Scottsdale’s “Otherness” Undermines Valley Livability

Grayhawk Residences at Cavasson will be the next multifamily development proposal targeted for organized opposition by Protect Scottsdale, according to information on the group’s website. Image Credit: ORB Architecture, LLC/City of Scottsdale

By Roland Murphy for AZBEX

Much has been made about the Valley’s growth and the crisis-level need to add vastly more housing than we are currently delivering.

Analysts put demand levels at between 15,000 and 17,500 new multifamily units per year to meet our 2030 needs. The development and construction market has not come anywhere close to those numbers since the Great Recession. Estimates put 2021’s likely deliveries at around 11,500.

Because of the massive imbalance between supply and demand, nowhere in the Valley can make any legitimate claim of general affordability. Metro Phoenix has been a consistent leader in rent growth in recent years. An August 2021 report from RealPage showed a 21.6% year-over-year increase in rents. In July, the multifamily occupancy rate hit an all-time high of 97.3%.

Neither level is sustainable, and the only cure is increased inventory – not only of cost-adjusted, officially designated “affordable housing,” but raw supply of more units of all types. The more units, and the greater density, the more affordable any given address will become.

While there are myriad challenges facing the industry – with materials cost inflation, skilled labor shortages and land availability gaining most of the news coverage – as we have pointed out in our last two issues development fatigue and organized resistance are growing impediments.

Unfortunately for the area, that resistance has found a fertile field in which to take root in one of the Valley’s major suburbs.

Scottsdale: The Ground Zero of Development Opposition

As we have explored in recent columns (AZBEX  Nov. 30thDec. 3rd), the entire Valley is experiencing a kind of development fatigue. New projects of nearly every type are going up all over town, and there is a tiredness among many people caused by the rate of change – both in terms of development and the sheer volume of life and lifestyle impacts of the last couple years.

Scottsdale, however, has become an entrenched battleground against the forces of change, even when that change is an overall net positive for the city, its residents and the greater metropolitan community.

Three of the largest apartment plans to encounter organized resistance recently have been District at 9400 Shea, 92 Ironwood and Greenbelt 88. Despite project developers making multiple revisions to their proposals to accommodate area (and out-of-area) residents’ concerns, opposition groups have forced all three into holding patterns.

While anti-development and revitalization forces have usually targeted infill development in long-established areas, citing the standard worries about traffic, density and the ever-present opponent battle cry of “impacts to neighborhood character,” leading opposition group Protect Scottsdale has let it be known on its website the Grayhawk Residences at Cavasson proposal in the far north of town will also be a target.

The four developments would deliver a combined total of more than 1,200 multifamily units to the Scottsdale market. While that boost to supply is certainly not enough to take care of the whole area’s need, it is more than a drop in the bucket.

Unfortunately for affordability and demand satisfaction, opponents have an entrenched set of allies in the Scottsdale City Council and Mayor’s office.

Including those listed as “On Hold,” DATABEX shows 27 multifamily developments in the planning-to-pre-construction stages in Scottsdale and 19 under construction. Even though 2020 was the embodiment of exceptional circumstances, Yardi Matrix shows zero projects delivering in the city last year. It is also worth noting nearly all the multifamily developments approved in Scottsdale were approved by the previous City Council.

The previous mayor and council were staunchly pro-development and “modernization,” approving a variety of projects across types that were intended to reshape the city from an archaic, primarily single-family residential suburb into a modern and thriving economic powerhouse. That drive produced significant cultural backlash in large, and vocal, segments of the population, however, eventually coming to a head following the approval of the Southbridge 2.0 redevelopment master plan that would have vastly altered the Old Town canal area.

Successful backlash against the project empowered opposition forces in Scottsdale and directly contributed to the election of the current mayor and council, both of which have come out in opposition to “high-density” development and in favor of preserving Scottsdale’s “distinct character.”

The “Distinct Character” Myth

From Mayor David Ortega down to random Nextdoor commenters, maintaining and preserving Scottsdale’s distinct character is a driving force in the opposition to functionally dense modern development, particularly when it comes to apartments. Nailing down what constitutes that character becomes challenging, though, when looking at details of what “makes” the area.

