If you think housing costs in Arizona are outlandish, you're not alone.
Less than 43 percent of Arizona families make enough money to pay for a median-priced house, according to the Department of Commerce. Only 62 percent can afford the median rent.
Residents paying more than 30 percent of their income for housing are described as having a housing problem. Right now in Arizona, that number is 1.25 million people.
Data like that put pressure on the state to create the new Housing Department this year. Built out of programs in the Department of Commerce, it will operate as the Governor's Office of Housing Development beginning in January.
By October 2002, it will be the fully-fledged Arizona Department of Housing.
"Forget about the past," Steve Capobres, director of the ADOC's Housing and Infrastructure Division, told a Verde Valley forum Tuesday.
The department will utilize some of the same programs under which it now operates at ADOC. However, those charged with getting the department off the ground are actively seeking ideas for new programs the department might be able to finance. That includes looking at successful programs in other states and ideas from local organizations.
The forum in Cottonwood drew representatives from area governments and non-profit organizations. Attendees were from as far away as Page and discussed such issues as housing programs for the homeless and for women coming out of domestic violence shelters. The Department of Commerce has been holding forums around the state to inform the public of the changes and opportunities to expect.
"We have set the standard at the Department of Commerce of letting you know what's available," Capobres said. "We cannot finance these projects without your consent."
New programs for which the new department could have authority include single- and multi-family tax-exempt bonds, residential taxable bonds, Housing and Urban Development Risk Sharing and a HUD project-based Section 8 program. The Arizona Housing Finance Authority goes into effect Jan. 1.
Capobres pointed out that tax-exempt bonds are the second biggest source of financing for affordable housing.
Third on the list is the Low Income Housing Tax Credit Program. According to ADOC, that generated $44 million last year to assist in the creation of 10,000 units. That has supported more than $500 million for the construction industry.
Martina Kuehl, a technical assistant for the Commerce Department who has also been working with the City of Cottonwood on a housing strategy, clarified that most of the state's housing funding is from federal resources with all of the expected strings attached.
The department will have $172 million in funding for the first year. More than 60 percent of that is earmarked for rental housing. To set aside one misconception about the new department, Capobres said it will not be focused only on rural areas but rather on the needs and issues statewide. And, instead of being a typical government bureaucracy, he said the Housing Department seeks to be different.
"We know it's frustrating to the public to try to find where all of these programs are," he said.
Jerry Owen, community development director in Cottonwood, said his staff has no time to find the resources to tap into available programs and suggested the department offer technical assistance in that area.
As it forms, the department intends to become more involved in public communication and information. Capobres also said there will be more of an effort to lobby the state's legislative delegation about housing issues, as well.
Three main issues often highlighted by those in the housing division are availability, conditions and affordability. The new department seeks to narrow the gap between what a household can pay and the actual cost of housing.
"We're a public lender," he said. "We're becoming a bank."
A problem that has presented itself in the rental market revolves around projects originally subsidized by HUD. The projects had price restrictions built into the agreements that stipulated lower rents. However, those restrictions ended after 30 years, resulting in ballooning rents now. The challenge, according to Capobres, is to convince the project landlords to extend the contracts.
A study by the Arizona Housing Commission last year found that 44 percent of all renters are living in substandard or overcrowded conditions or are paying more than 30 percent of their income for rent.
Twenty percent of homeowners are in the same predicament, according to the study.
The study found that a household must have an income of at least $45,000 to afford a median-priced home. Fifty percent of Arizona households have incomes under $35,000.
For more information about the budding Arizona Department of Housing (ADOH), visit www.azcommerce.com.
Programs changing from Department of Commerce to Department of Housing
• Low Income Housing Tax Credits
• Arizona Housing Trust Fund
• HOME Investment Partnerships Program
• Community Development Block Grants
• Housing & Shelter Plus Care
• Housing Opportunities with People with AIDS
• Public Housing Authority, Section 8
• ACTION, Neighborhood Commission
New programs in the Arizona Department of Housing
• Single-Family Tax-Exempt Bonds
• Multi-Family Tax-Exempt Bonds
• Residential Taxable Bonds
• HUD Risk Sharing
• HUD project-based Section 8 Administrative Plan