Medistar Commits to Affordable Housing Inclusion on Major Phoenix Project

The Phoenix city council approved Medistar Corp.’s $231 million proposed transit-oriented mixed-use project in Downtown Phoenix earlier this month in a five-to-four vote. Medistar Central Station, as it is called, will include a hotel, apartments, student housing and commercial space. As part of its proposal, the Texas-based developer agreed to reserve 5% of the project as workforce-affordable housing for a minimum of 10 years, which was not required by the city, and was based on requests from local residents.

“The Phoenix City Council wants to see housing for economically diverse groups in Downtown Phoenix,” Christine Mackay, director of Phoenix Community and Economic Development, tells GlobeSt.com. “When we’re reviewing proposals for development and city assistance is requested, the council now has a policy that at least 10% of dwelling units should be workforce-priced. We have some flexibility to balance the workforce-priced housing with other direct city benefits, but the housing should be part of the mix.”

The Phoenix city council was enthusiastic about the proposed project before the approval meeting, but the commitment to contribute to the city’s need for affordable housing certainly didn’t hurt the appeal of the project. “Central Station was submitted prior to the council setting a policy that inclusionary housing should be part of any project asking city assistance. Central Station met all of the development standards and quality features the council wanted for this transit-oriented development,” says Mackay. “Because no city assistance was sought by the developer, offering workforce housing was not required. I believe that the developer’s offer was found by the council to be a genuine effort to be part of the downtown community, and Council expressed its appreciation for such a stellar project.”

Medistar isn’t the first developer in Phoenix to offer to include affordable housing in a new development. Downtown Phoenix has a robust development pipeline and other developers have also chosen to voluntarily include an affordable housing component. “The last two residential developments to be proposed, Palm Court by Arizona Center and now Central Station, both offered to include workforce-priced housing without being required to do so,” says Mackay. “I believe that this sets the bar for future residential development in the downtown and central areas of Phoenix.”

This trend is setting an important bar for a city currently experiencing rapid growth and housing appreciation. “When a keystone project, like Central Station, agrees to include workforce-priced housing within a luxury multifamily tower, it’s an important precedent because it sets a standard that other developers will want to meet,” Mackay says. “We believe that other developers will want to match, or even exceed the threshold set by Medistar.”