Mayor Ortega was recently quoted in an Arizona Republic article that said, “Living in Scottsdale comes with a (per Ortega) ‘cost premium for our beauty, public safety, clean maintenance, and where health-conscious families and business can thrive.’”

All those criteria are subjective, and their factual bases are largely dismissible by an objective observer. Scottsdale’s primary identity point is that it is “different from” or “better than” other area suburbs, an assertion that often invites derision from residents in other cities and has earned the city the nickname “Snobsdale.” It is difficult-to-impossible to find any objective criteria for Scottsdale’s superiority – the city’s roads are no smoother, its water no purer nor is its sewage more pleasantly fragrant than any other suburb.

With a median household income of $88,213, it is the richest of the major suburbs, but Chandler is right on its heels at $82,915, according to the U.S. Census Bureau. With a median age of 47.7 years, though, Scottsdale is also the oldest major suburb. This time, Chandler is a distant second among the major suburbs, with a median age of only 36.3 years. That older population may well be a major contributor to the resistance to change.

The little-used but still claimed nickname of, “The West’s Most Western Town,” is still cited from time to time as a marketing bullet, more by older residents than by City staff, but the city lost the last vestige of credibility on that front when Rawhide left for greener pastures in 2006. The only dubious holds on any kind of “Western” distinction are some horse-focused estates in the far north of town and some themed shopping in Old Town. Unfortunately, a miniscule percentage of residents who can and do own, ride and equip $10K trail horses and a cluster of merchants selling overpriced silver and turquoise trinkets to tourists do not a “Western” town make.

Scottsdale does have comparatively low crime rates. According to the most recent FBI violent crime numbers, the city has only 165.52 violent crimes per 100,000 people (0.166%). Then again, Phoenix – with its vastly greater area, population and markedly lower median household income of $57,459 – only has 732.57 violent crimes per 100,000 people (0.733%). Even Tempe, with a highly transitory and much younger population (29.5 years) thanks to Arizona State University, only has a violent crime rate of 484.24/100,000 (0.484%). At the city level, at least, violent crime is simply not a major threat in the Valley. From “super safe” Scottsdale to “dense and dangerous” Phoenix, fewer than one person in 100 will experience a violent crime in any given year.

In terms of property crimes, the FBI numbers also show Scottsdale at the low end with 2,228.97/100,000. Even with nearly the same population and half the land area, however, Chandler is lower, with a rate of 2,121.21.

Scottsdale’s public amenities are nothing particularly special either. For example, only 40% of residents live within a 10-minute walk of a public park, according to data from The Trust for Public Land. Phoenix, with more than six times the population and a bit less than 3 times the area, has access for 49% of its population. Mesa, with a $30K lower per capita income, roughly double population and 50 sq. mi. smaller area, has a 66% rate of 10-minute park access.

Developing in Scottsdale is ‘Different’

Regarding multifamily development, City staff and officials have claimed developers have a greater challenge before them because Scottsdale insists on higher quality construction and materials than other locations. This is demonstrably false. Because of the high demand for market-rate housing, fully 90% of new apartment development around the Valley has been in the top two tiers for at least the last five years. The “quality” Scottsdale demands and cites as an entry barrier is, in fact, the base-level standard of development dictated by basic market demand at the moment.

Mayor Ortega has also repeatedly claimed Scottsdale’s infrastructure cannot support major increases in density. This also does not hold up to scrutiny. A fundamental reality of urban planning is more dense development makes more efficient use of infrastructure, not less. For Ortega, a licensed architect, to press that claim seems incongruous at best, disingenuous at worst.

An October 2020 GlobeSt.com article on the impacts of multifamily opposition quoted Pauline Hale of Altus Group as saying, “Often the NIMBYs rely on untrue rhetoric around the housing situation. There are misunderstandings around concepts like workforce housing, not supportive housing, and increasing density, which does not increase traffic. If you can afford to live where you work, there is less inbound traffic in a community.”

One argument not mentioned by opponents but touched upon in our last column is the higher property tax revenues generated by dense development versus single-family. In a city as focused on wealth and quality of life as Scottsdale, one would think a greater municipal revenue stream, perhaps to improve that access to amenities issue, might be a greater point of concern than it currently appears to be.

The ‘Them and Us’ Mentality

Perspective is a major identity dividing point.

