Flagstaff advances 141-unit affordable housing project through rezoning as rental market stabilizes

I think he froze. Kevin Dobby, we'll come back to him. Karen Flores, I'm here. Sandy Flores, I'm here. Jackie Kellogg, Jackie, Deanna Mclofflin, here. Sarah Meyer. Moses Malazo, I'm here. Sarah Miles here, Corey Rangy, Jennifer Vargas present. Haley Zoya. All right, Kevin Dobby, present. Present. Thank you, Kevin. Jackie Kellogg. Jackie, we see you, but we can't hear you. If you can confirm that you are present. And who was it that just came in? I believe Tyler came in. Perfect.

And then Jackie, Jackie Kellogg. Thank you, Jackie. Sarah Meyer. Sarah, she might be having some technical difficulties. I've clicked admit on her about three times now. self. No, she's trying. Okay, thank you. Back to you. Thank you, Adriana. Could I have someone please volunteer to read the land acknowledgement? Okay.

a no volunteer then I will read uh the housing commission humbly acknowledges the ancestral homelands of this area's indigenous nations and original stewards these lands still inhabited by native descendants border mountains sacred to indigenous peoples we honor them their legacies their traditions and their continued contributions we celebrate their past present and future generations who will forever know this place as home at this time any member of the public may address the commission on any subject within our jurisdiction that is not scheduled before the commission today.

Due to open meeting laws, the commission may not discuss or act on items presented during this portion of the agenda. To address the commission on an item that is on the agenda, please wait for the chair to call for public comment at the time the item is heard. Do we have any members of the public or any uh comments submitted? Chair, I have not received any emails and I don't see any members of the public present. Great. Thank you, Adriana. Uh, we're on item number five, approval of the minutes.

Do I have a motion to approve the minutes from the December 4, 2025 meeting? I'll make that motion. This is Thank you, Dana. I'll second. This is Sandy. Thank you, Sandy. All right, we have had a motion and a second. Do we have any further discussion on the minutes? All those in favor of the motion, please signify by saying I. I. I. Hi. Hi. Any opposed? Any abstensions? All right, the motion carries. The minutes have been approved. We have no action items for item number six.

So, we will move on to presentation and discussion items. Item 7A is overview of housing solutions 2025 rental attainability report. This is anformational item only and Devon McLaclin will be presenting. Awesome. Thank you Moses. Um Adriana I know I sent it late but do you have the presentation? Hey Devana, did you send it today? I don't believe I've seen it, but let me check real quick. Yeah, about a half hour ago, I sent it via email. In the meantime, I see that Sarah Meyer has joined us.

So, um, can we please add her to the attendance list? Yeah, we'll make sure that we have that noted in the minutes. Devon, I'm not seeing you won't am I allowed to share my screen? I don't know how that works. You should be. Okay, let me check and see how happy everyone is. Can you see my screen by any chance? We can see your screen. It's not in presentation mode, but um we can see it. Perfect. Let me get to presentation mode. How do I do that slideshow? Here we go.

That's down in the bottom right corner. There's a little There you go. Oh, no. That's your view. Is it not happy with everything? We can see it, but it's just smaller than it could be. H Oh, I wonder if I can share a different screen. Yeah, you'll you'll want to select the other option when you present. How do I get this to go to here? Maybe. Hang on one second. Don't look at my emails real quick. Um, let me see if I can do it the other way from beginning. No, it didn't run that one.

Devon, there's a display settings at the top of your screen. See if it will fix it. swap presenter view and slide view. Ah, perfect. Thank you. Oh god. Okay, you're okay. Sorry for the um craziness. Um so I am happy to talk with you all today about our rental attainability report. Um to give a little bit of background on um the report itself, Housing Solutions has done a rental attainability report for for 10 years now.

Um, that's kind of fun and nice to be able to to do this not just snapshot, although every year is a snapshot, but to then be able to look back holistically um to see kind of what's changed over time. So, we're we're kind of pulling that data now um to see trends over the last decade. Um, but it is our 10th year of doing this.

Um, for this year's rental attainability report, we surveyed 55 market rate apartment complexes that represent 9,256 units and nine incomerestricted complexes which represent 822 units. We did the survey between um October and mid November. It takes us a little while to gather everything with multiple phone calls and emails and web searches. Um, I will tell you this was the first year we had a couple of um, multifamily properties refused to give us data.

In the past, we've been able to at least work around or get, you know, the city to call and get the information from them when when someone more official calls. Sometimes they'll give information, but this year there were a couple that just refused to give data. So, that's unfortunate. Um, but we did the best we could in in capturing the data that was available.

Um the reason we started doing this was uh to try and gather information about what's really happening in Flagstaff when it comes to rents. So a decade ago we were seeing that rents were increasing at a rapid pace and um that the HUD fair market rent data didn't really capture what was happening in Flagstaff and there's reasons for that. So, um, HUD's fair market rent data, um, is for the metropolitan statistical area, which in our case is all of Cookanino County.

It also has a different methodology. So, it's really looking not not quite at averages or mean. Um, it's looking at kind of a different um, way of doing things. And so, we knew the information we were getting from the federal government didn't quite capture what was happening in Flagstaff. Um uh and so we wanted to see if we can gather some more accurate and timely data.

And so um that's how this was born was really a conversation um with the private sector and the public sector to say how do we get better data for what's happening in Flagstaff? Can we track that over time? Um, can we just be Flagstaff centric and can we um see kind of how increases in the supply or increases in demand might change rent over time so decision makers can have better information.

And so with that being said, um the report then um I think you guys have a copy of it or got a copy of it or can get it on our website. Um, it's a two-page document that looks pretty, thanks to our graphic designer and marketing team here at Housing Solutions. What we're trying to do really is condense a lot of data down into um digestible bites. And so the first data has to do with actual rents.

So what's happening with rents in Flagstaff once again in the fall of 2025 and how has that changed from the previous year? And so this year's rental data changes is is a mixed bag and it's actually a lot of good news. Um we have not seen in this year significant changes year-over-year or significant increases.

We've seen some uh unit sizes go down a little bit, some unit sizes go up a little bit, but overall there's not, you know, double digit swings um in increases in rent from the previous year. We did see um you know a room in a shared living environment. So this is a lot of your student housing complexes go down 7.7% and we also saw threebedroom units go down 7.2% which is great data. And then for the studios onebedrooms or two bedrooms much less significant changes.

A little bit up a little bit down uh but but overall not the crazy double digit increases that we've seen over over the past decade. This is also reflected in what we've seen in fair market rents.

So, I just told you that HUD's fair market rents aren't always accurate, but but there's a lot of programs that use fair market rents um in order to set rental limits, including, you know, the housing authority with section 8 vouchers or um friends at like Catholic Charities with um rapid rehousing assistance. And so, fair market rent does factor in to our world and we do live by it in a lot of cases.

And so we also on the rental attainability report show you what happened to that change from the year-over-year. And it's the same mixed bag. So we saw, you know, rent for a studio go up 2.1% for fair market rent, but rent for a two-bedroom go down 1.08%. So little tweaks and changes that are pretty consistent with what we've seen in our data collection for the actual rental averages that you can see here. Um, before you before you go to the next slide, could I ask a quick question?

