Phoenix is the fifth-largest city in the United States and the fastest-growing city in the country. For Mayor Kate Gallego—the second elected female mayor in Phoenix history and, at 39, the youngest big-city mayor in the United States—navigating that growth means prioritizing economic diversity, investments in infrastructure, and sustainability.
Gallego was elected in March 2019 to complete the term of a mayor who was heading to Congress, then reelected in November 2020. As a member of the Phoenix City Council, she led the campaign to pass a citywide transportation plan for Phoenix through 2050, which represented the country’s largest local government commitment to transportation infrastructure when it passed in 2015.
Before entering politics, Gallego worked on economic development for the Salt River Project, a not-for-profit water and energy utility that serves more than 2 million people in central Arizona. Just days after her reelection, Mayor Gallego spoke with Senior Fellow Anthony Flint. The interview kicks off a series of conversations with mayors of cities that are especially significant to the Lincoln Institute, which is celebrating its 75th anniversary in 2021. An edited transcript follows; listen to the full interview on the Land Matters podcast.
Anthony Flint: Congratulations on your reelection. What issues do you think motivated voters most in these tumultuous times?
Kate Gallego: Voters were looking for candidates who would deliver on real data-driven leadership and science-based decision-making. I come to this job with a background in economic development and an undergraduate environmental degree. My chemistry professor told us that the more chemistry you take, the less likely you [are] to move up in electoral politics. But I think 2020 may have been a different year where science matters to voters . . . Arizona voters wanted leadership that would take COVID-19 seriously, as well as challenges such as climate change and economic recovery.
For younger voters in particular, climate change was a very important issue. I ran for office as my community faced our hottest summer on record. In some communities, climate change may be a future issue, but in Phoenix, it was an issue facing us right now. Different generations describe it differently. So my dad tells me, if you can just do something about the heat in the summer here, you’ll definitely be reelected. A different lens, but I think the same outcome.
AF: How has the pandemic affected your urban planning efforts? Did it surface any unexpected opportunities?
KG: The pandemic really changed how people interact with their communities. We saw biking and walking more than double . . . what people tell us is they didn’t realize how much they enjoyed that form of moving about our communities, and they intend to keep some of those behavior changes . . . . We’re currently looking at how we can create more public spaces. Can we expand outdoor dining and let people interact more with each other?
Dr. Anthony Fauci has told us that the more time we can be spending outdoors, the better for fighting COVID-19. But that also has other great benefits. I serve as mayor of the city with the most acres of parks of any United States city, and this has been a record year for us enjoying those Phoenix parks . . . You can be in the middle of Phoenix on a hiking trail and some days you don’t see anyone else. So those amenities and the focus of our planning around parks has really improved this year.
We also continue to invest in our transportation system. We’ve decided to speed up investment in transit, which was a decision that we did have real debate over, that I think will allow us to move towards a more urban form. We’ve actually seen increased demand for urban living in Phoenix. We have more cranes in our downtown than ever before and we are regularly seeing applications for taller buildings than we have seen before. I understand there’s a real national dialogue about whether everyone will want to be in a suburban setting, but the market is going in a different direction in our downtown right now.
COVID-19 has also made us look at some of the key challenges facing our community such as affordable housing, the digital divide, and addressing food security, and we’ve made significant investments in those areas as well.
AF: Many might think of Phoenix as a place with abundant space for single-family homes, where a house with a small yard and driveway is relatively affordable. Yet the city has a big problem with homelessness. How did that happen?
KG: Phoenix competes for labor with cities such as San Francisco and San Diego and others, that still have a much more expensive cost of housing than we do. But affordable housing has been a real challenge for our community. Phoenix has been the fastest-growing city in the country. Although we have seen a pretty significant wage growth, it has not kept up with the huge increases in mortgages and rent that our community has faced. It’s good that people are so excited about our city and want to be part of it, but it’s been very difficult for our housing market.
