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Scottsdale City Hall

On Wednesday, Arizona State Rep. Matt Gress declared victory is his ongoing battle for taxpayers after the Arizona Department of Housing decided it will not be enforcing a controversial homeless housing contract with the City of Scottsdale.

Gress, Chairman of the Joint Legislative Audit Committee, argued that a provision in the contract was likely illegal.

The provision would have authorized the City to use state funds to house homeless people from “The Zone” in downtown Phoenix, and foreign nationals who otherwise would have been expelled under Title 42. in a hotel close to Pima and Indian Bend Roads. The City was previously awarded a $940,000 grant from the Department of Housing to carry out the terms of the contract.

The Department has now admitted to Representative Gress, that, despite the terms of the Contract, it does not intend to enforce “The Zone” or the “Title 42” provisions of its Contract with the City.

“This is a victory for the safety and well-being of Scottsdale’s residents, many who staunchly oppose their tax dollars being spent to house homeless from other cities and foreign nationals who should have been deported under Title 42,” declared Representative Gress, who has led efforts to stop Scottsdale’s homeless hotel plan. “I maintain serious concerns regarding the city’s intentions to utilize area hotels for this purpose and intend to pursue this matter further. Soon I will announce details of a public subcommittee hearing where I plan to delve more deeply into the problematic approach of converting hotels to housing for homeless.”

Gress’ letter to Joan Serviss, Director Arizona Department of Housing in part:

In the City’s grant application, the City wrote that it intends to rent a “[m]aximum of 15 [hotel] units” from a hotel in Scottsdale and designate “33% or 5” of these rooms for individuals relocated from “the Zone” encampment in Phoenix and foreign nationals who entered Arizona at the border after Title 42 was lifted. As I explained in my initial letter to the City, this type of hotel program comes with significant risks, is highly questionable as a matter of policy, and has failed elsewhere.

As the Contract itself states, the Department’s authority to execute the Contract derives from A.R.S. § 41-3953 and Senate Bill (“S.B.”) 1720. Arizona law directs the Department to establish programs “to address the affordable housing issues confronting this state, including housing issues of low-income families, moderate income families, housing affordability, special needs populations and decaying housing stock.” A.R.S. § 41-3953(A). In the budget for the 2024 Fiscal Year, the Legislature appropriated funds to the Department “for programs that provide shelter and services to unsheltered persons who are experiencing homelessness.” S.B. 1720, Sec. 104 (2023).

The Contract purports to allow the City to “continue expanding its bridge housing program with a contracted hotel within city limits and provide contracted supportive services and meet basic needs of food and drink to individuals, and moreover, serve those impacted by the Zone and Title 42 between Arizona and Mexico through referrals from the Continuum of Care Coordinated Entry Points for seniors aged 62 and older and single parent families.” Contract, Attachment A (emphasis added). The City informed me that it has never operated its existing hotel program to serve people outside of the local community and that the provision requiring service to those impacted by the Zone and Title 42 “was a State imposed provision within the grant.”

Nothing in state law or S.B. 1720, however, authorizes the Department or the City to use state monies to action,” assume “the responsibility of coordinating the transportation and processing of migrants to reduce the burden on our border communities” and “[f]inalize the guidance” of the U.S. Department of Homeland Security (“DHS”) Shelter and Services Program” to ensure that the federal policies “prioritize border states on the front lines” of the Title 42 crisis.

I do not know if the Biden Administration responded to Governor Hobbs’ letter. It appears unlikely, given that the Department’s Contract with the City to authorize housing in a Scottsdale hotel for Title 42 foreign nationals was executed roughly six weeks after Title 42 ended.

To be clear, if the federal government is failing to meet its legal obligations, financial responsibilities, or commitment to house migrants who enter at the border, those burdens do not fall on Arizona’s taxpayers.

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