Sedona’s Housing Crisis: Too Little, Too Late?

2,493 words. Available for reprint.
Story and photo by Cyndy Hardy

Appears in the January edition of The Noise.

Photo: HAWKEYE RV Park, slated for condo development, looks like a ghost town today.

Mike Horner is dubious about the city’s intentions to do something – anything – about affordable housing in Sedona. To him, it’s empty talk about doing what’s best for the community by people who cater more to the rich than to “regular people.”

“They have a lot to say but it doesn’t seem to do any good. It’s like they have their own agenda and a deaf ear. I haven’t seen them put up any low-income housing. I don’t think they’ve done anything,” Mr. Horner said.

Over the past 17 years, Mr. Horner has downsized from a 3-bedroom home in West Sedona to a trailer in Oak Creek Mobile Lodge on Hwy. 179. His 16-year-old son, Brooks, lives with him. His 18-year-old daughter, Esme, is moving in soon from Flagstaff. Mr. Horner works as a cashier at a mom-and-pop convenience store in Sedona.

When he first moved to Sedona, Mr. Horner could rent the three-bedroom house for about $675. When he re-entered the rental market after his divorce, rents were about $1,000 for a two-bedroom house. He moved into Oak Creek Mobile Lodge because it was a good deal, he said.

Now, Mr. Horner believes his days as a Sedona resident are numbered. Oak Creek Mobile Lodge is on the chopping block. The property owner, Don Campbell, plans to remove the park’s 59 trailers and build about 50 condominiums.

He did not know that two days earlier, on Dec. 11, the Sedona City Council passed a Housing Policy to encourage the construction and retention of affordable housing after talking about the housing problem since at least 1992.

“Oh? I’m not sure what you’re talking about,” Mr. Horner said, unimpressed, as he bagged a customer’s cigarettes and six-pack. “Have a good night, George,” he said. Mr. Horner knows a lot of his customers by name.

Mr. Horner will move to Cornville, where he owns a piece of land with a run-down mobile home. “If [Mr. Campbell] says we have to go, I’ll make my Cornville property livable,” he said. So far, he plans to continue working at the convenience store in Sedona.

About 64% of the city’s workforce lives outside of Sedona. Eighty percent of Flagstaff’s workforce lives in Flagstaff, according to the 2007 Housing and Community Sustainability Nexus Study. No information about commuters in neighboring cities was available at press time.

Rhonda Ross, a former Sedona resident who now lives in the Village of Oak Creek, appears in an informational video created by the Sedona Housing Commission.
“Living in Sedona is definitely a very important part of being here. I really would not want to be working all my jobs just to be living here; just to be having the majority of my income going to rent, bills and food,” Ms. Ross said.

Sedona has the highest affordability gap in the state, according to a report distributed at the Governor’s Housing Forum in September 2007. A 2007 citizen survey report for Sedona, prepared by the National Research Center in Boulder, Colo., ranks Sedona in the bottom 4 percentile for access to affordable housing out of all the cities in its database with populations below 40,000.

Housing Commission member Nate Oskar said the crisis goes beyond the lowest wager earners most people associate with affordable housing. Sedona, as a community, finds it hard to attract teachers, police officers, nurses, managers and other professionals because the salaries don’t match the incomes required to buy or rent in Sedona.

Median home prices in Sedona increased 77 % between 2000 and 2006, according to the Housing Commission. Rents increased 40%. In comparison, Sedona median household incomes only increased 13%, from $43,466 to $49,225.
The current median asking price of a single-family home in Sedona is about $586,000, according to Buyers Brokers Realty of Sedona. Townhomes and condominiums fetch about $390,000.

Sedona employees would have to make $84.50 per hour to afford a median-priced home, the governor’s report stated. A Sedona renter would have to earn $23 per hour. That is $30 more per hour than the Arizona community with the next highest housing costs – Flagstaff, where workers need to make $54.14 per hour to buy a median priced home.

With an unemployment rate less than two percent, those who live and work in Sedona usually have two or more jobs, according to Sedona Economic Planner Jodie Filardo.

Sedona’s new housing policy gives the city some leverage to negotiate affordable housing with developers seeking zone change approval. The catch is that compliance is voluntary. State law does not allow the city to require affordable housing, according to Housing Planner Jessica Williamson.