I think you might have mentioned it, but I I missed it. Are these just in real dollars or are they in uh inflation adjusted dollars? We did not adjust for inflation. Thank you. So, these are Yeah, these are actual increases from year to year, not not an inflation adjustment. Um, and if anyone has any other questions, just interrupt me because I can't see you guys with my screen slideshow up as it is. So, I apologize for that, but interrupt me anytime. Um, so that was the good news, right?

Things didn't go up significantly year-over-year. The not so great news is that they didn't go down significantly, which would have impacted positively on affordability. So, we're still seeing that rent is not that affordable. Um, so for a two-bedroom apartment, which you know, you can do this math for any unit size, but we pick two-bedroom, um, a Flagstaff renter has to earn $78,000 a year to afford that average two-bedroom apartment.

And, and there's a lot of like um, asterises on this slide for a reason, right? Because there's mathing going on behind the scenes. So, what how do we define affordability? And for our purposes in this um calculation, we use 30% of gross monthly income um for what what is needed. I if you're paying 30% of your gross monthly income, uh so you're not housing cost burden, then you need to make $78,200 a year.

Um and then the average rent for a two-bedroom apartment based on our survey results was $1,955. So, that's kind of the math behind the scenes that, you know, 78,000 is not certainly entry level, not min not minimum wage. Um, and and it's an expensive income in order to afford a two-bedroom. Now, this is a two-bedroom, so if you have two wage earners living in that onebedroom, then, you know, you can divide the 78 by two income earners and it gets much more affordable.

But we also recognize that not every two-bedroom unit has two wage earners in it. If there's a single parent, for example, in a two-bedroom unit, then that single parent is is probably the only wage earner. And so that's how we get to affordability levels. If somebody does not make $78,000 a year, it doesn't mean they can't rent a two-bedroom apartment. It just means that month over month, a larger percentage of their gross monthly income is going towards rent than is what is recommended.

And so there what that's what we see probably a lot of people who don't make $78,000 a year renting two-bedroom apartments and just paying a larger percentage of their gross monthly income towards their housing expense. The other thing I want to point out to you guys is that when we survey apartment complexes, we ask what they charge in rent and the $1955 is what the rent charges for most apartment complex. that does not include utilities.

So specifically, 92.7% of the market rate complexes we surveyed do not include electric charges in their rental rates. So those electricity expenses would be in addition to the 1955. 71% of market rate complexes do not include gas in their rental rates. Once again, that gets added to the the monthly budget for a renter um increasing the housing cost if you're including rent plus utilities. And then the last utility we ask about is water and sewer charges.

So 52.7% of market rate complexes do not include water and sewer in their rental rates. So, the majority of gas, electric, and sewer are additional expenses that a household would have to cover um in excess of the $1,955 a month. Any questions on this slide? All right. So, then that's what it takes to be affordable, but then we also looked at minimum wage. And this slide here is adjusted.

So when we issued our rental attainability report in November, minimum wage was a little lower and then minimum wage increased January 1. So we redid the math for the slide purposes because it felt weird to give you data that we know is not accurate. So now minimum wage is $1835 an hour. And so in order once again to afford that two-bedroom apartment um someone would need to work two full-time jobs in order to hit a 30% housing ratio.

And once again, if you have two income earners, then that makes sense. If you have two minimum wage full-time um uh income earners in a two-bedroom apartment, it's affordable. The challenge comes in when you don't have two full-time um wage earners in an apartment, which we know happens often. Maybe it's one and a half uh full-time jobs um or maybe it's just one, and that's where folks um are probably struggling to be able to afford rent. Any questions on this slide? All right.

And then we start looking at some other things. So affordability is one piece of the puzzle, but what's happening with stability? And so stability in our market can be seen in things like actual rental averages increasing a little bit, decreasing a a little bit. Another indicator has to do with the vacancy rate. And so our vacancy rate in this survey was 5.98%. Um, so that's how many uh units in market rate complexes are currently vacant. This data is is good and um and and consistent.

So last year our vacancy rate was 6.76%. So it's gone down a little bit, but it's above our historic norms. And so that's really helpful. It's the second um lowest or the second highest vacancy rate we've seen since we started gathering data. In addition to that, five complexes representing 677 units reported offering incentives. This is the first time we've gotten that indicator from market rate complexes.

And so incentives include things like waving fees, temporary free or reduced rent, and one place was even doing raffle prizes to um attract new applicants. So all of those are signs of of stabilization and a softening of the rental market which could lead to more affordability uh for renters if if rents are pressure to stay the same or go down, vacancy rates are higher and then more um market rate property management companies start offering incentives to get people in.

So all signs of at least stabilization if not a softening of the rental market. Davana, before you move on, could I ask a question about that? Absolutely. Yeah. Um, I assume you have the data, but I'm curious if um you looked at whether or not this uh vacancy rate is due to fewer renters or more units. So, we don't really have a good way of capturing that. My gut says it's more units, right?

So, um, we're not seeing a reduction of, um, rental, like it's not like a huge multif family property went off the market, for example, and then that increased the supply. We're seeing the opposite of that with increases to inventory. And so, my guess is that it has to do with inventory, not a reduction of renters. I don't see that our population has decreased significantly or that a huge segment of the population is now no longer renting. I think this has to do with supply if I had to guess.

That's Devon's kind of sense of what's happening. Great. Thank you. I want to throw another potential out which is more people sharing units than maybe we would like or Yeah. So, um a lack of household creation, right? So, the number of people are the same. They're just in smaller household units. Yeah. Um Yeah. And that could easily be due to affordability, right? So like you get a roommate because you can't afford rent.

So and if that wasn't the case, then each of you might have your own rental unit. Yeah, that could be happening. Okay. But we don't we don't have this the the level of detail that we would need to be able to answer that question. No. And I don't know. It's a good question, but I don't know how we gather it quite frankly. Yeah. I don't know either. I was hoping you would tell us. Yeah.

market rate complexes aren't I mean they barely answer the questions when we call them let alone like can we dig into the data on your like tenants like we're yeah we're not getting that so um I'm not sure how we'd figure that out but it's an interesting question thank you yeah um so then another thing we looked at this year has to do with income requirements so we started asking u market rate complexes about the minimum income come a household would have in order to rent from you.

And then so this this works in two ways, right? So if the minimum income is less, it's a lower barrier for folks to get in. If the minimum income is higher, then you have to make more income in order to um afford to be able to just move into that unit. On the flip side though, if the minimum income is one times the rent or they don't have requirements, then a household can move in there and be housing cost burdened, right?

If you're if you're only requiring people to show income that covers rent, that's crazy. But 12 complexes do that. Um, and that means somebody could be paying a 100% of their gross monthly income on housing in those cases. I doubt most people are. It's probably that their their income is higher than that or they don't have a limit. Um, but 12 complexes that we talked to really are zero times rent or or you have to show you at least make what the rent is.

