The city of Chandler is approaching a crossroads with what to do with its aging public housing.
It can continue putting band-aids on 303 units the city constructed back in the 1970s, and hope the federal government will cover the tab.
Or the city could consider partnering with private developers and remove its responsibility for maintaining properties.
Leah Powell, Chandler’s neighborhood resources director, said something will need to be done soon because capital funding from U.S. Housing and Urban Development is diminishing.
The city’s upkeep expenses are rising and not keeping pace with federal expenditures. According to the city, HUD gave Chandler an extra $3,573 this year for capital expenses, which breaks down to about $11 per unit.
This past summer, Powell said, a water line broke at one of the city’s housing sites that almost ended with a full evacuation and thousands of dollars in repairs.
“If we have a major issue somewhere down the future, where is that money going to come from to replace or repair something if we’re not getting it from the federal government,” Powell said during a recent city council meeting.
Chandler’s public housing stock consists of four complexes of multi-family units, one complex for senior citizens, and 100 single-family homes scattered throughout the city.
As housing costs across the Valley continue rising, Chandler’s anticipating a greater need for affordable units in the near future. An assessment done by the city this year estimated Chandler will soon fall short of 9,400 units for residents earning less than $35,000.
Cities determine a unit’s affordability by determining whether its cost is more than 30 percent of a resident’s income.
A recent survey of Chandler residents found that about 39 percent of respondents spent more than 30 percent of their earnings on housing.
In order to accommodate more units and curb maintenance costs, the city’s evaluating whether or not to change its traditional model of public housing.
Amy Jacobson, the city’s housing and redevelopment manager, said Chandler presently has a list of 2,500 families waiting for affordable housing.
“We definitely have the demand,” she added.
The city also administers 486 vouchers to help residents pay their rent in a privately-owned unit.
But Jacobson said only about 150 voucher-holders have been able to find landlords willing to accept the subsidy.
One model the city’s exploring is contracting with private developers to help revamp its housing stock. Chandler would leverage its equity in exchange for the developer renovating units and still offering affordable rentals.
The Housing Authority of Maricopa County executed this type of plan a couple years ago when it partnered with developers to renovate some of its rundown units near Avondale.
The $30-million upgrade resulted in more affordable units being built with nicer amenities.
HUD permits these projects through its Rental Assistance Demonstration program. Passed by Congress in 2012, RAD allows cities to convert their housing dollars into contracts with private entities.
These projects operate similarly to the rental vouchers handed out by HUD. But instead of a city being responsible for an apartment complex, RAD allows the private sector to take over the property with the promise of accepting a certain number of vouchers from low-income tenants.
At least 11 RAD projects have been executed across Arizona over the last few years, adding about 1,200 housing units to the market.
John Benton, a consultant with The Concourse Group, said construction costs have been accelerating so quickly that these public-private partnerships can fill the gap HUD funds can’t fill.
“You have to bring other income streams into these projects in order to make them work financially,” he told the council.
City Council directed staff to further explore what options Chandler can make with its public housing, with some members expressing an interest in eventually phase out the city’s single-family home units.
Councilman Matt Orlando said he was worried about hastily selling off the homes scattered across Chandler and risking families being left without shelter.
“(This) scattered-site housing was a great idea for our society in the 1970s, it integrated people to the area,” Orlando said. “So, I’m a little concerned about just saying ‘Let’s sell everything right now.’”
Powell said HUD prohibits cities from kicking tenants to the curb. The goal right now, she said, is deciding whether converting Chandler’s public housing will add more affordable housing to the city.
Several neighboring communities have begun the process of converting their public housing, she added, which may at some point become mandated by the federal government.
“We’d like to really get out in front of this,” she said, “and be able to move forward with creating that five-year plan.”