The CHIPS Act transforms an Arizona neighborhood (2024)

About 7 miles south of a massive construction site where Taiwan Semiconductor Manufacturing Co., the world’s biggest chipmaker, is building three factories, one neighborhood is undergoing dramatic change.

The Golden Triangle — as at least one real estate developer calls it — occupies about a half-mile square in Phoenix, Arizona. It has about 100 houses, connected by mostly dirt roads. In addition to the human residents, many of whom moved there in search of a rural lifestyle, it’s home to horses, goats, cows, donkeys, chickens, bees and a 16-year-old tortoise named Crush.

But the economy of the Golden Triangle is getting an overhaul. Three new apartment complexes, with a combined 852 units, have been approved for construction inside its borders. Developers and city officials say the housing is needed, in part, to meet demand driven by the semiconductor industry.

As part of our ongoing series “Breaking Ground,” about how federal government investment is changing the economy in complicated, invisible and contradictory ways, Marketplace looked at the impact of the CHIPS and Science Act on Phoenix.The landmark legislation is part of the government’s plan to rebuild the semiconductor industry in the United States

Residents, business owners and city officials each have their own interests in this development cycle. To explore how the changes are fanning the flames of competition among them, “Marketplace” host Kai Ryssdal spoke with these stakeholders in the Golden Triangle.

Click the audio player above to hear the story.

The small-business owners

Toward one corner of the Golden Triangle, there is a freshly built strip mall with a Mexican restaurant, a nail salon, a day care center and a couple of other small businesses. Its construction was part of a wave of commercial development in the area.

Kat Blaz, the owner of a Bricks & Minifigs franchise, which sells new and used Lego products, opened her store about 2½ years ago. “I was so excited when I found out what was going in behind us,” she said, referring to the planned apartment complexes. “It’s hard nowadays for brick-and-mortar [businesses] to survive with all the online shopping, and so the fact that we can get more foot traffic is awesome,” she said.

One door down, Yvette Stumpf, the owner of a salon franchise specializing in haircuts for kids, hopes the neighborhood’s new residents will bring more traffic to her business as well. But she has mixed feelings about how development is changing the neighborhood. “I see that as a boon to my business because it’s more people,” she said. “However, I also do not like the big-city feel, and we still feel like country.”

Those competing feelings — hopes for the benefits of development and the desire to retain the neighborhood’s character — reflect an ongoing battle over the future of the Golden Triangle as federal investment accelerates the changes.

The real estate developer

Real estate developer Charles Eckert is in the second category of stakeholder — he built the strip mall Blaz and Stumpf’s stores are in. “We’ve taken raw desert, basically, and turned it into this,” he said, gesturing toward the busy intersection.

“There were no curbs, no gutters, no sidewalks. The road was two lanes wide. That was a dirt road right there, and there was nothing here,” he said. “I’ve been developing in this area for 20 years.”

As more businesses invested in north Phoenix — some lured by state tax incentives — Eckert saw potential in that triangle. “That’s why I invested my entire net worth into this area,” he said.

Now, those bets seem to have paid off. He attracted a convenience store, an AutoZone, a Brakes Plus, a storage facility, a day care center and all the small businesses in that strip mall.

Last year, he sold some of his remaining land in the Golden Triangle to an apartment development company for $2.8 million. When making the case to the Phoenix City Council for a five-story apartment complex on that parcel, a representative for the developer cited its proximity to TSMC, the giant semiconductor producer.

“You’ve just got to look around and look at the commercial development that was coming here and say, ‘There will be housing demand here,'” Eckert said.

The neighbors

Laurel Brodie, who lives about 800 yards from Eckert’s strip mall, remembers what this neighborhood looked like before developers like him arrived.

“We’re in what used to be the middle of the desert,” she said. Brodie’s husband and father-in-law bought property here in the 1970s. They were among the first residents in the neighborhood.

Brodie showed Ryssdal an aerial photograph of her house from 1990, when the surrounding area was almost entirely undeveloped. “There’s nothing in this,” Ryssdal observed. “You can see all the way to the mountains.”

Although Brodie acknowledges that development in the area was inevitable, she and a group of her neighbors tried, and failed, to fight Phoenix City Hall about the planned apartments inside the bounds of their unincorporated island on county land.

They argued that high-density housing — especially a five-story apartment building —is inappropriate for the area. “Even the ones on the freeway don’t go up that high, and yet they find it appropriate to put five stories right here,” Brodie said.

“It’s rather threatening to my way of life,” said Alison McKee, who lives down a dirt road from Brodie and joined her in the resistance effort.

McKee and her husband bought their property about 12 years ago because they wanted land where they could have a horse. Now, in addition to the horse, the McKees have five donkeys, 26 chickens, 18 goats (nine kids and nine adults), a dog, a barn cat and a rotating cast of foster donkeys from a local rescue.

In the years since the McKees moved in, a megachurch was built across the street and shopping centers and apartments sprang up down the road. It’s clear that more will be coming with the investment in semiconductor plants.

“We do feel like we will be bowled over,” McKee said. “So am I the weird old lady that stands her ground and holds out? … Only time will tell.”

The city

Because both Alison McKee and Laurel Brodie’s properties sit on unincorporated county land, they do not pay Phoenix city taxes and cannot vote for Phoenix City Council candidates. But the city is getting closer and closer to them.

Councilwoman Ann O’Brien, who represents the district that includes TSMC and the Golden Triangle area, is responsible for balancing the competing interests. She supported the proposed apartment developments.

“You might know, we have a little bit of a housing shortage here, not just in Phoenix but the entire state of Arizona,” she told Ryssdal. “And one of my commitments when I ran for office in 2020 was to ensure that we brought a diversity of housing.”

The Phoenix metropolitan area, already among the fastest-growing in the nation, received a wave of new residents during the pandemic, exacerbating a housing shortage. An Arizona State University research report found that Arizona was short about 270,000 units in 2022.

TSMC, which is investing $65 billion in Arizona with a $6.6 billion boost from the CHIPS Act, plans to hire 6,000 workers. Additionally, the company expects those factories to create tens of thousands of construction and indirect supplier jobs. Those workers will need places to live.

“Phoenix is growing, and what used to be far out there isn’t so far out there anymore,” O’Brien said.

As trillions of government dollars flow into the national economy, more communities will have to grapple with the tradeoffs of development, as the Golden Triangle has. What is happening there will happen elsewhere.

“Change is coming?” Ryssdal asked.

“It’s not just coming,” O’Brien said. “It’s here.”