The 16 complexes say you have to make at least one and a half times to two times the rent. Even at two times the rent, a household moving in would have a 50% housing ratio, which according to the data and the norms, that's a housing cost burdened household. So the the barrier to the bar to get in is lower, but you're still looking at folks in the who are your renters then paying a larger percentage of their gross monthly income on housing costs.

And then 27 complexes are two and a half to three times rent. And that three times is where you get, you know, your affordability metrics. But then once again, you have to demonstrate higher income to just even be able to apply and move into a unit. So, we thought this was kind of interesting to see what was happening in the market. And then finally, we started a few years ago looking at how many units does our community have that are restricted to or available to lower income households.

And so this year, that number was 2004, which is a really exciting number. Like we've broken 2,000 units. um it increased year-over-year by 190 units, which is um a significant increase in that inventory. It's broken down on the rental attainability report um in a mix of ways.

So, for example, the housing authority is doing a lot of the heavy lifting here with 345 public housing and Clark homes units, which are managed by the housing authority, and 566 housing choice vouchers or housing vouchers. I'm sorry. That's all all of the vouchers that they manage. I recognize there's some subprograms in there.

Um and then um there's 168 rental program units that were incentivized or required by the city of Flagstaff through development agreements or the incentive policy um or negotiations with private sector developers who say we're going to do 10% affordable to folks under 80% AMI, for example. So, 168 units out of that pool. And then there's 822 low-income housing tax credit units, which I know Sarah will talk about here shortly. Um, Housing Solutions has 98 units and Catholic Charities has 44.

So, we're excited about this increase quite frankly. Um, it's it's great news. Um, but I do want to put the caveat out there that it would have been higher this year if we had not lost 135 units that were um low-income housing tax credit units that converted to market rate through a qualified uh contract process. So, they did not finish their affordability requirement.

They petitioned to the department of housing to be able to convert to market rate early um and were granted that um requirement after going through the regulatory review period. Um so 135 units lost in our community um would have then increased our our year-over-year by that many um additional units had they not gone to market rate. Um, so we did add 221 new low-income units on at Sieron 66, 45 um by Housing Solutions, and then three units added by Catholic Charities.

These don't reflect additional units under development. So, if there's additional low-inccome housing tax credit properties that might come online or additional units through the city of Flagstaff incentive program, um those would be reflected when they come onto the market in future years. So, um there could be additional units in the queue in that development pipeline that we haven't realized yet as a community because it takes time to create units. Um but this is our snapshot for right now.

Um the other quick data to tell you about is um kind of some of the barriers for move in. So 80% of market rate complexes do charge an application fee per adult. That average application fee is $57 per person. 66% of market rate complexes charge an administration fee in addition to the application fee or first month's rent or security deposit. An average administration fee is $270 per household.

My god, wouldn't it be nice if they're like, "Hey, it's a we have to do admin, so we're going to charge you for that." Like, I find this fee to be fascinating to me because it's kind of I in my mind, it should be built into the the money that they make from rent. Quite frankly, I I don't understand why a tenant has to pay for a property manager's admin, but 66% of market rate complexes are charging it and is not insignificant. And then 47% of market rate complexes participate in dynamic pricing.

And that's where rental rates change daily based on an algorithm um and a subscription service that looks at demand, vacancy rates, etc. across multiple properties. So, if you call and ask about available units and what's the rent today, it won't be guaranteed if you call back the next day, which makes it really hard for people to shop for housing units and to know um what rent will be when they come back in to apply in a week or whatever.

And then 100% of market rate complexes conduct both criminal background checks and credit checks as part of their application process. So, if you have any um blips on your criminal history or blips on your credit, that might be a barrier to moving into a resolution. Um so, anyway, that's kind of the snapshot picture we've got going on. I'm happy to answer any questions that y'all might have. Um but appreciate the opportunity to talk to you. Thank you, Davana.

Do any members of the commission have any questions or comments? Don't see any hands raised and I don't see any C's or Q's in the chat. Uh Dana, I have one more question. Do you know if the the low-income restricted units like the ones that aged out or had their contracts um closed out by the Department of Housing, do you know if the there's a public record about those units so that we can be better prepared in the future to understand the impacts? Yeah.

So the process for going through qualified contract is a public one. There's a lid. So, so any um owner or developer of a low-inccome housing tax credit property that wants to apply for qualified contract has to submit an application to the Department of Housing. And that application is pretty intense. It has, you know, your financials and uh minimum qualified bid price. And essentially, the Department of Housing is looking for someone to come in and buy that property and keep it affordable.

and it has to be advertised um for a year. So there's there's a year's opportunity for someone else to come in, acquire the property or negotiate um an agreement for sale with the current owner um and then keep it affordable. That process allows for a change to the affordability requirements. So, like if you had some units subsidized down to serving households at 20% area median income or 30% area median income, the new buyer could say, "Well, it doesn't pencil.

I need units to serve 50% area median income for my my um rental mix." So, it it doesn't guarantee everything stays the same, but it does guarantee affordability under 60% area median income for at least the compliance period. The challenge is that somebody has to come in and be able to afford the min minimum bid price and to get the purchase. So they rarely get a buyer through this process, right?

And then at the end of the com the um advertising period, if there is no buyer, then the current owner can convert to market rate. They get out of their obligations. And so that's typically what happens with this process is that they advertise for a year and then at the end of the year they convert to market rate. Um so it is public. So that's one piece of it.

The department of housing got smart along the way and they started um saying if you want to apply for tax credits, you have to wave your right to a qualified contract in order to get the tax credit. So these are projects that were placed in service years ago um that have the opportunity to do qualified contract. Newer developments don't have that same opportunity. They have committed to the compliance period and wave their right to a qualified contract.

So in theory over time we will see fewer qualified contracts and properties will have to um complete their compliance period which is great news, right? Like so you you didn't commit to 15 years and get out in year 10 or 30 years and what you whatever it is, you have to at least abide by the by the promise you made as a developer on the front end to get the tax credits.

With that being said, there is a sunset for every low-income housing tax credit property, whether it's through qualified contract or at the end of their compliance period. And I think as a community we need to pay attention to that too because it might be a longer horizon but this will still potentially happen in year 31 instead of year 15 to folks and it's still a displacement. It's still an impact to tenants who have been there.

And so as a community we should maybe look at and and Sarah wrote a C so she might have this data um like which units do we have now? when does there a compliance period end? Are they eligible for qual qualified contract? And are we paying attention to this? Because even if we've added 190 units, the 135 tenants in those properties have had been impacted negatively. And so, as a community, we probably should be looking at this more closely.

And we I at least and I think the city too has been advocating for additional resources so that somebody could come in and buy um a property under qualified contract and have money to subsidize the purchase, right? Like the reason they're not getting sold is because it doesn't pencil and so are there resources for preservation that we can look at as a city or community or state because it would be great to be able to save some of these properties.

I think we've had four go through qualified contract in the last two or three years in Flagstaff. That's a big hit to our inventory and I don't know what's coming down the road, but I'll shut up now because I know Sarah has. Thank you for that very thorough and enlightening answer, Davana. Um, any other questions or comments from the commission? All right, I don't see any. So Sarah, please go ahead. Thank you.

