Housing Trust Funds expanding opportunities for Homeless statewide
Report on status of projects that benefited from additional 2020 appropriation

During the 2019 legislative session, the State Housing Trust Fund (HTF) received an appropriation of $15 million to be provided in FY2020. In a typical year, the fund receives $2.5 million through a legislated transfer from the State’s Unclaimed Property Fund, fee income generated through the State’s single family mortgage program, as well as loan repayments, interest, and other resources that are deposited in the account from time to time.

Because the Department’s constituents had emphasized a need for additional resources for those experiencing homelessness, the Arizona Department of Housing designated the funding for the expansion of efforts to address homelessness around the state. We are pleased to report here on the status of these efforts.
 

The Birch Building located on the Arizona State Hospital campus in Phoenix

Transitional Shelter with Mental Health Focus –
New beds for Chronically Homeless Individuals with Serious Mental Illness or General Mental Health Issues

Studies show that individuals living with serious mental illness (SMI) and general mental health issues experience homelessness at higher rates. Once homeless, these individuals have a harder time successfully moving into housing, and often end up chronically homeless. To address this barrier to successful rehousing, the Department is working in partnership with the Arizona Department of Health Services/Arizona State Hospital (ADHS/ASH), and the Arizona Health Care Cost Containment System (AHCCCS), to provide a transitional shelter specifically aimed at helping this population. The Department has issued a RFP for an Operator to manage the facility and arrange for needed services for individuals who participate. Proposals are due October 30, and the Department expects to begin working with a selected Operator later this fall.

The Department has allocated $3 million in HTF to prepare the Birch Building for its new mission. Located on the perimeters of the Arizona State Hospital campus on 24th Street in Phoenix, the Birch Building is currently used as office space. Improvements will be made by the State, and the selected Operator will enter into a lease with the Arizona State Hospital for the space once the facility is ready for use in mid-2021.
 

U.S. VETS partners with Gorman & Company to Develop Veterans Housing at Fort Whipple in Prescott

Veterans Housing at the Northern Arizona VA Health Care System Facility
Housing for formerly homeless Veterans at Historic Fort Whipple in Prescott

When an opportunity presented itself to provide much needed affordable housing units for formerly homeless veterans at the historic Fort Whipple VA facility in Prescott, the Department jumped at the opportunity to partner with the U.S. Department of Veterans Affairs (VA) on this project. As the Public Housing Authority servicing Yavapai County, the Department has worked with the VA staff headquartered at the Northern Arizona VA Health Care System facilities for a number of years, in assisting homeless veterans obtain housing through the Section 8 VASH voucher program. One of the most difficult aspects of administering the Yavapai County VASH program has been finding affordable units for participants. Program participants have also typically needed support services that are delivered at the VA, so locating much needed housing on the beautifully situated campus made sense.

The project will utilize a federally available opportunity called an Extended Use Lease, which provides long-term leases to developers to build and operate affordable housing through the use of underutilized federal land and buildings. The federal government issued a RFP in late 2019, and selected Gorman & Company in 2020, to develop several vacant acres, as well as former officer’s quarters, into veterans housing at Ft. Whipple. The developer is currently working out lease and financing arrangements, and expects to partner with the Department to utilize 4% Low-Income Housing Tax Credits, along with $3 million in HTF. Additional financing is expected to be provided through a private activity bond issuance through the Arizona Industrial Development Authority, as well as other resources. The project is expected to be completed in 2022.
 

Permanent Supportive Housing for formerly Homeless
Expanding Collins Court in West Phoenix

In late 2019, the Department issued a Notice of Funding Availability (NOFA) to provide financing for the development of Permanent Supportive Housing for formerly homeless populations. $3 million from the HTF was set-aside for the NOFA, along with federal resources, for a total of $10 million. This summer the Department awarded Arizona Housing, Inc. more than $5.7 million, made up of the $3 million in HTF and the balance in federal funding, to expand its Collins Court apartment complex which is located in West Phoenix. 32 new units will be added to the existing property. Construction is expected to begin in 2021.

The NOFA remains open for submissions at this time.
 

Center of Hope Apartments in Tucson

Center of Hope Apartments
100 affordable rental units located at the Center of Opportunity in Tucson

In 2019, the Center of Opportunity Homeless Campus opened in Tucson, on the grounds of a former hotel. The Gospel Rescue Mission operates a 150-bed homeless shelter on-site, and Phase I includes a medical clinic, multi-agency office for supportive services, job training center, and a small park.

The 100 unit Center of Hope Apartments will be developed through the repurposing of the previous hotel room tower by La Frontera. In addition to $2.5 million in HTF set aside specifically for this project, the project will be utilizing additional Department resources available through the 4% Low-Income Housing Tax Credits, funding from the Arizona Health Care Cost Containment System (AHCCCS), bond financing from the Pima County Industrial Development Authority, and HOME funding from Pima County. 

The project will be under construction during 2021.
 

Secure Behavioral Health Residential Facility
$3.5 million awarded by AHCCCS

This fall, the Arizona Health Care Cost Containment System (AHCCCS) awarded $3.5 million for the construction of two Secure Behavioral Health Residential Facilities that will eventually offer 32 units between two properties, for individuals with Serious Mental Illness who have been court ordered into a secure setting. The $3.5 million set aside by the legislature for this project was transferred from the Department to AHCCCS who oversees housing resources with a behavioral health focus.

The Department expects that in the end, this $15 million will result in nearly 300 newly created units that will help address the need for more residential opportunities specifically designed to aid formerly homeless individuals. Over the years this investment will make a profound difference in the lives of countless Arizonans, and help them to go on to live more secure, successful lives.

Housing Matters | Fall 2020