Developers commonly choose from a number of community benefits to win a favorable zone-change decision. Affordable housing does not cost any less to build; and the nature of affordability affects the developer’s potential profits. While the policy strengthens the city’s position, there is no guarantee a developer will choose this benefit in its negotiations.

The policy asks for 6-12% of a new development to include affordable housing provisions for eligible households whose income falls between 80 and 150% of area median income.

Total rents or cost of homeownership must not exceed 35% of a household’s gross monthly income. Affordability must be fixed for about 50 years.

Developers can choose to pay into a dedicated housing fund instead of constructing affordable units. The fund will directly support the creation and maintenance of affordable housing through activities such as land acquisition, down-payment assistance and low-interest loans.

As incentives, the city offers to waive or defer all applicable impact fees, development review fees and building permit and inspection fees for the affordable units. The city may also waive or defer fees for the non-affordable units in a project that includes affordable units.

Projects with affordability provisions would get priority attention to expedite the review and permit process. On a case-by-case basis, the city may bend its land development codes to accommodate the affordable units; including lot coverage, building heights, lot area, lot dimensions, and yard setbacks.

Mr. Horner is not alone in believing the city has “a deaf ear.” The Sedona Verde Valley Association of Realtors launched a last minute attempt to stop the City Council from adopting the housing policy at the council’s Dec. 11 meeting.
“[Housing Commission members] came to us in September. We gave them some strong questions and we never heard anything else,” said SVVAR member Ron Volkman. He said the policy had not been given proper public process.

SVVAR President Holly Mabery called it a “feel good policy with no net results.” The policy lacks consistency, oversight and does not address costs and liabilities, she said.

“How can staff possibly implement this?” Ms. Mabery asked.

The attack seemed condescending to the Housing Commission’s expertise and its three-year efforts to get an affordable housing policy on the books. That the objections came from Realtors seemed to imply their alignment with developers to retain the highest possible profits for housing projects.

Council members and Housing Commission members reacted suspiciously to SVVAR’s tactic of waiting until the policy was agendized for council approval, instead of bringing up the organization’s concerns during the three years the Housing Commission had worked on the policy.

“We just got these questions now,” City Councilman Rob Adams fired back, referring to a letter Mr. Volkman distributed to the council and city staff minutes before the meeting. The letter was not read into the public record.

“Why are you requiring a delay at the eleventh hour, fifty-ninth minute? Who from [SVVAR] is responsible to monitor this?” he asked.

“Myself, in Sedona,” Mr. Volkman said.

“So, it would be you,” Mr. Adams said, bluntly.

“You’re faulting me for coming forward at this point?” Mr. Volkman asked. He shot the council an incredulous look and sat down without waiting for – or receiving – a reply.

What wasn’t said in those tense moments hung in the air like a verdict: the Realtors had the same opportunities as anyone else in the community to involve themselves in the process.

The Housing Commission meets twice per month. Its agendas and minutes are publicly posted, including on the city’s Web site.

Commission members have met with businesses, resorts, the Sedona Oak Creek Unified School District, the Verde Valley Medical Center, and five major Sedona employers to determine how the lack of affordable housing affects their business.

The commission has circulated two informational brochures. It has hosted focus groups and presentations on density and how community participation can help blend affordable housing into the community.
The commission prepared the 2006 Baseline Housing Report to determine the city’s affordable housing needs. It recommended an ordinance for residential over commercial uses, which the City Council passed in July 2005.

“I know the Housing Commission achieved public process, and at a great expense of time and money to the community,” Councilman Adams said. The SVVAR did not bring its concerns forward until Dec. 10 and its members offered no compelling argument against the policy, he said.

“Developers are getting a benefit for a benefit given,” said Mr. Adams.

Maybe the Realtors just never thought the City Council would actually approve the policy, especially with a 6-0 vote (Vice Mayor Jerry Frey was excused). Some Housing Commission members were surprised it passed.

The Housing Policy is flawed. It’s about 80% “right,” according to Linda Martinez, housing commission chairwoman, and changes will have to be made. But, it’s a start and the city can’t afford to “study it to death,” as Councilman Harvey Stern put it.
“Small solutions got away while we’ve been looking for a big solution,” said Diane Smith, Housing Commission vice chairperson.

Affordable housing, including rental trailers, is disappearing faster than the Housing Commission can do anything about. The commission did not even exist until 2003. Its tools were basically the Sedona Community Plan, the Land Development Code and Arizona Revised Statutes concerning zoning. It took about three years before the Housing Commission had a snapshot of the affordability gap.