Um, I put the comment in first before Devon punted to me, but I I I want to start with saying how grateful that city staff and organization is that housing solutions does this work. It's not something we've had the capacity for and it's something that coming from a local nonprofit is received very different than if we were doing it and the data is very very useful to us in helping us educate HUD on what our actual conditions are.

Devon mentioned how uh that fair market rents are not really an accurate measurement. The fair market rent data is calculated on such a narrow scope. It's data on recent mover households for twobedroom units. And getting recent mover data outside of Flagstaff is is difficult. Um and it's also it tracks two years behind. It's based on uh American Community Survey data which tracks two years behind. And so it's pretty frustrating.

We've even had one of the head economists for HUD we rewind we wind and and uh advocated for so long. HUD actually sent an economist out several years ago to talk to us and talk to the community and city council about how these are how these are calculated and what our options are which are few and the ones that do exist are expensive with very short-term results.

So giving us data to be able to talk to not only HUD but the development community about what rents look like um help educate the public that may be owners, longtime owners about what rent really costs in Flagstaff is really valuable data and we're extremely grateful um for Housing Solutions willingness not only to gather it but to share that information widely. Um on the like second thing punting um on the we have on our to-do list to make the the expiration date of tax credits.

Davana did say this date has gotten um wiser over time. So have we. Um and I'll talk about this um in the the next presentation, but I did want to point out that the properties that have gone through the qualified allocation process in the last few years are still working with our voucher clients. They did not clean the properties out. They shifted rents um and are still working with um voucher clients through the housing authority.

So that there's there's a there's a there's a glimmer in that, but it's really a small one. So, thank you for letting me add a comment. Thank you, Sarah. Uh do any members are there any members of the public and do any members of the public have any comments? Okay, then we will move on to Sarah's presentation on the low-income housing tax credit program. Thank you. I am working on I'm working on screen sharing and I'm hoping that this works. My screen just went to my screen saver. What?

Let's see what you guys can see. I can see slide one. You can see slide one. Excellent news. And not in presentation view, right? Yep, I see it. Okay. I like it when I can operate technology. Um, I'm going to turn my camera off so I don't slow down. Okie dokie. All right. At at commission request, it was an overview of how low-income housing tax credits work. So, this is a a pretty high-level flyover. Um, I want to thank Aiden Rutled for assisting greatly in putting this presentation together.

Um, he put this presentation together and let me edit a couple things. And so, um, thank you Aiden for your work on this. It's it's very appreciated. So, we're going to talk about low-income housing tax credit. um what it is, what it how it works in Arizona, what it's done in our community. Um so that's our our overview slide. Um along the housing continuum piece, which I I know you are all familiar with, but this is really it's this it is this I don't know what just happened. There we go.

It's this teal color right here, affordable rentals. And to the left hand side is really where you see a bulk of government funding and um nonprofit interactions. Um unsheltered emergency shelters, transitional housing, public housing and vouchers. This is based in governmental funding or grants, foundation nonprofit funding. This piece of affordable rentals is really where the public um the public and private money meet.

And so you see we have listed here both LITC low-income housing tax credit. I'm going to say LITC. There's a consultant that we've worked with in the past from down south and she says LITC. So we we don't we're just going to say LITC. Um and the incentive policy for affordable housing which is where um there's public money intersecting with private money and to be able to work to create affordable rentals. IPA can also work with um affordable ownership.

And as we move, this is much more to the left is much heavier. Um, governmental funding getting lighter and lighter moving to the right. And so, um, this is really a good strong relationship between both public and private entities to bring additional affordable rental markets, rental units to market. This is the primary federal tool for affordable rental housing. Um, and it is actually an IRS program. It is not a HUD program.

A lot of folks assume that it is HUD um but it is um an IRS program that can be coupled with HUD programs, but it is actually funded through IRS. It targets lowincome individuals and families and it supports the creation um of new units or the rehabilitation of existing ones. And then Devon already talked through this about the commitment period of maintaining affordable rents. Arizona now requires a 30-year commitment. Um, which we also do in anything where we're coming in with money.

Um, and we we caught on a little earlier than the state and started requiring the 30-year commitment prior to them requiring the waiver of the um qualified contract process. So um history of LITC is it was started in 1986 as part of the tax reform act and it was created in response to the federal government starting to want to get out of the public housing business.

Public housing is expensive and this was designed to do exactly what it did which was to shift affordable housing production in the rental market towards private um creation. So when we talk about LITC, it's it's different than other programs and they are designed to serve 60% of AMI and below in the affordable units. You can do a mixed income project. Um I'll talk about that in a minute. We only have one in Flagstaff. Um typically what we see up here is 100% affordable serving 60% and below.

I'm going to go a little bit technical here. um 40% of the development must must be reserved for families earning no more than 60% AMI. 20% must be skewed even deeper to 50%. And within the competitive process for the 9% credits, um you can actually skew your rents even lower down to 30% and below for extra points. Um and it's it's all about it's all about money. It's about how the project pencils.

It's about what rents can be charged to what households to create ongoing income for the project that can support whatever um debt load is existing after the credits. So, we'll get into a little bit more of that in a second. I also cannot see questions if they come up. So, if somebody could punt to me if you see questions, that'd be great. Thank you. So in a nutshell, this is a extremely um complex process called down to four steps.

So the federal government allocates tax credits to state government where the state government then allocates to the state housing agencies. Usually that's seamless. It quite often looks like it just goes directly from federal to the state housing agency. That amount of money received by each state is determined by a per population formula. That's the information on white right here. So there was actually a 12% increase in the tax credit basis contained in the big beautiful bill last year.

Um which made the credit go from $3 per person in 2025 to $3.416 per person in 2026. I know if you math that it is not 12%. Um, but this is the actual published number, but it's based on 12%, so I can't tell you what else is in there. Um, but that is a lovely that's a lovely increase. Um, which gives each state more money in tax credits to award because the demand is out there.

So through a process we'll talk about in a minute but in the very simple overview is developers apply for these tax credits and then the state selects projects based on how um the project competes through the qualified allocation process addressing the state's housing needs. Now here's where the money comes in.

So when the developer is awarded the credits, they then sell these creditors to investors who claim them on their federal or in the case of um state housing tax credit on their tax returns. So we're talking about investors like American Express or JP Morgan Chase or major corporations buy these tax credits. And let's talk pricing for a second. For the last several years, um the pricing has been in the high 90 cent range. So these are not sold dollar for dollar.

They are sold um below the dollar mark. In the early9s, they were sold at 40 to50 cent on the dollar. Um in the um peaks went up to exceeding a dollar. I think the highest we saw was $15 a $1.7 per credit in high demand markets just before tax reform in 2017 and then it's settled in in the 2020s to the mid to high 90 range.

So the corporations buy these tax credits which then give the developers upfront cash for development, meaning they can finance less development cost, meaning there's less debt service on the property, allowing lower rents to be charged on um units on an ongoing basis. I hope that was clearer than mud, but that's the the the basic flow of where the money comes from. All right. So, there's two different types of tax credits and they operate pretty differently.

