As housing prices in Arizona climb to half a million dollars, advocates like Nicole Newhouse and the Arizona Housing Coalition are urging a policy that makes home ownership more attainable and creates a safer environment for people experiencing homelessness. Currently the state’s unhoused population hovers around 15,000, and, in a recent interview, Newhouse discussed the coalition’s work to pass legislation that alleviates the housing and homelessness crises across the state. 

The questions and answers have been lightly edited for style and clarity.

What are the biggest housing challenges right now?

It’s land and cost. Now, the land part, it really depends on the developer. There are some developers who have no problem with zoning because of where they choose to build. There are other developers who would say that it has everything to do with zoning. I would say that close to 90% of the land in Maricopa County is zoned for single families, and, in order for us to meet the needs, we need to have different types of zoning to allow more density. There are also some regulatory barriers, permitting barriers and bureaucratic barriers. I toured a project done by Catholic Charities that took them 12 years to build and had everything to do with zoning and permitting. Most developers could not take on that kind of risk for that amount of time. 

Could you tell me a little about the work that the Housing Coalition does?

We are a coalition of over 350 organizations, nonprofit and for-profit, that run the spectrum of homelessness and affordable housing and everything in between. Those organizations are everything from shelters, emergency shelters, and all of the forms of homeless support, whether it’s transitional housing or permanent supportive housing. We also have organizations that are in behavioral health, addiction and workforce development. We have affordable housing developers. We have lenders and community development institutions that are involved in the financial transactions. So our membership spans all of this. The one thing we do is we learn from all of our members. People down here, they get updates from their policy advisors about what we can and can’t do; what we should and shouldn’t do. We go to our members to really understand what’s happening on the ground to tell us what’s working and what’s not working so that we can then recommend policies that would actually positively impact the work and shrink our need to actually exist.

What do you see as the biggest legislative priorities of this session?

At this point, I would say the renewal and expansion of the state low-income tax credit in combination with the renewal of the Department of Housing for at least four years. In terms of positive action — things that the Legislature can do to help, those are the two biggest priorities. A lot of people don’t understand the low-income housing tax credit, but it is a public-private partnership that Ronald Reagan started. It is responsible for the vast majority of affordable housing across the United States. The state program was started in 2021 under Gov. Doug Ducey, and really what it boils down to is if you’ve ever bought a home, you’ve got to take out a mortgage. But the amount of debt that you have can impact how much mortgage you could get. When you’re building an affordable housing project, you have lots of different things that you use to cover the full cost of the build that’s called the capital stack. And what tax credits do is allow you not have debt, but have equity. You compete for an allocation of tax credits. The builder doesn’t use those — what they do is they go and sell them to a company that wants to lower their tax liability. They get a discount and they buy them from the developer infusing capital. It sounds convoluted, but the state program allows developers to build these projects, particularly now that the cost of things is going up, in rural areas where it would not be affordable for them.

How does the coalition feel about the Legislature’s approach to addressing homelessness with increased regulations around mixed hoteling, drug-free homeless zones, and more data for outcomes of our unhoused population?

Having talked to a lot of the lawmakers, I know that they’re coming from a place of good intention. I don’t know that they’ve thought it all the way through or spreadsheeted it as I would do. What’s the cost and what’s the benefit in both the hard cost as well as the community cost and the hard dollar benefit and the community benefit to those approaches? Why in the world would we take away a non-cap shelter where the hotel operator is a willing participant and they understand the risks that they run? I don’t understand why, other than it’s punitive. We all want drug-free homeless zones, but people who are suffering from addiction very seldom can hit sobriety one and done. Getting sober is not a linear process, especially when you’re dealing with the trauma of being homeless, plus whatever traumas created the place for you to become homeless. 

Why shouldn’t the Legislature continue the Department of Housing for just one year as proposed by House Bill 2209?

It’s disruptive to builders. It could be disruptive to our federal funding. We’ve already got a shortage and if we put a question mark on things, what is it going to do to the shortage? Coming from financial services with lots of compliance, you don’t put them on a pip and threaten them with firing in a year. What you do is have ongoing reviews. You’ve got the auditor general report and you’ve got the plan that the department has put together. Then, make sure that there is a report out to the Legislature episodically. You want to do it once a quarter. The renewal for a single year has no functional reasoning. There’s lots of ways they could keep the department accountable that doesn’t require putting everything else in jeopardy. 

What kind of policy ideas or legislation is not being heard right now that you think would benefit the state?

With housing, the prohibition on inclusionary zoning is really challenging. I think that if the state would stop that preemption and allow cities to make the determinations that they want to make about having inclusionary zoning as part of their plan, I think we could naturally see some developments of affordable housing happening. I also think cities and towns don’t always have some of the financing tools that they (should) have. So tax incremental financing with good guardrails.

The league tried to start that this year, but it didn’t really go very far. I know that recently the Department of the Interior and the Department of Housing and Urban Development secretary announced the use of federal lands. Before we went out into our wildernesses, I would want to take a look at what we have as urban infill and see what, if anything, we could do with that and what that could produce. 

And what about homelessness policy?

It’s not a delight to anybody that has to deal with the budget. It takes money. There are 15,000 people we can count who are living on the streets and in shelters, but I’ve only got enough beds and vouchers for 10,000. So I need not just support for people that are sitting in shelters, but places that they can graduate to before they’re ready to get into an apartment. Something you’ll hear from a lot of lawmakers is that we can’t give apartment keys to somebody who is addicted and I don’t necessarily disagree. There’s something that used to exist a long time ago here in Phoenix called single room occupancy where you could get shelter, but people rented them for the day. We just need to be creative and get stakeholders who don’t have a political agenda in the room.

Would the Starter Homes Act move the needle in helping people find affordable homes?

Even among our coalition, there are differing opinions about it. We certainly have some fans of the Starter Home Act. The coalition as a whole is absolutely interested in making sure that Arizonans have a pathway to home ownership. It’s a big question mark. I can say supply is always good. Developing opportunities for ownership is good. Single family, yes, but we really need to focus on density. A 1,500 square-foot-lot is not doing a whole lot in terms of helping a homeowner develop equity. It’s very seldom the bricks and the sticks that are appreciating — it’s the land. 

This measure appears to be dead at the moment, but did the “Yes in God’s Backyard Bill” YIGBY suffer from reduced scope by limiting it to single-family homes? 

A great deal. Now, I will say we have a lot of churches and religious institutions across the state and even if we had like only 10% of them built and they built five units per acre, it would still be introducing more units than we have. I don’t want to discount the work and the compromise that went into that bill. That’s important particularly in Maricopa County because of the sheer absence of units. I invoke the Common Sense Institute because their report last year estimated that it would take Maricopa County 85 years to build our way out of this at our current rate.