While development fatigue and resistance are growing across the Valley, in Scottsdale it is both a social and political way of life, woven into the very ethos of the city’s cultural identity.

Many older residents recall a time when Valley cities were less interconnected. Once upon a time, Valley cities truly were distinct and separate. Major throughways like Indian School Road once had unpaved sections between the developed portions of Phoenix and Scottsdale. That stopped being the reality decades ago.

Wealth is also part of the Scottsdale gestalt, and in the social media age, the comments fly furiously. In a Nextdoor thread about Scottsdale urbanization, one user wrote: “Hey! If they can’t afford to buy a piece of land and build a single family home in Scottsdale they need to go elsewhere. We do not want cheap apartments in our backyard.”

Being comprised of a markedly older and wealthier population than most of the rest of the Valley, Scottsdale’s self-identity as the removed island it once was is understandable. It is not, however, sustainable. Nor is it grounded in modern reality, given the Valley’s evolution over the last 30, or even the last five, years.

Longer term residents around the Valley have been forced to adapt to a massive and ongoing influx of new residents from around the country, particularly California. These new arrivals have not been indoctrinated to see Scottsdale as anything particularly special. To a freshly transplanted observer, Scottsdale can easily be perceived as an island of richer, more hostile old people and higher costs of living not offset by any particular benefit. To them, the city’s greatest lifestyle offering may well be the Old Town Entertainment District, a place to eat, drink, be merry, and leave once the lights come up. Even that once vaunted area is losing ground and prestige as entertainment-centric districts gain better traction and lay deeper roots in other parts of the metro.

While we are primarily talking about multifamily development and residents, that now-versus-then dichotomy crosses industries and real estate sectors. There are few remaining industries outside of resorts and personal wealth management that draw any particular cachet from a Scottsdale address.

Real estate, financial services and other traditional high wealth businesses have come to see Phoenix’s Camelback Corridor, from 24th St. to 44th St. as the “it” spot. Startups and tech companies want to be in Downtown Phoenix, or as close to Arizona State University as possible.

Partly because of its older population, Scottsdale has long been considered a healthcare hub. However, the Phoenix Biomedical Campus in downtown Phoenix and a long-term economic development vision from ASU, the City of Phoenix, Mayo Clinic and other partners to develop the north side of Mayo Boulevard between Tatum Boulevard and 64th Street into the Arizona Health Solution Corridor have undercut Scottsdale’s healthcare leadership status significantly.

A Hostile Work (and Living) Environment

Unfortunately for the Valley overall, Scottsdale’s development and density opposition results in a kind of economic parasitism. In the Republic article mentioned above, Mark Stapp, executive director of the Master of Real Estate Development program at ASU’s W.P. Carey School of Business was genteelly quoted as saying Scottsdale’s resistance to developing the kind of denser, more abundant housing that would make the city more livable for more people makes it an “economic free rider.”

The reality of Scottsdale’s circumstance borders on feudalism.

A Scottsdale Progress article in September covered a City Council work study session in which Scottsdale Community Assistance Manager Irma Hollamby reported 83% of people who work in Scottsdale live elsewhere, in part because of the city’s lack of housing options they can afford.

The same Republic article that quoted Stapp also quoted Courtney Gilstrap LeVinus, president of the Arizona Multihousing Association, as saying, “Individuals like teachers and nurses and people who want to live in Scottsdale to be close to where they work, or where they go to school, are going to be unable to live in Scottsdale and will have to move because there’s not enough housing and it’s unaffordable. Unfortunately, this NIMBY activism is creating a long-term threat to Scottsdale and the ability for people of all walks of life and all income levels to live there.”

Feudalism, as we all (should) remember from our junior high European history modules, was an economic system in the Middle Ages where large populations of peasants served a small population of wealthy nobility who believed they had been granted their superior status by Divine Right. Feudalism collapsed, in part, due to cultural shifts and impacts of disease.

We have touched upon the cultural shifts taking place in the Valley, particularly in terms of in-migration of residents from other regions. Let us now take a look at the impacts of disease, particularly the COVID pandemic.