I'm going to talk about 4%s on this page and really and and really that's that's it. We'll we'll focus mainly on the 9%. Those are more prolific. Um although I think we're seeing a shift to the 4%. So, um the 4% credits um are not they're based on tax exempt private activity bonds tied to each state's annual volume cap for those which is a federal limit set by populations and then states can issue those for various purposes.

And so the 4% credits cover less of the project's total construction costs and they are considered awarded on a ruling basis. It's not a there's a once a year deadline and then they are evaluated and awarded. It's a less competitive process, but it's still based in the qualifying criteria within the QAP. So the tax um private taxexempt private activity bonds or PABS are then awarded to the developer which then they can sell in order to acquire that upfront funding.

And we quite often see um 4%s are for larger projects, meaning typically over 200 units. On the 9% credits, um smaller, usually under 200 units, sometimes under a 100 units. Um and the 4%s are are non-competitive. It's it's kind of a first come, first serve. still goes through a very public, very um extrrenuous process um to be awarded those credits uh um to be awarded those credits for use. So the 9% credits allow a developer to use more of the credits towards the project usually.

I'm going to interrupt real quick. Yes. I'm sorry. There's a question in the chat um from Ana. Anya, I don't know if you want to ask it or if you want me to read it. I'm happy to do either. Uh good afternoon. I was just wondering so the the investor purchases the tax credits, right? So they're assigned to him the investor and then do they use it against their income or how does investor use the tax credit?

Um the investor once the units are occupied is allowed to claim the tax credit on their annual taxes for a period of 10 years. Okay. Thank you. You're welcome. I have a little bit more detail on that coming up. Um, so the 9% credits, there's an an annual application process and it is much much more competitive than the 4%s. It is highly competitive. Um, and it's not cheap to apply for these. There are all kinds of um, requirements, market studies, there's a $5,000 application fee.

Um, it's not something you put together overnight. It's not something you really um by the seat of your pants apply for. So, we're going to focus on the 9% credits. That's what has created the most units in our community. Um the only 4% project in our community is the new Sierra on 66. You may also hear hear it called the Roars project out on West Route 66 uh past Woody Mountain Road. That's the first 4% and it opened. it just opened and so that's the first 4% um project we've seen in Flagstaff.

So the QAP or the qualified allocation plan is sets forth a criteria for um developers and developers can be for-profit or nonprofit to apply for tax credits. Um it has priorities and scoring criteria, all of these lovely things. The QAP is currently updated every 2 years overall, although they can make minor annual tweaks. The QAP must be signed by the governor in order to then be released to the public.

And quite often, um, folks get frustrated with city staff when we're working to support one of these because it always feels like it's the last minute. Well, the QAP is usually released in mid to late December and the deadline is April 1st. And so, um, you really have to have your ducks in a row before the QAP, the final is released. There's drafts released, so you have generally an idea of what's coming. Um, but it's a very short application window.

They do have um public hearings on the QAP, QAP criteria requirements um that um we attend. Um we offer comment in both verbally sometimes and in writing on things. Um there's a lot of focus on metro um areas in the southern part of the state.

For example, it's been years since this has happened but uh at one point in time they were incentivizing white roofs and we had to uh write in and say do do you mean white roofs or you looking for energy efficiency and their answer was oh energy efficiency right? Okay. So transit oriented design um they had points for and it was if projects were placed on or near the light rail. So we wrote in and said do you mean light rail or do you mean public transit?

And it turned out that they had a specific project in mind and in that case they meant light rail but they also assigned points for um for rural areas for location near public transit. So it's something we we pay attention to. Um, we often speak with the development community that often applies for these to be able to say, "What are you seeing? Do you need support on any concepts?

We often share our ideas and concerns." Um, and we found the Department of Housing is most often very very receptive to feedback as far as um ideas within the QAP. So, the deadline is April 1st or if April 1st is on a weekend, it's on the day surrounding that weekend. When they first changed it to April 1st, we kind of thought it was a joke. It's not a joke. Um, so scoring criteria, number of units, what's the community doing, what are the locations like, proximity to amenities is huge.

And by amenities, they're talking about grocery stores and public transit and schools and healthc care facilities, those types of things. And so it's really that really drives the location of a lot of these.

And it makes sense because you want low-income individuals positioned to be successful within a community, but it also means that a lot of the development you see is often concentrated in city centers or in um activity centers within a community because they are seeking the points related to um related to prox proximity to amenities. There is a category allowing for rehabilitation of existing LITC units.

We've had one development here in town that was built in 1997 and in year 14 right before their expiration. Um it was sold and if you could see me I'm using air quotes is sold because it was sold to a a corporation made up of a lot of the same players but it allowed um tax credits to be um invested in the property to rehabilitate it to um modernize it. it added a unit to it. Um, and rehabilitation of those is is of course often cheaper than than new construction.

One of the other big things we'll talk about related to LITC for Flag Staff is a rural versus metro allocation. So, Arizona receives around 22 million annually. That's in the past. They did not update this number for the coming year. Um, and they award, and this will be the same for 2526. Um there's a rural set aside of three tax credit applications. So in and rural is you can see here. Thank you Aiden. Um rural is 13 counties and puma and maricopa are the only metropolitan counties.

So the balance of state is what it's called for rural. In 2425 there were three rural awards and seven u metropolitan awards. So ADO will make up to three 9% LITC awards in rural counties if there are sufficient eligible applications. I don't recall a year where there were not sufficient applications. They may not have the highest points. There's also a tribal set aside of two awards for um tribal projects.

And then there's there's a new one that came in a couple years ago called innovation or unique opportunities where they say they may or may not award credits to one application outside the QAP scoring selection criteria based on one or more of the following considerations. unique construction methods, innovative approach to development, scale of community impact, regional distribution, unique funding or leveraging opportunities and discovery, not discovery, I'm sorry, disaster recovery.

Discovery is disaster and recovery combined. Disaster recovery response. And this category is solely at the discretion of ADO. This category was added to allow them to be responsive to things that are changing within our world. Um, so if there is something that comes in that is unique or taking advantage of a unique opportunity that there's still an ability to do that without waiting another entire calendar year for that. Okay. So we used to have Yes. Did I hear somebody?

I thought I heard somebody, but Sorry about that. Sorry about that. That was me. Sorry. Okay, no worries. Um, so we had in 2021 the Arizona created the Arizona State Housing Tax Credit. There are, I believe, 31 states including Arizona and um the District of Colombia that have a state had we had. So I'm going to say have, but not anymore. So in 2021, we became the 32nd state to create a state housing tax credit, which works similarly to the federal except that it was at the state level.

Legislature allocated $4 million per year for four years. Um, and it was intended to leverage the federal LITC money. So as construction costs have increased, as the legal fees associated with doing these deals, etc. have increased. Um the tax credit dollars don't go quite as far. So there's always a need for gap financing. The state housing tax credit worked to finance um projects to add a little bit more money to projects that were already awarded the 9% credits.

Unfortunately, this program sunseted in 2025. Um, and we are the first state to establish and then end a state housing tax credit. It's not really a distinction um I think we want. However, there is an effort this year um that we've been working on where and there's two bills in the house um 2644 and 2804. It looks like the language is identical but with different sponsors.

