City Awarded $2.5 Million For Affordable Housing

Published on June 10, 2024

Sugar Hill on Stone empty lot

The Arizona Department of Housing is awarding the City of Tucson $2,5 million in LIHTC funding to build 66 affordable housing units on North Stone Avenue. This Low-Income Housing Tax Credit, or LIHTC, is the second tax credit granted to the City’s Housing and Community Development Department (HCD) in just two years to build affordable housing as part of the City’s Housing Affordable Strategy for Tucson (HAST). 

The new development, Sugar Hill on Stone, is another important piece of the Thrive in the 05 initiative, which will strengthen public and private investments in the 2.3 square mile Oracle Road and Miracle Mile.

 “This is what we promised people we would do, and we are delivering. My priority has been to aggressively pursue LIHTC funds and create more opportunities for housing that people can afford,” said Tucson Mayor Regina Romero.

“Working with the neighborhood who selected the name Sugar Hill on Stone, we are bringing the second affordable housing development made possible thanks to our City’s El Pueblo Housing Development. Congratulations to Housing and Community Director Ann Chanecka and the entire HCD team on putting together another competitive application to bring more housing affordability to Tucson. This project speaks to Mayor and Council’s broader vision for affordable housing in our City, and our approach to layering local, state, and federal investments,” added the Mayor.

The new development features one-, two- and three-bedroom units in three-and four-story buildings, a playground for children of different ages, and multi-purpose and community rooms to be used for services and community needs so families and children can thrive.

“HCD is very excited for this tax credit allocation as Sugar Hill on Stone is an important part of our Choice Neighborhoods Housing Strategy,” said HCD Director Ann Chanecka. “Sugar Hill on Stone will be designed with families in mind as it is near Mansfield Park and the Donna Liggins Recreation Center, it is on the future bus rapid transit line, near Pima Community College’s Downtown campus, and across the street from Tucson Youth Development.”

The project site, 1.3 acres in Ward 3, is located on the lot once occupied by the Bum Steer Nightclub. Neighborhood residents suggested the name “Sugar Hill on Stone” to honor the history of Sugar Hill, one of Tucson’s historic black neighborhoods, and one of the few areas in Tucson where post-World War II black families could buy a home.

Ward 3 Council Member and Vice Mayor Kevin Dahl lauded the $2.5 million tax credit.

“This allocation of tax credits will allow the city to move forward, working with a private partner, to build much needed affordable housing at an ideal location, where the need is great,” said Dahl.

In July 2023, the City of Tucson was selected to receive a $50 million Choice Neighborhoods Implementation (CNI) grant from the U.S. Department of Housing and Urban Development (HUD). This highly competitive grant will propel the City’s efforts to create more than 600 new or rehabilitated housing units, establish an extensive support system for residents in Tucson House and enhance neighborhoods in the Thrive in the 05.  

El Pueblo Housing Development 

Sugar Hill on Stone is the second successful project developed by the City of Tucson’s non-profit development arm, El Pueblo Housing Development. El Pueblo will work closely with Gorman & Company, a national affordable housing company who is the Housing Implementation Entity for the Thrive in the 05 Choice Neighborhoods Implementation Grant.  

Milagro on Oracle 

In 2022, HCD received a $2.1 million LIHTC allocation to build Milagro on Oracle, a 63-unit housing project for older adults. Milagro on Oracle, built on the site of the former No-Tel Motel, is the City of Tucson’s first development by its non-profit development arm.  

Housing Affordability Strategy for Tucson 

Sugar Hill on Stone, like Milagro on Oracle, and other HCD housing developments, are part of the City’s Housing Affordability Strategy for Tucson adopted by Tucson Mayor and Council adopted in December 2021. The 10-point roadmap lays out a comprehensive strategy to increase investment in housing affordability that aligns with other important priority areas such as climate resiliency and advancing social equity.  

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