Tucson Standard

Published on June 10, 2024

The Arizona Department of Housing is awarding the City of Tucson $2,500,000 in LIHTC funding to build 66 affordable housing units on North Stone Avenue. This Low-Income Housing Tax Credit (LIHTC) is the second tax credit granted to the City’s Housing and Community Development Department (HCD) in two years as part of the City’s Housing Affordable Strategy for Tucson (HAST).

The new development, Sugar Hill on Stone, will serve as replacement housing for residents of Tucson House, the City’s largest public housing facility. It is also a key component of the Thrive in the 05 initiative, which aims to bolster public and private investments in the Oracle Road and Miracle Mile area.

“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 Romero.

The new development will feature one-, two-, and three-bedroom units in three- and four-story buildings. Amenities include a playground for children of different ages, multi-purpose rooms, and community rooms designed for services and community needs.

“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 spans 1.3 acres in Ward 3, located on a lot previously occupied by Bum Steer Nightclub. The name “Sugar Hill on Stone” was suggested by neighborhood residents to honor Sugar Hill's history as one of Tucson’s historic black neighborhoods where post-World War II black families could buy homes.

Ward 3 Council Member and Vice Mayor Kevin Dahl praised 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.”

In July 2023, Tucson was selected to receive a $50 million Choice Neighborhoods Implementation (CNI) grant from HUD. This grant supports efforts to create over 600 new or rehabilitated housing units while enhancing neighborhoods within Thrive in the 05.

Sugar Hill on Stone represents another successful project developed by El Pueblo Housing Development, Tucson’s non-profit development arm. El Pueblo will collaborate closely with Gorman & Company, a national affordable housing firm serving as the Housing Implementation Entity for Thrive in the 05 Choice Neighborhoods Implementation Grant.

In 2022, HCD received a $2.1 million LIHTC allocation for Milagro on Oracle—a 63-unit project for older adults built at No-Tel Motel's former site—marking El Pueblo's first development effort.

Both Sugar Hill on Stone and Milagro on Oracle align with HAST adopted by Mayor Romero and Council in December 2021. The strategy outlines a comprehensive plan increasing investment in housing affordability while addressing climate resiliency and social equity priorities.

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