The council just passed a plan on affordable housing including a goal to create or preserve 50,000 units in the next decade. We are looking at a variety of policy tools, and multifamily housing will have to be a big part of the solution if we are going to get the number of units that we need. So again, that may be moving us towards a more urban form of development.
AF: Opponents of the recent light rail expansion argued it would cost too much, but there also seemed to be some cultural backlash against urbanizing in that way. What was going on there?
KG: Our voters have voted time and time again to support our light rail system. The most recent time was a ballot proposition [to ban light rail] in 2019 shortly after I was elected. It failed in every single one of the council districts; it failed in the most Democratic precinct and the most Republican precinct in the city. Voters sent a strong message that they do want that more urban form of development and the opportunity that comes with the light rail system. We’ve seen significant investments in healthcare assets and affordable housing along the light rail. We’ve also seen school districts that can put more money in classrooms and in teacher salaries because they don’t have to pay for busing a significant number of students. We have really been pleased with its impact on our city when we have businesses coming to our community. They often ask for locations along light rail because they know it’s an amenity that their employees appreciate. So I consider it a success, but I know we’re going to keep talking about how and where we want to grow in Phoenix.
Phoenix, Arizona, is the fifth-largest city in the United States, and the fastest-growing city in the country. Credit: Jerry Ferguson via Flickr CC BY 2.0.
AF: We can’t talk about Phoenix and Arizona without talking about water. Where is the conversation currently in terms of innovation, technology, and conservation in the management of that resource?
KG: Speaking of our ambitious voters, they passed a plan for the City of Phoenix setting a goal that we be the most sustainable desert city. Water conservation has been a Phoenix value and will continue to be. The city already reuses nearly all wastewater on crops, wetlands, and energy production. We’ve done strong programs in banking water, repurposing water, and efficiency and conservation practices, many of which have become models for other communities.
We are planning ahead. We have many portions of our city that are dependent on the Colorado River, and that river system faces drought and may have even larger challenges in the future. So we’re trying to plan ahead and invest in infrastructure to address that, but also look at our forest ecosystem and other solutions to make sure that we can continue to deliver water and keep climate change front of mind. We’ve also had good luck with using green and sustainable bonds, which the city recently issued. It was time to invest in our infrastructure . . . partnerships with The Nature Conservancy and others have helped us look at how we manage water in a way that takes advantage of the natural ecosystem, whether stormwater filtration, or how we design our pavement solutions. So we’ve had some neat innovation. We have many companies in this community that are at the forefront of water use, as you would expect from a desert city, and I hope Phoenix will be a leader in helping other communities address water challenges.
AF: Finally, if you’ll indulge us: we will be celebrating our 75th anniversary soon; our founder established the Lincoln Foundation in 1946 in Phoenix, where he was also active in local philanthropy. Would you comment on the ways the stories of Phoenix and the Lincolns and this organization are intertwined?
KG: Absolutely. The Lincoln family has made a huge impact on Phoenix and our economy. One of our fastest-growing areas in terms of job growth has been our healthcare sector, and the HonorHealth network owes its heritage to John C. Lincoln. The John C. Lincoln Medical Center has been investing and helping us get through so many challenges, from COVID-19 to all the challenges facing a quickly growing city.
I want to recognize one Lincoln family member in particular: Joan Lincoln, who was one of the first women to lead an Arizona city as mayor [of Paradise Valley, 1984–1986; Joan was the wife of longtime Lincoln Institute Chair David C. Lincoln and mother of current Chair Katie Lincoln]. When I made my decision to run for mayor, none of the 15 largest cities in the country had a female mayor; many significant cities such as New York and Los Angeles still have not had one. But in Arizona, I’m nothing unusual. I’m not the first [woman to serve as] Phoenix mayor and I’m one of many [female] mayors throughout the valley. That wasn’t true when Joan paved the way. She really was an amazing pioneer and she’s made it more possible for candidates like myself to not be anything unusual. I’m grateful for her leadership.
