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Sedona Housing Commission seeks legislation for affordable housing
Sedona, AZ - At the March 10, 2008 Sedona City Council meeting, the Housing Commission sought authorization from the Council to pursue three legislative strategies that support affordable housing in the State of Arizona. The Commission also sought support for continued funding of the State Housing Trust Fund.
The request was approved by the City Council in a 6-1 vote.
The State Housing Trust Fund is funded through the proceeds of sale of unclaimed property, and has been administered by the Arizona Department of Housing since 1988 for a number of housing programs, including mortgage foreclosure and eviction prevention assistance, homeownership and rental housing development, homeless and domestic violence shelter development, down payment and closing cost assistance for first time homebuyers, and fair housing education. In December, 2007 the Arizona Department of Housing announced that a portion of this funding has been suspended due to State budgetary deficits.
As background, the Council recently approved an affordable housing policy that offers developers favorable zoning options if they include affordable housing units in their developments; but the policy is voluntary.
The Commission also wants to make residential guest homes, known as 'accessory dwelling units,' available for affordable housing. There is currently a City ordinance prohibiting the rental of separate guest suites/homes.
Although the Commission has made strides in expanding affordable housing in Sedona, State law limits certain affordable housing initiatives they wish to pursue.
Consequently, the Commission is seeking support from the Council for the following State legislation:
| 1. |
Establish a uniform property tax assessment protocol for
deed-restricted housing that recognizes the below market
sales prices and the long-term limited profits owners can
realize. Under an affordable housing program, the initial purchase price of a home is below what it would sell for at regular market prices. Typically, the owner agrees via deed restriction to limit the price at which the home can be resold for a period of time to ensure that it remains affordable. In Arizona, there is no standard methodology for assessing property taxes on affordable homes created under an affordable housing program. While the current Yavapai and Coconino County Assessors value deed-restricted homes based on the below-market sales price and long-term resale restrictions, there is no guarantee that future assessors will take the same approach. The Housing Commission believes it might be useful to pursue state legislation to require that deed-restricted housing be assessed based on its below market sales price and long-term resale restrictions for the period of affordability. |
| 2. |
Enact enabling legislation that would allow each community
in Arizona to determine whether or not it
will require developers to include affordable housing in new
developments or redevelopment (inclusionary housing). Arizona statutes do not permit cities and towns to require that developers include some affordable housing in new developments. Other states, such as Wyoming, Massachusetts and California, do have legislation that enables cities and towns to decide whether or not to impose those requirements on new developments. Over 200 jurisdictions nationwide have adopted inclusionary housing as a means of addressing their affordable housing needs. Cities that have adopted inclusionary housing require that a percentage of new residential units be sold or rented as affordable. The affordability percentage, as well as the targeted income level, the period during which the units must remain affordable, and any incentives, are determined entirely by the locality. The Arizona State Legislature passed legislation two years in a row prohibiting any jurisdiction from adopting inclusionary housing. Both bills were vetoed by the Governor. In 2006 Flagstaff unsuccessfully tried to get enabling legislation passed to allow inclusionary housing. |
| 3. |
Impose conditions on conversion of rental apartments to
condo ownership. The State’s Uniform Condominium Law currently prohibits jurisdictions from imposing an ordinance or requirement on a condominium that it would not impose on a physically identical development under a different form of ownership. This has been interpreted to mean that jurisdictions cannot impose conditions on conversion of rental apartments to condo ownership. Rental housing is generally the most affordable housing option for a community’s workforce. Given the very limited amount of rental apartments in Sedona (only 4% of the City’s housing stock is rental apartments as compared to 22% state-wide), and the growing inability of Sedona’s workforce to find affordable housing in the community, condo conversions are a serious threat to the community’s scarce stock of affordable workforce housing. |
Should the Council support these strategies and the necessary legislative initiatives, the Housing Commission would work with the Verde Valley Housing Task Force and other localities, as well as with nonprofit housing development organizations, to approach the Arizona League of Cities and Towns about pursuing future legislation.
Source: memo dated March 10, 2008 from Jessica Williamson, Associate Planner and Audree Juhlin, Assistant to the Director of Community Development to the Sedona City Council.