Getting a Fair Share: How Developers Can Increase Development of Low-Income Housing

Abstract

The growing wealth gap and lack of available low-income housing have become significant problems in the United States. Lack of available low-income housing leads to an increase in homelessness and financial hardship for low-income families. In Tucson, low-income housing options are few and far between. This project is designed to get a perspective from a property developer on why there are so few low-income housing complexes in Tucson. It also tries to identify solutions and incentives for developers to build more low-income housing complexes while still being economically viable. This project asked essential questions about low-income housing to local developers, gathering statistical data and developing a financial analysis on low-income and non-low-income properties, researching different government programs and funds available to local developers, and researching unorthodox strategies that cities or developers can implement. Through research in this project, there are particular economic and political reasons why developers avoid investing in low-income housing. Another key finding from the study is there are different programs and risk-mitigation strategies that can limit risk in investment of low-income housing development. The main incentives and strategies found that developers can use to build more low-income housing are applying for Low Income Housing Tax Credit, applying for the Tucson Community Block Grant, identifying abandoned buildings to construct low-income housing, and taking advantage of Tucson’s GPLET program. The main strategies found that the City of Tucson can implement to promote low-income housing complexes are relaxing zoning laws, building more city-owned parking garages, and removing off-street parking requirements. Developers can use this project to determine a strategy and incentives that can be used to develop low-income housing, which Tucson desperately craves.