Anthony Flint is a senior fellow at the Lincoln Institute of Land Policy and a contributing editor of Land Lines.
Photograph: Phoenix Mayor Kate Gallego has pursued an ambitious sustainability agenda for the city. She was reelected in November 2020. Credit: Mayor Kate Gallego via Twitter.
The city of Phoenix, America’s fifth-largest metropolis, is going through some major changes—in demographics, voting patterns, and the physical landscape that has long defined the region.
In this episode of the Land Matters podcast, Phoenix Mayor Kate Gallego, reelected to a second term in November, reflects on a supercharged political season, the battle against COVID, and how, among other changes, Phoenix is becoming a more sustainable, and more urban, place. Historically known for sprawling suburban development, the city is taking steps to conserve water, moving forward on extensions of its light rail network, and increasing its commitment to providing affordable housing.
Phoenix has long been a fast-growing region, but the pace has picked up recently, Gallego says, as new residents flock there – some simply seeking relief from more expensive cities, others untethered from offices by the pandemic and taking advantage of the flexibility that working remotely provides. “We’ve seen many people voting with their feet and coming to our community,” she says.
Given that influx, maintaining affordability is one of the key drivers of a move towards “a more urban form,” she says. Under her leadership, the city is shifting toward more multifamily housing and greater height and density downtown, all served by the growing light rail network. Residents are increasingly asking for these features, she says—and the added benefit is that kind of growth is more sustainable.
The interview with Phoenix Mayor Kate Gallego is available online and will be available in print, as the latest installment of the Mayor’s Desk feature—interviews with chief executives of cities from around the world.
Creating Mortgage Assistance Programs That Work: Lessons From the Great Recession
By Liz Farmer, October 28, 2020
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As the pandemic wears on and unemployment remains in the high single digits, nearly 10 million Americans are now either behind on their housing payments or have little confidence they will be able to make their next payment on time. Federal and state moratoriums stopped evictions and foreclosures temporarily, but simply hitting a pause button won’t keep people in their homes—and many worry that a housing crisis is looming as these protections expire.
As cities and states work to keep people from losing their homes, they could learn from some of the lesser-known responses to the Great Recession. The experience of two states that invested in mortgage relief can offer guidance for places that may be wondering how to implement this kind of assistance effectively—and how to keep it going when the immediate public health emergency winds down and federal funds dry up. Their experience indicates the investment can pay huge dividends, not only to the homeowner but also to society at large.
Oregon Homeownership Stabilization Initiative
In Oregon, an agency created to administer federal funds demonstrated how to adapt a program over time to keep it effective through a yearslong crisis. One of the first state programs launched with federal funds from the $8 billion Hardest Hit Fund (HHF), the Oregon Homeownership Stabilization Initiative (OHSI) has so far helped more than 16,000 families keep their homes via more than $300 million in direct assistance, primarily in the form of no-interest, five-year, forgivable loans. As long as homeowners do not sell their homes or refinance them for cash, 20 percent of the loan is forgiven each year; after five years, the entire loan is forgiven.
Oregon was one of 18 states that tapped the HHF, which the Obama administration created in 2010 to stave off a second foreclosure crisis. The HHF assisted nearly 400,000 homeowners across the country through 2019, and the vast majority received direct assistance on their mortgage. Unlike other federal foreclosure programs, HHF did not require that homeowners be delinquent on their mortgages to receive assistance—a feature of state and some local pandemic housing assistance funds today that’s intended to provide relief quickly, before the problem becomes acute.
Each state had the flexibility to create its own program, as long as it aligned with the federal guidelines. This flexibility was a key component, as Oregon officials quickly found that they needed to adapt their program design to ensure equal access to assistance, said OHSI administrator Carmel Charland. One of the first adjustments they made was in response to the volume of applications they received. During the program’s first two months, OHSI received roughly 20,000 applications—a number so overwhelming, the initiative temporarily closed the application portal. Eventually, they shifted to opening the portal every other week and capping the number of applications.
