Tempe is considering a density bonus program, which would allow new housing developments to gain additional height and density in exchange for developers setting aside a certain number of income-restricted affordable housing units.
Incentivizing developers to build affordable housing is simple enough to understand but the details are a bit complicated. These designated affordable units would be rented out to individuals and families making below a certain range of income, calculated as a percent of Area Median Income (AMI).
The amount of designated affordable housing required depends on the income range the units will serve, and the percentage required increases as the income range gets higher. A new development that receives twenty bonus units under this plan would set five units aside to be rented to those making up to 50% AMI. If the developer instead decided to rent to those making up to 80% AMI, 15 of those units would be designated affordable.
In exchange, developers can go beyond the maximum density their land is zoned for, up to the maximum allowed for in the General Plan’s projected density map. They can go beyond the maximum height in the underlying zoning. Additionally, there are reductions in the amount of required parking.
Less Can Be More
This program would benefit from making bonuses far more generous, and lowering the percentage of affordable units required. Our goal should be maximizing the total number of affordable housing built across the city, not the number built in a single development.
This might seem counterintuitive: doesn’t demanding affordability for larger percentages of the development mean more affordable units? The answer is no. If the demands from the city are too high, developers will walk away and no affordable homes will get built at all.
Instead, requiring a smaller number of affordable units per project and sweetening the incentives means more affordable housing gets built overall. It would be better to see hundreds of new affordable units built across Tempe instead of a handful that amounts to a high percentage in just one apartment complex.
A Better Bonus
The biggest danger is that a poorly designed affordability bonus not only fails to produce new units of affordable housing, but also stifles additional new housing that would bring costs down across the board.
This density bonus effectively locks away higher levels of density already approved by Tempe voters in the General Plan. This is a shame. If affordable housing is a true priority, the bonus should be a proper bonus, allowing density beyond the maximum in the General Plan.
We propose a 5-to-1 bonus, changing the affordability requirements to a simple ratio and capping the maximum density as a percentage above the maximum in the General Plan.
| Affordability Level | Bonus Units per Affordable Unit |
| Up to 80% AMI | 5 |
| Up to 65% AMI | 10 |
| Up to 50% AMI | 12 |
In addition to being a strong enough incentive to get affordable housing built, this system would allow developers to mix and match different levels of affordability in a single project.
There’s room to go further. While the city’s proposal reduces parking requirements for participating developments, they should be eliminated entirely. This would not mean apartments built without parking, but it would mean parking could be rightsized for a particular project rather than taking a one size fits all approach.
Parking mandates add significant cost to housing. The ratios used are, generously, based on junk science but often entirely arbitrary.
A Well Designed Density Bonus Could Achieve Two Crucial Goals
Increased density, height, and parking reductions are good policies unto themselves that create the conditions for widespread affordability, make our city more environmentally sustainable, and expand Tempe’s tax base.
We should not tie our hands on policy options and excessively withhold solutions to our housing crisis in the name of boosting affordable housing, especially if there’s a chance doing so won’t significantly increase affordable housing.
Nobody knows exactly the right ratio of incentives to affordability requirements to maximize the number of affordable units built. But erring on the side of building more homes has no downside.
A well-designed density bonus could achieve two complimentary goals if it is able to both boost the overall supply of housing in Tempe while simultaneously increasing the stock of designated affordable housing.
Give your feedback
You can take a minute now to provide feedback on the proposed ordinance. The survey is open until January 21st.
Our suggestions for improving the density bonus proposal:
- Replace the complicated bonus system with a simple 5-to-1 bonus that scales with the affordability level to make sure affordable housing actually gets built.
- Cap density at 25% above the maximum projected density in the General Plan. A bonus should be an actual bonus.
- Eliminate parking requirements entirely for projects that use the density bonus program.
There will also be the following meetings:
January 6, 2026 Public meeting via Zoom at 12 p.m.
Register for the meeting using this link.
January 6, 2026 Public meeting at the Tempe Public Library, Desert Willow Room, 3500 S. Rural Rd. at 6 p.m.
January 7, 2026 Presentation at the Neighborhood Advisory Commission at the Tempe Transportation Center, Don Cassano Room, 200 E. 5th St. at 6 p.m.
January 12, 2026 Presentation at the Sustainability and Resilience Commission virtually via Teams.
January 13, 2026 Presentation at the Transportation Commission at the Tempe Transportation Center, Don Cassano Room, 200 E. 5th St. at 7:30 a.m.
January 27, 2026 Study Session at the Development Review Commission at the City Council Chambers, 31 E. 5th St. at 5:30 p.m.
February 12, 2026 Presentation at the City Council Work Study Session at the City Council Chambers, 31 E. 5th St. at 4 p.m.
One response to “Tempe Proposes Affordable Housing Bonus Program”
In most cases this “bonus program” would actually reduce the amount of affordable housing in the city by providing incentive to redevelop the city’s affordable housing stock. the properties that filtered down to become relatively affordable are the properties that would be most at risk for redevelopment because they’re older properties. the city could actually lose 16,000 of low income units based on the density in the general plan. you have to subtract the original number of low income units that are at or below 80% AMI from the original project. I know because I checked specific properties that would be eligiable for this density “bonus” program