Michael Ward has submitted his application to replace Marc Sterling on the Sedona City Council

SEDONA, AZ (June 10, 2009) - The lack of “affordable housing” is a vexing conundrum for cities like Sedona that are both dependent upon low to mid-paying service sector jobs to survive and have unusually high land values.

Sedona is not alone in the Verde Valley in trying grapple with the problem. I attended a Sedona City Council meeting where the Director of the Verde Valley Medical Center stated that Cottonwood’s cost of housing was a deterrent to the medical center attracting sufficient numbers of people for “technician” level hospital jobs.

Recognizing that affordable housing is a regional issue, the Verde Valley communities, including Sedona, formed the Verde Valley Housing Task Force in 2007.

2008 Housing Commission High Density Proposal

Last year I participated in many of the public forums sponsored by the Sedona Housing Commission and the Community Development Department on proposed changes to the Community Development Plan. The proposed changes would have allowed a density of up to 20 units per acre for properties in a designated corridor along SR 89A in West Sedona, if some type of affordable housing was provided. While there were some supporters of the idea, the majority of the comments were less favorable.

I left the discussion forums concluding that “affordable housing” in Sedona is less of a pragmatic economic question and more of a philosophic one. Our individual opinions on this question range on a continuum stretching from “anyone at any income level has the right to be able to live in Sedona” to “I worked hard for what I have and so should everyone else.”

Our problem is that there is little room for compromise to solve a problem when there is a conflict between philosophical beliefs. Any rational discussion regarding affordable housing will need to take place at a level where pragmatic and factual issues take the forefront in dispassionate discussion. Each individual must then reconcile those real issues with their own personal belief system and work toward a resolution of the problem that they can support.

The high density proposal eventually died before the Planning and Zoning Commission. I have been assured by the Sedona Community Development staff that there are no immediate plans to revive the “high density” proposal as a solution for affordable housing for Sedona. It is possible, however, that the issue may be addressed in the updated Community Plan scheduled to begin in 2010.

Some Housing Facts

The challenge of “affordable housing” is particularly acute in Sedona. According to materials recently published by Sedona’s Housing Commission, in April 2009 the median household income for residents of Coconino and Yavapai counties was $59,800 and $53,800 respectively for a family of four. Various household spending models suggest that not more than 35% of household income be spent on housing and utilities. Assuming $56,800 (the mean of both counties) for a Sedona median household income family of four, housing and utilities should not exceed $1,657 per month.

Using the Quicken Loan Calculator, a Sedona median income family of four should qualify for a $213,500 mortgage with a $1,350 Mortgage monthly payment (principle and 6.5% interest for 30 years). With a required $43,000 (20%) down payment, a $256,500 home could be within their means. This is admittedly a big assumption given the stringent qualification requirements to obtain a mortgage loan in today’s economic climate and the difficulties in building a $42,000 down payment. All $256,000 homes are not equal. Anyone considering the purchase of a home will also need to factor in how much house they get for their money in various housing markets in the area.

In a July 24, 2007 article in Sedona.biz, the Sedona Housing Commission reported that Sedona's 2007 average median income had risen only 13% from 2000 to 2006, to $49,225, while the cost to purchase a home had increased 77% to $496,500. In a recent search for single family homes on Realtor.com for Cottonwood, there were 21 pages of listings of then available homes for sale from lowest to highest with the median price of $209,900 in the middle of page 11. When searching for single family homes then available for sale in Sedona, there were 52 pages of homes listed with the median home price of $596,000 at the end of page 26, nearly three times as expensive as Cottonwood.

According to the assessor’s offices of Coconino and Yavapai counties, there are 380 single family units with an assessed value of $160,000 (a market value of approximately $200,000) or less in the city of Sedona. Though not a large number, this represents approximately 6% of the 6,373 single family units in Sedona. It is likely that these homes are manufactured homes on small lots that may or may not be appropriate for families of four people.

Another consideration is that many families rent apartments, condos and homes. An examination of the classified ads in the Red Rock News on Wednesday, June 3rd revealed that of 46 homes and condos advertised for rent in Sedona and Village of Oak Creek, 37 were listed for under $1,250 a month and 9 over $1,251. The Sedona Housing Commission reported that in 2007, the median monthly cost to rent a house in Sedona had increased 40% from 2000 to 2006 to $1,200.