I haven't had a chance to compare them exactly word for word, but it is asking um to reinstate the state housing tax credit at $2 million specifically only for rural. And so, do we know where these bills are going to go? No. We're like 2 and 1/2 weeks into the legislative session. Um but there is at least some discussion around the value of the state housing tax credit coming back on a limited basis. Um there were efforts made to renew it last year. The legislature unfortunately chose not to.

And so this was it. I mean $4 million per year for four years doesn't sound like a ton of money, but that money can really um be critical in closing in closing some gaps there. So when you see a tax credit award, let me look ahead. Okay. Yes, I do have this coming up. I'm going to pause that thought and go here. So, local impact here in Flagstaff. Um, these are the developments that have received tax credits.

Um, you can see down here is utilized qualified uh qualified contract process 42 um units. Village at Lake Mary was a long time ago. These three are one developer um and they have they've been successful in utilizing that process unfortunately. Um fortunately for them they did not break the rules. They did not do anything wrong.

Um for Flagstaff the average um development size is 64 units with the the smallest is Sharon Manor 2 is 16 units and the largest for 9% is 124 which was um village at Lake Mary. You can see the numbers um for the bulk of them are under 100 and except for 221 the Sierra on 66 at the top that is the 4% project. So, we have actually partnered in some way, shape, or form on all of these. For example, on I'm looking for the name. Cedar Crest used to be known as Mountainside Village.

This is the one that uh rehabilitated the units at year 14 um and reuped their uh affordability commit commitment for an additional 30 years. We actually sold the land to the developer. um they make interestonly payments with a balloon at the end. And that's why we were able to insist on longer affordability requirements um within that one.

And then when they um renewed or went and um refinanced essentially through tax credits for rehab um we were able to renew that affordability agreement and extend it. So, I would say that's the one we've had the most um where we had the the largest investment. Some of these we have about $100,000 in. And you would think why in a multi-million dollar project would $100,000 make a difference? Well, the QAP has points for local involvement.

And while it's just a drop in the bucket for development purposes, um when you this is so highly competitive, one or two points can make an make a difference between an award and not an award. So that $100,000 that we put out as a loan typically um makes makes a difference in award factors occasionally and we always make those contingent on award of tax credits. If they don't get tax credits, they don't get the money. Um, and so you can see the units here.

We have not had a successful tax credit or and I say we, the city doesn't apply for these at this point in time. In coming years, that will be different. Um, but we typically have not. So I say we as a partnership with with developers or we as the community haven't had a tax credit award. Um, and that's for a a couple different reasons. It seems to fluctuate. the reasons tend to fluctuate. Um, and they're very project dependent.

It's not like Flagstaff has been targeted or blackalled, any of those things. It's it's project dependent on what's coming in. Construction in rural areas is often more expensive than construction in metropolitan areas. So, the credits tend to go further.

and Department of Housing also put in which we have requested to change and I don't know if this one was successful in being changed this year or not but where developers are allowed one application a year um one successful application a year and so you've they've stopped turning in multiple like one for rural and one for metropolitan and that was our request is um don't just say one award per year.

you can they can do multiple applications but they're only going to get one award is to say you could get one award in rural and one award in metro um so that we weren't being passed over for the larger more lucrative projects in the major metropolitan areas that have way more resources than we do. So with that we have an example for you. So villas on Lake Mary besides Sierra on 66. So, this one opened um in 2024. There are 76 units. It is 100% affordable.

The only I'm going to go back one slide. The only mixed rate development we've ever had, mixed income development, is Star Point in Flagstaff. And they have 68 affordable units. I want to say they have seven market rate. It's not significant. Um and we often see that the 100% affordable units up here. pencil better. The other things is that the incentives that we have both regulatory and financial incentives from the city side are more lucrative if you're doing 100% affordable.

Um so examples here um income limit villas on Lake Mary at 60%. Their LITC award in 2021 was $2 million. And you're thinking $2 million is nothing. They get an award of $2 million. Um, but the corporations are that's $2 million per year. So, they sell the corporation. Um, wow, my brain just went blank. I'm sorry. They sell the corporation $2 million. They are able to claim that over 10 years. So, it's $20 million. Yes. Out of zero. Good job, Sarah. It's They sell $20 million worth of credits.

they get back, let's say it was 90 cents on the dollar, they get back um that amount for upfront construction financing. So, it's never enough money. Um we were able to support this project with $325 in incentive funds, um which is city money, and then $397 in ARPA funds, um which is federal money. They also were able to access zoning code incentives using a a density bonus, a parking reduction, and a landscape reduction.

So, when folks say, "Hey, city, how are you guaranteeing that the city's investment in these affordable units is being protected?" We're really the small hammer in this box. um because the corporations that are claiming the tax credits must prove the low-inccome occupancy and that's done through some very intense auditing etc.

We just ask for a copy of those reports to show that they're in compliance um because the corporations without being able to prove the income occupancy and the developments are unable to claim the tax credit and so it's um vastly in their favor to make sure that these things are in compliance. I'm not aware of any development in Flagstaff that has been out of compliance with their investor requirements or with ours um in all of my time working here with the city.

That is a very highlevel flyover. I'd be happy to answer questions. Um, I want to um give some kudos here to Jen Michaelelsson and to Sully Moore and Justina Costa who are the primary staff that work with the tax credit developers that call. We field probably half a dozen or more um interested developers per year. We have several things working in our favor that bring extra points to development um in this arena.

And so fairly often we have developers saying, "Hey, we'd like to chat with you about this site or what does this look like?" And that team does an excellent job of working with those development teams. And I believe this year we are anticipating a tax credit application um coming out of our well, not from us, a tax credit application being made for a project in our community. Thank you so much, Sarah. So, okay.

I was going to say there's a question in the chat, but it was apparently just answered. Um, does does the commission anybody else on the commission have any questions or comments? All right. I don't see any C's or Q's in the chat. Oh, I see another Q from Dana. Go ahead, Dana. Sorry, Sarah answered the question about the crystal ball for this year. um and if we thought any um things were coming forward. But um my other question has to do with RAD and public housing.

So I think there's an future intersection between LITC and RAD. Is that accurate? And if so, can you just quickly explain how how that might work together? I can. I'm not sure that that the commission has the same knowledge you do about what RAD is. So RAD is C is the rental assistance demonstration program um by HUD which is a program to revitalize or redevelop public housing units. And it's the project that we are looking at.

It's the project it's the program we'll be utilizing to redevelop our public housing sites here in Flagstaff. And so, um, we can only ever have 265 units of public housing due to an act of Congress called the Fair Cloth Act. And so, while we'll be able to increase the number of units on our public housing sites because of their low density, we can only ever receive affordability subsidies for 265 of those units.

So, to increase the number of affordable units, we'll have to utilize other funding sources. And LIITECH is one of the biggest funding sources um coupled with RAD to increase unit counts. And in fact, there are some preferences within the QAP specifically for um housing authorities or nonprofits utilizing the RAD process in order to create additional units. It's a coupling of two very powerful funding sources that leverage each other very, very well.

