Here’s how downtown Phoenix is balancing housing development with affordability

Cranes in the air, and the sounds of construction seemingly never ending: How much housing is coming to downtown Phoenix?

Fifteen residential buildings are currently under construction in downtown Phoenix, set to bring 3,589 more housing units to the area upon completion over the next few years. 

Fourteen already existing buildings are solely affordable housing developments, while five buildings downtown include a percentage of their units—5 to 13%—to be dedicated to workforce housing. This means the downtown area has one of the highest concentrations of affordable housing communities in Phoenix. 

Workforce housing is housing deemed affordable for households earning between 60 and 120% of area median income, and is often targeted to middle-income workers like police officers, firefighters, teachers, health care workers, and retail clerks. 

“I think what people have grown to realize is to have a vibrant and vital downtown we need to have housing that is for everyone,” said Sheila Harris, co-chair of Phoenix Community Alliance’s Social Housing & Advancement Committee.

The Phoenix Community Alliance works towards preserving housing affordability as downtown Phoenix continues to be developed, and the group is working with the city to develop city-owned sites into housing, Harris said. 

Where is the workforce housing?

Three of the 16 buildings currently under construction will have workforce housing units upon completion. 

Palm Tower

• Expected to be completed in 2024
• Located at Fifth Street and Van Buren Street
• Ten percent of its units will be dedicated as workforce housing over an eight-year period as part of the development agreement with the city of Phoenix

X Roosevelt

• Expected to be completed in 2025
• Located on Second Avenue between McKinley and Fillmore streets
• Will include 37 workforce housing units out of its 370 total units, as defined by the development agreement with the city of Phoenix

Central Station

• Expected to be completed in 2025
• Located on Van Buren Street between First Avenue and Central Avenue
• Seven percent of its 655 units will be allocated as workforce housing

X Phoenix 

• Located on Monroe Street and Third Avenue
• The development’s first phase that has been completed offers 10% of its units as workforce housing, part of a development agreement with the city of Phoenix 
• Its second phase is currently under construction with completion to-be-determined, but does not offer any workforce or affordable housing 

The government property lease excise tax (GPLET) is the agreement each development has with the city of Phoenix. 

The GPLET creates a tax incentive for developers to build affordable or workforce housing in downtown Phoenix, but fewer private developers are requesting or expressing the need for it as the area becomes more vibrant and dense, Majerle said. 

A project that will begin construction soon, the Astra, will be making a donation of $5.5 million to the city’s housing trust fund, instead of committing a percentage of residential units to workforce housing. 

A growing demand

The population downtown—defined as the area between Seventh Street and Seventh Avenue, from McDowell Road on the north to Buckeye Road on the south—grew from 24,000 people in May 2024 to 25,118 in August 2024, gaining 1,118 residents in just one summer. That’s up from a population of just over 9,000 people in 2000. 

In the last nine years, 7,749 units have been built in downtown Phoenix, and nearly 3,000 were finished in 2022 and 2023. 

But these units can be tough to afford. The average rent in downtown Phoenix is $1,962, compared to $1,522 in the city of Phoenix, according to RentCafe. 

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More than half of extremely low income, very low income, and low income renters in Phoenix are cost burdened, meaning they spend more than 30% of their income on housing costs and utilities in 2022, according to the National Low Income Housing Coalition.  

“We do realize that downtown doesn’t feel affordable for anyone and everyone who wants to live downtown yet, but with the apartment complexes that are under construction, what’s coming, and the work that the city is doing to bring true affordable housing development into downtown, we feel like that balance will return,” Devney Majerle, president and CEO of Downtown Phoenix Inc., said. 

Making downtown living attractive and attainable 

Downtown Phoenix used to be a place where people would come into the city to work, and then it would become a ghost town once people would go home, Harris said—and bringing more housing to the area brings livability and safety to the city.

“You don’t want everybody having to commute in from the farthest suburbs to work in entry-level jobs because where they can afford to live is miles and miles and miles away from their employment,” Harris said. 

Phoenix’s public transportation might not be on the same level as Chicago or New York City, but it can become more efficient and widespread, Harris said. 

“I hope that we continue to think about the livability and the walkability in our downtown community,” Harris said. “It not only helps the environment, but it just makes it so much easier than getting in a car, driving somewhere, and finding a parking spot. I think it’s much more efficient, the more we can walk, bike, and scooter around town.” 

Majerle said the city lost about a decade of development due to the Great Recession, which has led to the current boom in construction, including a significant amount of affordable housing already downtown. 

“Downtown is the core of the city and really the heart of the state,” Majerle said. “Anyone who wants to live downtown should be able to live downtown. Anyone who wants to live, work, learn, and create in downtown should be able to.”

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