An old saying goes “figures lie and liars figure.” There is also the problem of comparing apples and oranges given the different years, information sources and communities involved. Understanding that, I have included all of the various calculations available to me to maintain a balance in reporting statistics and to allow the reader to form their own conclusions with regard to “affordability.”

Using Land Development Codes to Promote Affordable Housing

Historically, federal, state, and local governments have used tax codes, laws, and ordinances in an attempt to level the playing field among disparate economic groups of citizens. These political strategies are sometimes referred to by skeptics as “social engineering.”

Increasing affordable housing opportunities in Sedona would require that we employ strategies that have worked for other communities. The Housing Commission looked at the communities of Mercer Island, WA; Bellevue, WA; City of Edmunds, WA; Arvada, CO; Santa Cruz, CA; Marin County, CA; and Town of Rindge, NH to craft a recently proposed an Accessory Dwelling Unit (ADU) ordinance for Sedona. This ADU proposal is currently under study and is planned to be presented to the Planning and Zoning Commission in a work session on July 2nd.

When I was a candidate for the Sedona Planning and Zoning Commission (P&Z) last summer, I was vacationing in Colorado. I asked for and received the opportunity to interview three members of the Community Development staff of Breckenridge, CO. My purpose was to educate myself as a possible new member of P&Z about their approaches to affordable housing in a tourist revenue dependent economy. Among their creative methods for managing affordable housing was to annex vast tracts of open land. When developers approached the town for zoning and building considerations, the town used access to city water and sewer to leverage for the construction of high density single family homes, basically a “no agreement, no water” approach.

Another method was for the town to purchase tracts of land and lease the land to developers to build affordable housing with a stipulated sales price. The city shouldered the burden of the land cost and subsidized the difference between the developer’s cost of building and the agreed upon sales price.

The town also purchased a large apartment complex and then subsidized the rents to qualified people. When asked about the source of funding for these projects, I was informed that the county collects sales tax and various fees that are earmarked for affordable housing for the communities within the county. The town also sets aside a percentage of their city property tax revenues for these projects.

I also learned during the interview that the city of Vail, CO, had passed an ordinance requiring that in order to receive a building permit, any new single family home must include an Accessory Dwelling Unit (ADU). The city also set rent ceilings on those units and requires that the renters be employed in and around Vail. This was easy as there few employment opportunities within a reasonable commuting distance outside of Vail.

While none of these particular strategies employed in Breckenridge and Vail are appropriate for Sedona, it does demonstrate that if the residents and businesses in a city were willing to subsidize with either public funds (Breckenridge) or private funds (Vail), affordable housing that benefits the entire community is indeed possible. There is no doubt in my mind that the residents and business of Breckenridge and Vail have concluded that providing affordable housing options was in the best economic interest of everyone in those towns.

My Position

As do all of you, I have a personal philosophy regarding governmental involvement in promoting social agendas.

In order for me to come to a rational conclusion as to what would be best for Sedona, I need to have relevant empirical data on our community’s needs, benefits, costs, and impacts of adopting affordable housing strategies to reconcile with my personal beliefs. I believe that if each City Councilor were to attend the public forums on affordable housing issues and make an honest attempt to reconcile the facts with their beliefs, decisions that are in the community’s best interests would follow.

In my next position statement, I will attempt to cover some of the need, benefit, cost, and impact issues that need to be appropriately addressed before my coming to a final conclusion regarding the ADU ordinance for Sedona.

Sources of information:

Jennifer Black, Coconino County Assessor’s Office
Carolyn A. Ladner, Yavapai County Assessor's Office
John O’Brien, Audree Juhlin, Jessica Williamson, Community Development Department, Sedona, AZ
Community Development staff, Breckenridge, CO
Red Rock News Classifieds, June 3, 2009
Realtor.com (June 4, 2009)
“Sedona Housing Commission discusses affordable housing”, Carl Jackson, Sedona.biz (July 24, 2007)