So in the coming years um it's possible there could be a 2027 application LITC application for RAD but that is if absolutely all of the stars and the moon and all the planets line up um in a fantastic formation that allow us to hit the 2027 um deadline. I think 2028 is more likely. and the planetary scientist who serves as the chair of the commission can tell you how rare it is that we have perfect planetary alignment.

So, while we're striving for that, I think it's more realistic that we will hit a 2028 deadline. Um, but we haven't written off 2027 if we're able to get there. Did that answer your question? It did. Thank you. And then, are you guys looking at one LITC application or would this be like a multi-year thing? um that has yet to be determined um except that we have two main sites and so it given relocation requirements is likely going to require us to develop those as separate projects.

So I would say that it would be two tax credit applications. The duration between those applications has yet to be determined. Well, thank you. You're welcome. Thank you, Devon. Thank you, Sarah. We have a comment from Jennifer Michaelelsson. Yeah, thanks. I just I wanted to go back to the litec project that we are anticipating um that Sarah mentioned just like a little bit more information about it. It's uh current it's called Lone uh Lone Tree Ranch and it's intended to be a 4% LITC project.

Um the developer on it is called Lincoln A. Um, and they uh have they're a little unique because they're the only developers I've been aware of that have submitted for resoning uh to achieve a LITC project. So, um they're in the process of um you know the resoning application process with the city. They've been working with us for up to two years now.

So, I just wanted to emphasize that they've they've really they've invested um a little bit extra time and money um to achieve their affordable housing project. A little bit more than um would be desirable, I think, for for LITC developers. So, we don't have public hearing dates for the for that reasoning case yet. I think they're hoping for March, April.

Um, so I'll I'll let the commissioners know when um they'll be at the planning and zoning commission first and then council for their resoning. So just wanted to let you guys know and it's a oh I'm having a hard it's 141 168 units I think. So that's how big that project is. Thank you Jen. And correct me if I'm wrong, but that development is coming in on some land that has a surviving old development agreement obligation. And when I say old, um I think it predates my 25 years here.

So, it's surviving and they're coming in on that property and they're exceeding what that development agreement obligation was for sure. area. They part that older ordinance is part of the reason why they have to go through the extra resoning process to change the the current um affordability commitment um associated with that that platted area. So um yeah, so it's it's you know definitely worthwhile.

I'm I'm pretty sure council will be pretty excited to to hear about this resoning case, but um yeah, it was just it's just it's just been a lengthy process for them. Um, and I'm excited for them to be finishing up pretty soon. So yeah.

And it's an example of where sometimes we say we negotiate with the developer and there's a commitment and then we see something not built and not built and not built and not built and then all of a sudden there's a different developer interested in that land and those requirements survive. And so, you know, sometimes we don't see fruits of labor for many years. Thank you so much. Um, Devana, I'm going to jump in with a question of my own and then I'll come back to you. Is that okay?

Or is it directly related to the Was it directly related to Jennifer's comment? Well, it it kind of was. So, to me, Jen, that's a 4% deal that is not on the April 1st 9% deadline. So, do we have any coming forward for to meet that April 1 deadline? I I I thought that's what Sarah was talking about.

No, we do not have I think we were what was we've had um I was thinking last summer and fall I think we had about four LITC projects all up in the air all in different phases of of potential um both 9% and 4% and a couple of them fell off. Um, the most promising one, the most promising 9% deal uh fell off.

It was it was with the FUSD property, um, FUSD is really interested in trying to pursue a LITC project on their property, but that developer couldn't really get it to to to make sense at this time. So, they did not end up applying.

the other 9% group that had expressed interest and was working within the community um encountered challenges with the site um that they had chosen that um made it more expensive and they I don't think they've given up on Flagstaff, but they definitely uh won't be applying for this coming round.

And we don't often talk about who's applying for what because it is a very public it's a very competitive process and so we don't want to be feeding developers like hey you know who else is applying for this over here. They take care of that communication and while if they asked it is public information but we work to remain impartial to all of them. Thank you for the clarification. Great. Thank you. That actually leads into um my couple of questions.

Um the first one is as I understand it, there's a mandatory information session that's available like once for a 2-year application period. Is that correct? From the city or from the state. They um a mandatory annually. Oh, it's annual. To apply, you need to attend the information session.

And then now there's a pre-application piece where you must express interest in order to turn in a final application, which gives the Department of Housing a chance to kind of get a handle on what is likely coming their way. Um, they can also do something that which is called um pre pre-allocating is not the right word. Advanced allocation.

So they can award from the following year's credits, which they've been doing because things have been so expensive, which is really where that increase in credits this year will really really help um the state catch up a little bit. And so um there are some years where that are a little bit leaner in those credit issuances because they've been issued or obligated pre-obligation, that's the word I'm looking for, they've been pre-obligated to projects that were awarded in the past. Okay.

So, do you have you found or heard from developers that that one time a year mandatory information session is any kind of a barrier to applications? Not really. No. The the barrier is the fact that we have a once a year application, not the requirements going with it. This is a really specialized field and so it's not it's either something you do or you don't do. It's a Yeah, we don't have developers that kind of dabble in it.

Um it's either So, but it is there are other states that have multiple rounds per year. We've talked to Department of Housing about that. Um, Devana and Dandy Flores and I, I think it was the three of us went down to chat about LITC and other funding opportunities and talked about, you know, what about a twice a year funding round and it is so competitive. Um, they have enough applications coming in.

ADO is not um I don't know how to ADO does not have excess staff and so this is a very labor intense process and so not only the application but then all the requirements following up with them there's also a placed in service date it can't just linger so if you're tax credit awards are usually announced in June or July they have um until December 31st 2 and 1/2 years later to get everything built and a certificate of occupancy issued.

And so they're also looking at project readiness and as developers um find out what the credit market is worth, what their syndicators say they can sell the credits for, all of those things. It's kind of a really dynamic process for probably the first six to eight months after award where they're trying to line up all the other funding sources. Um, put bow ties on all their little ducks standing in a row in order to be able to break ground.

So, um, and Department of Housing is very involved as they can be to be supportive throughout that process as well. Okay. Thank you so much, Sarah. That was incredibly informative. Do we have any more comments or questions from the commission on litec? I will also point the commissioners to a c a comment by um council member house and by Adriana Fiser in the chat pointing to um the federal RAD information as well as the city of Flagstaff's RAD information.

All right, moving on to uh item number eight,formational items to and from commission members, staff, and future agenda item requests. 8A is an update from the housing authority liaison, who is myself, and Sarah will save me as usual from anything I don't I don't cover or forget. Um at the uh housing authority board meeting on oh do I have the date in front of me? On the 15th of January, uh we approved two resolutions.

Uh one to update section 8 housing choice voucher administration plan and one to update the admissions and continued occupancy plan. These are both required uh plans in order to remain qualified for um housing authority funding. So these had to be done. There's um details in there that I'm not going to go into detail unless Sarah wants to go into specifics, but um these are kind of a thing that we generally have to do. I think it's every 5 years. Is that correct Sarah? Um thank you chair.

Sometimes these the ones we just did our implementation of the housing opportunity through modernization act called HOTMA which um we HUD's been working on implementation for a number of years and so when they say okay now it's time for these we do those and so um we'll still have a little bit more of HMA to implement because there are a few requirements where the HUD computer systems are not um able to handle uh the data that we're they're not able to handle what we're we're being required to do.

