Phoenix explores new rules for developer tax incentives
Phoenix leaders are re-evaluating how to use tax incentives to spur redevelopment and address the housing shortage.
The Government Property Lease Excise Tax program is commonly referred to as GPLET. Several times, Phoenix has provided GPLETs for developers to build residential high-rises downtown.
As leaders look to add housing in other designated redevelopment areas, they may require recipients to offer 20% of units for low- to moderate-income households rather than the current 10%. City staff and elected officials often refer to those units as "affordable" and "workforce" housing.
Based on federal guidelines, affordable housing is for household incomes below 80% of the area median income while workforce housing is for household incomes between 80% and 120% of the area median income.
“They are getting a benefit and then the benefit for us would be to maximize our percentage,” said Vice Mayor Laura Pastor.
As chair of the city’s economic development subcommittee, she initiated discussions to create a formal GPLET program. Other requirements for the council to consider include incorporating public art and open spaces, and protecting historic buildings and existing neighborhoods, among other things.
“I know in the past it felt like we were using them here, there and everywhere without a lot of thought. Now we really have a process where we can dig into the issues and make sure we’re using our GPLETs in a meaningful way,” said Councilwoman Debra Stark.
The subcommittee will recommend the full city council approve the program for downtown and other designated redevelopment areas across the city.