765
$502,342
$682,766
$900,281
Year-over-Year Increase
$75,325
$77,952
$102,093
$134,553
$87,192
+39.8%
+23.5%
+25.5%
+24.5%
+10.7%
Sources: Arizona Regional MLS; Redfin; Gruen Gruen + Associates.
Average cost for a three-bedroom home is $502,000 in Chandler  ($290/sqft)

8
Housing Cost Increases
Effective Monthly Apartment Rents by Bedrooms in City of Chandler
Studio
1-BR
2-BR
3-B4
4+ BR
1Q 2021
$1,396
$1,503
$1,634
$1,870
$1,554
1Q 2022
$1,579
$1,764
$1,918
$2,195
$1,674
Year-over-Year Increase
$183
$261
$284
$325
$120
13.1%
17.4%
17.4%
17.4%
7.7%
Sources: City of Chandler; CoStar; Gruen Gruen + Associates.
Average effective monthly rent in Chandler $1,880 per unit ($2.00/sqft)

$0
$50,000
$100,000
$150,000
$200,000
$250,000
$300,000
$350,000
$400,000
Tempe
Mesa
Gilbert
QC
Chandler
Median Home Value
Median Household Income
Source: ESRI Business Analyst, 2020
9
Median Home Values & Household Income
Income Growth Not Keeping Pace With Housing Cost Increases

10
Current Affordable Housing Prices by Household Income Bracket
Household Income
Maximum For-Sale Housing Price (1)
Maximum Monthly Gross Rent (2)
Less than $35,000
Below $128,000
Below $875
$35,000 to $49,999
$128,000 to $182,999
$875 to $1,249
$50,000 to $74,999
$183,000 to $274,999
$1,250 to $1,874
$75,000 to $99,999
$275,000 to $365,999
$1,875 to $2,499
$100,000 to $149,999
$366,000 to $549,999
$2,500 to $3,749
$150,000 and Above
$550,000 and Above
$3,750 and Above
(1) Assumes a 3.5% down payment (FHA minimum) with a 30-year fixed mortgage at 5.0% interest rate. Permanent mortgage insurance is included at 0.85 percent 
of the loan (current FHA rates) and taxes, home insurance, and association fees assumed to approximate 1.15 percent of the purchase price.
(2) Assumes monthly gross rents equal 30 percent of income.
Source: Gruen Gruen + Associates
Housing Affordability

11
Diminishing Housing Affordability
Increased Cost Burden
4,761, 20%
4,799, 21%
7,315, 32%
2,662, 11%
3,676, 16%
Household Income <= 30% AMI
Household Income >30% to <=50%
AMI
Household Income >50% to <=80%
AMI
Household Income >80% to
<=100% AMI
Household Income >100% AMI
Approximately 23,200 households in Chandler are cost-burdened, expending more than 30% of their before-tax income 
on housing expenses.  About three-quarters of the cost-burdened households are below 80% AMI.
Sources: U.S. Department of Housing and Urban Development, 2018 CHAS data; Applied Geographic Solutions. Gruen Gruen + Associates.

4,323
3,153
4,131
5,680
1,223
1,442
3,267
Less than $128k
$128-$183k
$183-$275k
Less than $875
$875 to $1,249
$2,500 to
$3,749
$3,750 +
Owners 
(by Home 
Price)
Renters 
(by Monthly 
Rent)
Current Affordability “Gap Analysis” for Chandler
Note: Renters in higher price brackets can also afford units affordable to lower incomes (e.g., a household that can afford $2,500 in monthly housing cost can 
also afford units in the $1,250 to $1,874 price bracket). 
Source: Gruen Gruen + Associates
23,221 Units 
Affordable Supply 
“Gap”
Diminishing Housing Affordability

How is Housing Defined?
13

Housing Continuum
Housing Continuum
14

Housing Continuum
Affordable Housing
15

Housing Continuum
Workforce/Attainable Housing
16

Housing Continuum
Market Rate Housing
17

“Market Rate” Housing in Chandler
Estimated Current Relationship Between Affordable Income Limits and Market Prices of Housing in Chandler
Unit Type
Affordable Price 
@ 80% AMI (1)
2022 Market 
Price (Average) (2)
Implied Percent of AMI 
to Afford Market 
Average
1BR Rental Apartment Unit
$1,186 / mo
$1,764 / mo
119%
2BR Rental Apartment Unit
$1,423 / mo
$1,918 / mo
108%
2BR Home Purchase
$151,600
$409,800
216%
3BR Home Purchase
$175,200
$502,300
229%
4BR Home Purchase
$195,500
$682,800
279%
(1) Based on 2021-2022 income limits for Maricopa/Pinal Counties.  Assumes 1.5 persons per bedroom, per AZ Dept. of Housing standards.
(2) Based on CoStar and ARMLS data for Chandler (1Q 2022).
Source: Gruen Gruen + Associates
Diminishing Housing Affordability