And so we've done all the changes except the ones that HUD has not set up for us to actually do. So you were an entertaining time frame. What's that? Yeah. And we had an entertaining conversation about that at the uh board meeting as well. All right. Thank you, Sarah. Um item 8B. Oh, go ahead. What was that? Okay. Item 8B is update from housing commissioners and otherformational items. Do we have any more updates from housing commissioners?

Okay, I don't see any hands raised and I don't see any C's or Q's in the chat. So, I'll move to 8 C. Update from housing staff. Do we have any updates from housing staff? I have a C from Christine Pavick. Hi everyone. Um I'm Christine Pavick, housing and grants administrator for the city housing division and I just have two quick updates. One on behalf of the um Cookanino County continuum of care. Most of you have heard of the point in time count.

Um this is a count of unsheltered homeless folks in our county. Um this count is required by um HUD and it it helps us secure funding for um shelter services um emergency housing programs. It's going to be taken undertaken next week and they are looking for volunteers. Um usually it's like a 2 to three hour time period next Monday, next Wednesday, Thursday or Friday. So if you might be interested in volunteering um it's really impactful and meaningful volunteer opportunity.

um reach out to me and I can get you um that information for volunteering. And then another upcoming volunteer opportunity will be for our community development block grant program. We are kicking off next Thursday our notice of funding availability for CDBG funds. Applications will do be due back about 3 to 4 weeks after that and then we will have a committee that reviews these applications and helps us to make funding decisions um for allocation and award.

And so we typically like to have one to two housing commissioners on that committee. Um it involves reading maybe three to six applications depending on what comes in. Um and then meeting for about an hour to two hours just to discuss scores and um see if we can find cohesion as a group as to what kind of allocations we'd like to make. So if you might be up for volunteering for that, please let me know. Um and I just really appreciate you all. Thanks so much. Thank you Christine.

Um, Adriana had her hand up and then we'll go back to the chat. Good afternoon, housing commissioners. I have an update on the 10-year housing plan. We have good news. We are We just completed another strategy, create 4.7, which requires staff to continue to evaluate and amend the current accessory dwelling unit zoning code standards with the goal of increasing supply.

This is completed through a zoning code amendment um made to comply with HB2720 but also as a collaborative ADU standard plan library led by by the sustainability division was finalized just last week. So we are now up to 13 strategies completed. The other update that I have is another bill a Senate bill from 2024 um Senate Bill 1162 began requiring municipalities, certain municipalities, to submit data to the Arizona Department of Housing for a housing needs assessment.

This data requires projections for population growth, workforce, and employment demand. The housing division in collaboration with the Planning and Development Services Division submitted this data in December. So, that can be viewed now on our 10-year housing plan web page, and I'll be sure to share that link with you. Thank you very much. Thank you, Adriana. Uh, next up is Sullivan. Hi, folks. Um, I got a couple items for y'all today.

Um, the first one is the rental incentive bond program has a no notice of funding availability out right now. Um, we'll be looking for one or two of you commissioners to be on the scoring committee for that. Um, exact date still being worked out, but it would be after it closes on February 9th. That's when all the applications are due. Um, probably in the next couple weeks there after that. So, I'll be sending out an email shortly um to all of you.

And if anybody's interested in being on that scoring committee, please let me know. I'll add you to the list. And then the other item, we have been working on an RFP for 3500 North Fort Valley Road. Um sometime I think it's called like the Sunflower parcel. Um it's about three acres that is now with procurement. We worked pretty closely with the real estate department to put together that RFP and um that should be getting posted here soonish. Exact date still coming but soonish.

Um but yeah, we left it pretty open-ended to try and really get some creative ideas flowing and some interesting proposals coming through for what to do with that uh space. But that's cool. Thanks. Great. Thank you, Sullivan. Next, we have Jennifer. Thanks. Um, I'm just gonna stick to my update. Just going to focus on um the adaptive reuse bond program. Um, it was it's just come on really quickly and we've had a lot of applications and funding is going really quickly.

So, um, it's a it's a pretty good update. Um we had the adaptive reuse program was adopted by council last September and then we've had two applicants um for funding uh very quickly after that within a couple weeks of of council approval. Um council approved loan documents for roughly uh $1 million each uh for two different loans. Um those approvals were in November and December and we were able to close on uh a loan for Flagstaff Shelter Services Project. Um it's escaping me.

The cr the lantern, not the crown. It was a a $1.1 million loan for uh the lantern. We closed on that loan on uh New Year's Eve. Um so that was really um exciting. That was technically the first um bond pro that's like the first uh program funding to have been closed on. We're we're in the works to close on the second loan for uh I think it was $1.14 million um for the Western Hills project. Um we don't have a date on that yet, but it's coming.

Um and actually just last week, we received an application for basically the remainder of the funding. Um, so I'm just going through that application right now, you know, verifying it's eligible. Um, so we may have uh uh loans for that upcoming project uh going to council in the next couple months. So we're um I'm just excited that it took off so well and um we might have all that $3 million spent by the spring. So that's my update. Wow. Thank you, Jennifer. Next we have Aiden. All right.

Hi commissioners. Um I just wanted to give an update on the city website. Sully and I finalized the housing bond web page. So it now includes a expenditure tracker um showing the Proposition 442 uh allocations as well as the program spending. It is um updated quarterly and it has also four new subpages underneath it with um RAD chap the rental incentive bond program and the adapter reuse bond program showing the awards issued to date and the status of those.

Um, we're also working on transforming these pages and the tenure housing plan web page into a connect Flagstaff project page. So, it allows for easier public tracking on both the progress on the 10ear housing plan strategies and bond spending. Um, and we'll keep you updated on those pages once they're available. And it looks like Adriana popped in the housing bond link, so you guys can take a look at that whenever you can. Thank you. Fantastic. Thank you, Aiden. And we have Marissa. All right.

Thank you. Hi all. Marissa Mallaloy, housing specialist. Um, first up, we last year, Fanny May informed us that our current deed restriction is not in compliance. So, while homes being sold under our current deed restriction can still receive lending from Fanny May, they don't benefit from that quick turnaround and automatic approval that a deed restriction approved by their program would.

Uh we've been spending the last few months reviewing and editing the recommended deed restriction from Grinded Solutions to fit our programs and we're in the final stretch and reviewing the program with legal for approval. Additionally, it's budget season for us right now, so we're busy entering in next year's budget requests. And lastly, we had four families purchase their home with CHAP in December utilizing $164,000 in down payment assistance funds. Great. Thank you so much, Marissa.

Adriana, could we get the um request for commissioners to participate in those reviews from Christine and Sullivan in an email so that um it's easier for people to respond? Yes, thank you for asking that question. We were going to follow up with an email so that commissioners can easily reach out to both Sully and Christine. Thank you. Thank you so much. All right. Um I will open the floor once more for any additional information or updates from anyone. Going once. Going twice. All right.

I will adjourn the meeting at 2:34 p.m. Thanks everybody. Thank you.