According to Choose Scottsdale, the City’s economic development outlet, the city’s top industries, by occupation class, are:

  • Healthcare and social assistance,
  • Professional, scientific, technical services,
  • Retail Trade,
  • Finance and insurance,
  • Educational services and
  • Accommodation, food services.

It is interesting to consider the relative ease with which workers, particularly in the accommodation/food services and healthcare industries, can find work elsewhere with a minimum of effort. The impacts of the pandemic on every sector, but particularly these two – given Scottsdale’s dependance on them – also cannot be overstated.

Many hospitality workers – hotel staff, servers, bartenders, etc. – were forced to find other work in the pandemic. Many have not returned. For those who have come back, the potentially higher tips earned from working in Scottsdale may well be offset by today’s rapidly rising inflation, which most do not expect to be short-term regardless of national leaders’ claims.

When rent, food costs and every other living expense – particularly the gas costs associated with a 30-minute one-way commute to and from a home one can afford – eat up all the additional money one might make working at a Scottsdale resort versus the neighborhood Applebee’s four minutes from one’s front door, wherein lies Scottsdale’s appeal?

Post-pandemic, nurses and healthcare workers have become acutely aware of their worth, both in terms of compensation and social regard. What is there to keep the hundreds of nurses and other healthcare workers at the Shea Blvd. Honor Health Medical Campus now that opposition groups and their backers in City leadership have forced two projects (District at 9400 Shea and 92 Ironwood) that would have provided more than 500 residential units in immediate proximity to the hospital into protracted, perhaps permanent hold? 92 Ironwood even received a statement of support from the Arizona Nurses Association, one of the leading industry trade groups, and still it was badgered into a pause.

With the City decisively saying nurses’ needs were of less importance than the nostalgia-fueled resistance of vociferous residents, it is difficult-to-impossible to imagine why a nurse would stay when he or she could transfer to another hospital in a Valley city that considers them valuable enough to accommodate.

Scottsdale has repeatedly demonstrated it has no desire to accommodate the workers who serve it. If income can no longer be a driving factor, wherein lies the motivation to serve Scottsdale tourists and residents rather than one’s own neighbors? Scottsdale’s dismissive attitude toward the workers who enable it to function could very well crush that “thriving” status Mayor Ortega so proudly touted, particularly as every other city in the Valley continues to refine and expand their quality of life amenities and work toward providing more housing.

The current realities are these:

  • Dramatic additions to supply are essential to affordable living for nearly every economic class;
  • Most other cities have caught up to Scottsdale in terms of amenities and quality of life for residents;
  • Market rate, high-end apartments can now find a home in any city in the Valley;
  • The high costs of protracted approval processes – both in dollars and time, and the reduced likelihood of approval in sufficient density to let projects pencil out, will reduce developer willingness to bother with Scottsdale, and
  • When it loses residents to support local businesses and developers to infuse new money, as it will if its current trends continue, Scottsdale will fade in both prestige and economic power among Valley cities.

With the growth and increasing wealth of cities around the Valley – cities that embrace responsible development and ordered density – one thing is clear: Scottsdale needs development more than developers need Scottsdale.

3 Comments

  1. Perfection. Extremely thorough and well written with style. I will be sharing this with many of my Scottsdale neighbors. This is what I’ve been trying to articulate. We’ll done.

  2. I’ll say this – I grew up on the west side and built a home for my family in the new upper middle class areas of Peoria in the early 2000s. I’ve since recently moved to Scottsdale and after 2 years here – I will likely head back to Peoria. I’ve never faced ruder neighbors in my life. No consideration for anyone that lives around them. Sure people are wealthy here – but that just means they can be even more inconsiderate because they have the funds to pay the noise ordinance fees and then continue one being idiots.

  3. I have lived in my home since Sept ’63 it’s located in South Scottsdale we were considered middle class this is the only house we have owned. We love our home & have taken pride in our residence we raised 4 daughters in this house. My husband & I loved what Scottsdale had to offer young families they are treasured memories but it has changed so much but that’s what happens as time moves on it’s so sad to see families today can not afford to move in the homes that are in South Scottsdale we have grandchildren that would love to live in our area but can’t afford it bringing young families back into South Scottsdale it would be so rewarding to carry the tradition down to young families living in a neighborhood where all the neighborhood played together & walked to school together like it used to be

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