'We want to create more than the four walls of a home': $100M affordable housing fund launched with Arizona's big health care companies
A $100 million fund to spur more affordable housing for Arizona's rapidly growing population of homeless and low-income residents launched this week with the help of Medicaid and other healthcare providers.
The Home Matters Arizona Fund already has drawn $37 million in grants and project financing to help develop at least some of the nearly 200,000 affordable homes needed in the state.
The investment to help solve Arizona's growing affordability problem is important, but what's unique is that it's not just about housing.
The money aims to reduce homelessness and address racial inequities in housing, as well as to advocate for affordable housing and renters’ rights.
“We want to create more than the four walls of a home to improve the lives of residents,” said Joe Gaudio, CEO of UnitedHealthcare Community’s West region and fund contributor. “We must focus on the social determinants of health and create supportive ecosystems for people where they live, learn, shop and work."
He said projects that would be at the front of the line to receive funding would:
- be near light rail and bus lines.
- be near retail, jobs and health care services.
- offer free internet access.
- provide day care.
- offer job training and educational help for residents.
United has seen the benefits of housing that comes with "supportive ecosystems."
The health insurance provider helped fund a west Phoenix affordable housing project with 100 apartments and supports for residents, that it says has improved lives and the bottom line for government-supported health care costs.
Combining health care with housing
UnitedHealthcare officials described the turnaround of a man in his early 50s, who was homeless, sick and without a job when he moved into the Residences, the west Phoenix apartment complex redeveloped into affordable homes by Chicanos Por La Causa and UnitedHealthcare two years ago.
The man has multiple sclerosis, cerebral palsy, diabetes and no readily available transportation to medical appointments. His average monthly AHCCCS or Arizona Medicaid costs approached $13,000 a month when he moved into the Residences.
The man's health coach Amy Fynmore worked with him daily tracking his vitals, encouraging him to join support groups and guiding him to tap into behavioral health, probation, transportation and other services the affordable housing community provides.
By early 2019, the man's AHCCCS costs dropped to about $2,100 a month, and his emergency room visits plummeted from 81 visits to 12 visits a year. His health is now stable, and he pays rent for his apartment.
National research from the Center on Budget and Policy Priorities shows health care costs for people living in affordable homes with these types of support systems can fall significantly.
The Home Matters Arizona Fund started with collaboration among companies that are part of the Arizona Association of Health Plans, insurers and health care providers that contract with the state’s Medicaid program.
More than $2 million of the housing fund’s grants come from Arizona Complete Health, Banner – University Health Plan, Care1st Health Plan Arizona, Health Choice Arizona, Magellan Complete Care of Arizona, Mercy Care, NARBHA Institute (formerly Northern Arizona Regional Behavioral Health Authority) and UnitedHealthcare.
Aetna, Dignity Health, CVS Health and UnitedHealthcare also have committed $35 million in low-interest rate debt financing for “shovel-ready” affordable housing projects that meet the fund’s criteria.
Developers can combine the money with government and private financing.
Homes give strength and resiliency
The Home Matters affordable housing fund will invest in developments that help low-to-moderate income residents making less than Arizona’s median income.
Projects must serve veterans, seniors, the homeless, people with disabilities, individuals involved with the justice system or those eligible for AHCCCS.
The Home Matters affordable housing fund will invest primarily in developments that help low-to-moderate income residents making 80% to 120% of Arizona’s median income.
These households are more likely than other renters to sacrifice necessities like healthy food and healthcare to pay the rent, said Dave Brown, co-founder of Home Matters, which is part of a national movement to improve housing.
These households also are more likely to experience evictions, said Brown, who serves on the advisory council for the Home Matters Arizona Fund.
“Home is fundamental to the strength of our state and our country," Brown said. “Homes support people’s identities, protect and nurture families, and serve as the base for stronger communities and a more resilient Arizona.”
He pointed to Las Abuelitas Family Housing and Community Center, developed by the Primavera Foundation in Tucson, as an example of what the fund wants to do in Arizona.
The 12-home community, created for grandparents raising grandchildren through foster care or adoption, includes a computer lab, playroom, library, community kitchen, garden and basketball play area.
Peggy Hutchison, chief executive of Primavera, said developers must consider people and place when building affordable housing. "We all have basic needs, and we all are different," she said.
“In the Las Abueliatas neighborhood, a lot of three-generation families led by Latinas wanted safe and affordable homes with a place children could go to eat, learn and play."
Growing need for affordable homes
In downtown Phoenix, the nonprofit Native American Connection developed the Urban Living on 2nd rental community to provide affordable homes near light rail and jobs.
Reynaldo Galindo is grateful.
The single father raising two sons under 12 was moving frequently and living with friends before finding a home in the affordable apartment complex last fall.
Galindo, an Airbnb cleaner, and his sons, now live in a three-bedroom apartment in the 70-unit complex, where monthly rents average less than $700 and don’t rise above 35% of renters' incomes.
New apartments in nearby complexes rent for more than twice as much. The average monthly rent for a one-bedroom apartment in downtown Phoenix is more than $1,200.
“It’s great to not be moving around, trying to share rooms with friends,” Galindo said. “Our neighbors all reached out to us when we moved in. We are finally home.”
His home with free Wi-Fi is an a secure-gated community with a playground, free covered parking and a fitness center. It also has community and education programs.
A new Fry’s grocery store is within a few blocks of the Urban Living on 2nd apartment complex, which has a waiting list.
The wait list speaks to Arizona's growing affordable housing problem.
- About 20% of Arizona rental households are extremely low income, and 73% of these very low-wage earners spend more than half of their incomes on housing, according to Home Matters.
- Overall, about 45% of metro Phoenix renters pay more than 30% of their income for a home, according to a new study from Joint Center for Housing Studies of Harvard University.
- Housing costs above 30% of a household’s income are considered unaffordable, because it doesn't leave enough money for food, health care, transportation and education.
- To afford a modest two-bedroom rental in Maricopa County, a family needs to earn $42,000 a year or $20 an hour, according to the National Low Income Housing Coalition.
- ·A typical housekeeper in metro Phoenix would need to make another $16,000 a year to afford that home, reports the Urban Land Institute.
COVID-19 worsens housing crisis
Arizona's housing situation is only compounded by the novel coronavirus pandemic.
Thousands of Arizonans struggling to pay rent because of the pandemic could lose their homes this summer when Gov. Doug Ducey's order to delay evictions expires on July 22.
Renters who were sick with COVID-19, lost jobs or had to stop working because schools were closed have had a reprieve since late March. But with unemployment claims rising and slow distribution of state rental aid, many tenants could be on the brink of losing their rental homes if assistance doesn't come faster.
Eviction filings in metro Phoenix are down about 10,000 since March, compared to last year’s pace, due to Ducey’s moratorium issued in late March. But landlords who need to pay their own bills could quickly move to evict renters who haven’t paid when the moratorium expires later this month.
Those tenants will be competing with the already fast growing group of people trying to find affordable housing in Arizona.
Arizona housing costs have jumped three times as fast as incomes have increased during the past five years.
"We had a growing affordable housing and homeless crisis before COVID. It could get a lot worse fast," said Sheila Harris, former director of the Arizona Department of Housing. “The new fund created by our health care industry is a very welcome and innovative addition to help we need now.”