What Is the City of Chandler 
Currently Doing to Address 
Housing Affordability?
19

• Create More Homes for More People
o Increase inventory of all types and for all incomes 
• Keep Housing Affordable and in Good Repair
• Help People Stay in Their Homes and Communities
20
Actions and Strategies

Current Actions / Strategies
Create More Homes for More People 
• Units Added from January 2018 – April 2022 
o 2,709 Single Family Units 
o 4,275 Multi-Family Units
• Additional Affordable Units 
o Newtown Community Land 
69 Homes (plus 2 pending) (8 added since 2018)
o ARM
14 Affordable Rental Units (plus 2 pending) (3 added since 2018)
o Habitat For Humanity 
15 Homes
o Low Income Housing Tax Credit (LIHTC) Units 
447 Units
o Affordable/Workforce Housing concepts introduced during preliminary 
discussions with developers
21
Actions and Strategies

Current Actions / Strategies
Keep Housing Affordable and in Good Repair
• City Public Housing Authority providing 303 units
o 163 Family Units
o 37 Senior Units
o 103 Single-family homes
• Repositioning Public Housing through 
Rental Assistance Demonstration (RAD)
• Housing Rehabilitation Program
o Average of 25 homes per year received assistance with repairs 
related to health and safety
• Let’s Pull Together
o In 2021, volunteers worked on over 200 homes
22
Actions and Strategies

Current Actions / Strategies
Help People Stay in Their Homes and Communities
• Tenant Based Rental Assistance (TBRA)
• 25 vouchers providing for 24 months of assistance
• HOME funded
• Follow HUD payment standards
• Tenant pays 30% of their income
• Emergency Housing Vouchers (EHV)
• 28 vouchers provide assistance through 2030
• ARPA funded
• Follow HUD payment standards
• Tenant pays 30% of their income
• Landlord Incentive Program
23
Actions and Strategies

Continued Need
• Consultant: 
Housing 
Inventory Results
• What is missing?
• What are the 
options?
24
0
5,000
10,000
15,000
20,000
25,000
30,000
Less than $875
(Sales Price
Equivalent = Less
than $128k)
$875 to $1,249
(Sales Price
Equivalent =
$128k-$183k)
$1,250 to $1,874
(Sales Price
Equivalent =
$183k-$275k)
$1,875 to $2,499
(Sales Price
Equivalent =
$275k-$366k)
$2,500 to $3,749
(Sales Price
Equivalent =
$366k-$550k)
$3,750 + (Sales
Price Equivalent =
>$550k)
Number of Existing Units by Monthly Cost
Number of Existing Households able to Afford Units*
Supply 
“Gap” = 
4,400 
units
Supply “Gap” 
= 1,200 units
Source: Gruen Gruen + Associates
Supply 
“Gap” = 
10,000 
units

What Additional Tools / Options 
Are Available?
25

What Programs Are in Effect Now?
•
Federal, state and local 
funding provides low-interest 
financing for affordable 
housing
•
Redevelop City-owned 
properties
•
Down-payment assistance for 
first time homebuyers
•
Community Land Trust
•
Incentives: land grants, tax 
abatements, lower or abated 
permit fees, water connections, 
and sewer hook-ups, expedited 
review process
•
Project Based Vouchers
•
Low Income Housing Tax Credits 
(LIHTC)
26

What Do The Guiding Documents Say?
General Plan
•
Provide for a variety of housing choices for all income 
levels
•
Continue to encourage private investment in affordable 
housing
•
Increase capacity for and coordination of affordable 
housing programs and projects
•
Concentrate of improving housing affordability citywide
•
Encourage compatible infill projects
27

Constraints and Limitations
•
Chandler nearing buildout, limited land available for housing 
options
•
State law prohibits municipalities from implementing certain 
controls on rent increases
•
State law prohibits municipalities from requiring affordable housing 
as a condition of zoning
•
Housing projects often take several years before units become 
available
28

Potential Affordable / Workforce Housing Planning Tools
Potential Planning Tools
•
Stipulating a certain number of affordable/workforce housing units through 
development agreements (conditions apply)
•
Allowing accessory dwelling units in areas where lot 
size and infrastructure may support it
•
Allowing higher density where additional affordable/workforce units are proposed
•
Reducing standard suburban setbacks to accommodate affordable/workforce 
housing in the infill area 
•
Providing for reduced parking ratios for 2- and 3-bedroom affordable/workforce 
housing units
29
Mariposa Community

Next Steps
•
Continue Repositioning of Public Housing to Increase 
Availability of Units
o
RAD Development Agreement anticipated late spring
•
Use planning tools and incentives to stimulate private sector 
housing affordability solutions
•
Updates codes and area plans to reflect need for more 
housing options
•
Support State and Federal efforts to address housing 
strategies and affordability
30

Discussion & Questions
31

Housing Presentation 
City Council 
Work Session
April 11, 2022