The Housing Report found that rents between 2000 and 2006 increased 40% while median income increased 10%. The city needs to secure between 116 and 269 affordable housing units to fill the gap, according to the report.

In 2000, all but four of 12 trailers were removed from the former Laughing Coyote bar in West Sedona. The rest were removed when the bar sold in 2004. Those affordable units have not been replaced.

About 80 residents of Hawkeye RV Park in Uptown were evicted almost two years ago to make way for about 150 condominiums and 12 affordable off-site units, all of which have yet to be built. Windsong Trailer Park in West Sedona has sold and is planned for development.

The Sedona Community Plan states that if existing mobile home parks are redeveloped, “the existing housing densities should be retained regardless of housing type” and that the units should remain affordable.

The Sedona Planning and Zoning Commission recently thought otherwise. During conceptual reviews, several commission members advised Mr. Campbell to reduce the density of his condominium project. He is expected to return with five fewer units, including two affordable units. If approved, the city will lose another 53 units of affordable housing without comment from Planning and Zoning about how to replace them.

Sedona lags far behind the state when it comes to the types of housing available to its residents that are commonly associated with ‘affordable.’ Apartments make up 23% of Arizona’s overall housing stock, but only 4.6% of Sedona’s stock.

Sedona also lags behind other resort communities. About 20% of Aspen’s land use is zoned for multifamily units and 13% in Durango, compared to about 4% in Sedona.

About 1,139 of Telluride’s 1,776 housing units are duplex and multi-family, according to the 2000 Decennial Census and American Community Survey. Telluride’s Land Use Code requires new developments to include affordable housing provisions.

Sedona cannot require affordable housing because Arizona law does not provide for inclusionary zoning, according to Ms. Williamson. The Housing Commission has to look outside the box for solutions. It has made some progress.

Even before the housing policy passed, the city negotiated affordable components into four development agreements, netting about 13 affordable housing units and about $186,984 towards a dedicated housing fund.

“[The Housing Policy] is just one strategy. It is voluntary and it only applies to rezoning,” said Audree Juhlin, assistant to the director of community development.
Other commission initiatives include application for Community Development Block Grants to replace existing mobile homes with new mobile homes, proposing an ordinance to allow guest homes to be legally rented, establishing the dedicated housing fund, working with neighboring communities towards a regional housing strategy, and investigating the viability of a community land trust.

In the meantime, the clock is ticking and some residents wait while rents continue to rise and development projects are built without affordable housing.

Ronald Pauley has a good business repairing restaurant equipment. He is concerned enough about the future of his own “affordable” housing. Mr. Pauley has rented a two-bedroom apartment in Uptown for about six years.

“My landlord started raising the rent after reading about higher average rent prices in the newspaper,” Mr. Pauley said. Last year his rent rose three times in one week. Starting at $600 per month, his rent increased to $625, then to $650, then to $700.

Mr. Pauley said his 8-unit apartment building was built by its current owner in 1972. The construction is not up to code. There are gaps between the original wood siding and the newer brick façade. The PVC pipes rattle inside the walls and methane gas vents into the attic, not outside the dwelling.

“I’ve got a working smoke detector and an exit strategy,” Mr. Pauley said with a grin. He repairs things in his and other tenants’ apartments without telling his landlord, who he said does as little repair as he can get away with.

The view from Mr. Pauley’s affordable apartment used to be the jagged red hills below Wilson Mountain. Now, his view is the back of a new three-story timeshare condominium built about 30 feet from his window. “I know they are timeshares because I see the people who come and go,” he said.

Mr. Pauley can’t see the mountains at all, now. “How did they get three stories?” he asked, perplexed.

Both Mr. Pauley and Mr. Horner asked that their names be changed for this article. They fear losing their homes.

The irony is as clear – and as cold – as the thin strip of crisp blue December sky visible above the condos through Mr. Pauley’s window. Sedona is losing its existing affordable housing stock. The people who need it can’t do anything about it. It’s up to the city to make the policy and up to the developers to make the necessary profit concessions.

Otherwise, the workforce – the popular ones such as police, teachers and nurses; and the not-so-popular ones such as the cashiers, janitors and repair men – may look for greener pastures.

©2007 CyndyHardy. Reprints by permission.