Lincoln Avenue Communities Starts Phoenix-Area Affordable BTR Project
This is the affordable specialist's first such development in the sector.
Lincoln Avenue Communities has started construction on The Ranches at Gunsmoke, a 271-unit affordable single-family-rental housing community located in Maricopa, Ariz. The affordable housing specialist is developing the project in partnership with WNC & Associates. The development, slated for completion next year, will offer living spaces to households earning no more than 60 percent of the Area Median Income.
The Ranches at Gunsmoke is Lincoln Avenue’s first build-to-rent project. The property will include two- and three-bedroom duplexes and standalone single-family houses, each with a patio space, walk-in closets and private fenced backyards.
Common area amenities at The Ranches include a fitness center, pool, grilling areas, a clubhouse, and rentable storage units. A solar carport system will offset about 50 percent of the community’s electricity usage, according to Lincoln Avenue.
The development comes two weeks after Lincoln Avenue’s groundbreaking on Ironwood Ranch Apartments, another Lincoln Avenue project. It’s a 252-unit affordable housing project also in Maricopa, Ariz. The development will feature two-, three-, and four-bedroom units available to households earning less than 60 percent AMI.
The Ranches at Gunsmoke’s financing package was put together late last year. It includes construction and permanent loans from Citibank, along with $65 million in tax-exempt bonds issued by the Arizona Development Authority. Also part of the financing is $49 million in Low-Income Housing Tax Credits and solar equity from WNC. Solar equity financing allows businesses to invest in the property’s solar systems in return for tax benefits and other incentives.
Lincoln Avenue now has over 800 units of affordable housing under way in Pinal County.
A subsidiary of Lincoln Avenue Capital, Lincoln Avenue Communities has a presence in 28 states and a portfolio of about 155 properties comprising more than 27,000 units. WNC specializes in tax credit syndication, affordable housing development and preservation equity fund investments. The company has acquired roughly $18.2 billion in assets nationwide, including more than 1,800 affordable rental properties.
Phoenix fundamentally short on affordable housing
These are tumultuous times for greater Phoenix’s multifamily market. In the market-rate sector, a massive amount of development is beginning to impact the market, with vacancies rising and rents falling. Matthews Real Estate Investment Services reports that about 23,000 units are under development as of the first quarter of this year, accounting for 5.5 percent of existing inventory.
Even so, that doesn’t change the fact that greater Phoenix is much less affordable than it used to be. In 2024, the Arizona Research Center for Housing Equity and Sustainability at the Morrison Institute for Public Policy reported that the impact of the significant slowdown in residential construction in the years after the Great Recession – when the area’s population was expanding rapidly – is still being felt.
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Multifamily rents in Arizona increased by 72 percent from 2010 to 2022. By 2022, nearly half of all renters were cost-burdened, the highest percentage of cost-burden since 2010, the Arizona Research Center found.
The city’s government appears attuned to these struggles. In May, the Phoenix City Council approved a $2 million investment in the Housing Trust Fund, bringing it to a total of $3.2 million. This move will accelerate the development and preservation of affordable housing in that city, as well as support partnerships with nonprofits and community developers focused on housing. This is the first time that the city has contributed directly to the Housing Trust Fund, rather than relying on the contributions of others.