That helped the workflow, but administrators realized residents in rural areas that lacked access to high-speed internet weren’t getting an equal shot at submitting an application. So they granted rural areas access first and allocated a certain number of slots by county.
By 2015, Oregon’s housing market had stabilized and the economy had generally recovered, so OHSI’s assistance shifted toward things like helping homeowners renegotiate and pay off back taxes or a second lien on their home. A principal reduction program has helped homeowners on a fixed income pay off or reamortize their loans to make housing more affordable. By the end of 2016, the OHSI program had a 92 percent retention rate, meaning more than nine out of 10 homeowners stayed in their homes, Charland noted.
Oregon effectively adjusted its program through the years, evolving from an urgent response to homeowners facing foreclosure during the Great Recession to a stable resource for households facing new financial hardships with limited options, said Jess Wunsch, an urban planner and Lincoln Institute of Land Policy research assistant. “They were innovative in several ways, and by creating multiple programs, they essentially were able to continue helping people through whatever iteration of assistance was needed most to prevent foreclosure,” said Wunsch.
Administrators in Oregon had time to adapt in part because the HHF made funding available for many years. Indeed, new research shows that the HHF successfully kept people in their homes, in part due to the long-lasting nature of the program. A working paper published earlier this year by researchers from Ohio State University, Washington University in St. Louis, and the University of North Carolina at Chapel Hill found that homeowners who received HHF money were 47 percent less likely to be in default after 12 months. What’s more, the reduced risk of mortgage default persists for at least two years after assistance ends. In short, one in four of these assisted homeowners would have entered foreclosure in severe default absent the HHF program, the study concludes.
Timing is critical. A foreclosure intervention at the beginning of an economic shock can have an important ripple effect, the authors of the working paper said, noting that avoiding severe defaults resulted in about $9 billion in cost savings to lenders, investors, the secondary market, and local governments. “This does not include,” the authors added, “the benefit to individual homeowners of retaining ownership in their homes and preventing damage to their consumer credit, nor spillover effects on local property values.”
One Chicago-area study from 2005 expands upon the notion of spillover costs to municipalities and residents living near a foreclosed property. The research paper, commissioned by the Homeownership Preservation Foundation, estimated a foreclosure could directly cost local government agencies more than $34,000 and reduce nearby property values and home equity by an additional $220,000.
“Foreclosure prevention programs allow families to maintain the home equity they have built while preventing widespread displacement that would negatively impact households and communities,” Wunsch said. “This is particularly important for lower-income households and households of color who are most likely to be impacted during an economic downturn and have historically been excluded from homeownership in this country.”
Oregon was winding down its program in accordance with HHF guidelines in 2020 when the pandemic hit. Treasury granted OHSI an extension on its use of federal funds, and the initiative used that extension to open a COVID-19 Mortgage Relief program.
In the current recession, states have received billions in federal Coronavirus Aid, Relief, and Economic Security Act (CARES Act) funds, including housing assistance. But a spending deadline of December 31, 2020, has left governments scrambling to spend what they can while the public health crisis itself is adhering to no such end date. The $2.2 trillion stimulus bill approved by the House of Representatives on October 1 includes $50 billion in emergency rental assistance funds and a homeowner assistance fund with up to $80 million for each state. But the Senate had not taken it up at press time, and the prospects of any new federal aid are uncertain. So how can a state keep an assistance program running, given the unpredictability of federal funding? Pennsylvania’s temporary mortgage payment assistance program, a state-funded program that dates to 1983, demonstrates one strategy states can use to create a more lasting policy response to the moment.
Pennsylvania’s Homeowners’ Emergency Mortgage Assistance Program
In Pennsylvania, the Homeowners’ Emergency Mortgage Assistance Program (HEMAP) provides loans to homeowners that must be repaid with interest, which differentiates it from the HHF. This allows HEMAP to recover a large share of its costs. Between 2007 and 2010, loan repayments represented roughly half of the program’s funding, according to the Pew Charitable Trusts; the balance came from state appropriations.
The repayment requirements still produce highly effective outcomes. A 2011 analysis by the Federal Reserve Bank of New York found that HEMAP had kept 80 percent of participants in their homes. The New York Fed also estimated the cost of running HEMAP was significantly cheaper than running federally funded programs: just 22 cents on the dollar.
Despite the documented successes of the program, however, state funding has been sporadic, making it vulnerable to cuts during or after recessions. In fact, in 2012 the Pennsylvania Housing Finance Agency temporarily suspended the program because of funding shortfalls.
This year, Pennsylvania allocated $175 million of its $39 billion in federal CARES Act funding for housing assistance, setting aside $25 million of that for a new Pandemic Mortgage Assistance Program to be used this year. The process slowed because the state’s enabling legislation included a multitude of requirements for applicants, according to a spokesman for the agency, but the state housing agency pushed back against these requirements. As a result, the legislature allowed the agency to move the assistance application deadline a month later than it was originally slated, to November 4, and to waive a requirement for applicants to be 30 days in arrears, among other changes.
The future of mortgage assistance funding is in question, but it’s clear the need for such assistance will remain. As Pennsylvania has shown, mortgage assistance programs can be sustained even in the absence of federal help. And Oregon’s experience shows the benefits of adapting the needs and types of assistance as the economy changes.
“There’s so much more experience available now for how to create better processes and address those bigger systemic problems of how to be more resilient,” said Charland of OHSI. “That’s the legacy of the Hardest Hit Fund: how we can do the next thing better.”
Liz Farmer is a fiscal policy expert and journalist whose areas of expertise include budgets, fiscal distress, and tax policy. She is currently a research fellow at the Rockefeller Institute’s Future of Labor Research Center.
Image: Adaptability to changing circumstances is key to helping homeowners avoid foreclosure, according to states that have run successful mortgage assistance programs. Credit: Taber Andrew Bain via Flickr CC BY 2.0.
The Lincoln Institute's C. Lowell Harriss Dissertation Fellowship Program assists PhD students, primarily at U.S. universities, whose research complements the Institute's interests in land and tax policy. The program provides an important link between the Institute's educational mission and its research objectives by supporting scholars early in their careers.
The Fair Housing Act—passed in 1967, just seven days after the assassination of Dr. Martin Luther King, Jr.—sought to end discrimination in housing in the United States. But as the economic and social turbulence of 2020 has reminded us, the law’s provisions have not been enough to undo decades of policies and procedures that have essentially locked in residential segregation.
So says Lisa Rice, president and CEO of the National Fair Housing Alliance in Washington, DC, the latest guest on Land Matters, the podcast of the Lincoln Institute of Land Policy.
“Communities have got to look at housing opportunities through a lens of race and racial equity,” Rice says. “You’ve got to take a look at what are the barriers that are precluding people from being able to access fair housing opportunities, and look at that very honestly.”
The deck has long been stacked against Black and brown people seeking safe and decent housing, Rice says. When the Civil War ended, a short-lived land redistribution program for formerly enslaved people gave way to local laws and restrictions that made it virtually impossible to own land and a home.
The Great Depression prompted another opportunity to expand homeownership opportunities, with the National Housing Act of 1934, the creation of the Federal Housing Administration, and the new availability of federally backed home financing. But those programs set in motion the color-coding, or redlining, of neighborhoods that continues to this day.
Understanding the long history of discriminatory housing policies in the United States can help us make sense of how housing has become an issue in this election year, Rice says, and is critical to making meaningful and lasting changes.
The Lincoln Institute of Land Policy invites proposals for studies on the barriers to implementing housing strategies at the scale needed to address the housing affordability crisis in the United States, and strategies to overcome those barriers.
The Lincoln Institute seeks to better understand how multipronged housing strategies, which include several policies working in tandem, can more effectively promote affordability and build community support for housing reforms.
Applications are due by email on or before September 30, 2020 by 11:59 p.m. (EST).
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