Flagstaff affirms $1.82M developer contribution, approves nine-parcel housing strategy for council
FLAGSTAFF, ARIZONA — September 2, 2025

Flagstaff affirms $1.82M developer contribution, approves nine-parcel housing strategy for council

Flagstaff Housing Commission received comprehensive updates on 10-year housing plan progress (20% strategies completed, 2,161 units constructed), city-owned land development recommendations for council presentation, and notable $1.82M financial contribution from Pinehaven developer in lieu of affordable units.

Flagstaff Housing Commission Embraces $1.82M Developer Contribution and City-Owned Land Strategy Ahead of Council Presentation

The Flagstaff Housing Commission met on September 2, 2025, to review progress on the city's 10-year housing emergency response and ratify a strategic framework for nine city-owned parcels designated for housing development. The meeting culminated with Housing Director Sarah Dar unveiling detailed recommendations to city council, balancing the immediate opportunity of a record $1,822,413 financial contribution from market-rate developer Pinehaven against the long-term challenge of distributing affordable housing across neighborhoods while confronting anticipated community resistance at previously controversial sites.

Key Speeches

"Flagstaff continues to make meaningful progress toward addressing the housing emergency through the creation and preservation of housing targeted resident support and policy advocacy. The city is laying a strong foundation for long-term impact. Despite this progress, the need remains urgent, particularly for workforce households, renters, and first-time home buyers." — Adriana Fischer, Housing Program Manager

"What we can do is we can incentivize developers to include affordable units, which we do through the incentive policy and various programs. And the other piece is that we can control how city-owned land that is not restricted in some way is utilized." — Sarah Dar, Housing Director

"Will there be community pushback? We see community pushback on private developers, including affordable housing in any area of the community. I think it's fair to anticipate it. However, my hope, my deep abiding belief is that the community now has a better understanding of what impact the lack of housing affordable to our workforce looks like and the impacts it's having on our local businesses." — Sarah Dar, responding to Commissioner Malazo on anticipated opposition to 180 Schultz Pass solicitation

Timeline

2024–2025 10-Year Housing Plan Annual Report:

City-Owned Land for Housing Inventory:

Pinehaven Rezoning Case Update:

Housing Authority Commission:

Housing Staff Updates:

Commissioner Elections:

Future Agenda Items:

Opposition

No formal organized opposition present at meeting (zero public comment slots used). However, staff and commissioners explicitly acknowledged and discussed anticipated community opposition based on 2017 history.

Historical opposition context (2017):

Current staff acknowledgment of opposition likelihood:

Underlying constraints acknowledged:

Support

Commission members expressed support through:

Project Details

10-Year Housing Plan (Adopted February 15, 2022)

Overarching goal: Reduce Flagstaff's affordable housing need by half within 10 years (by 2032)

Target scope: Support at least 6,000 low to moderate income residents; create or preserve almost 8,000 housing units with at least 10% affordable

Implementation: 13 policy initiatives, 58 comprehensive strategies, carried out through city budget and public-private-nonprofit partnerships

Progress (as of June 2025):

Proposition 442 Bond Allocation ($20 million approved November 2022):

Market conditions (2024–2025):

Pinehaven Rezoning Case

Case number: Not stated in transcript

Applicant/developer: Pinehaven developer (specific firm name not stated)

Project type: Market-rate ownership project

Units: 83 townhomes

Affordable housing approach: Developer elected to provide $1,822,413 financial contribution in lieu of constructing 10% affordable units (~8–10 units)

Payment schedule: Per-unit basis as each unit is constructed and completed

First read: September 2, 2025 (day of Housing Commission meeting); positive council reception

Second read and resolution adoption: September 16, 2025

Significance: Largest single private developer contribution to city's affordable housing fund; funds flexible for various city housing programs; will accumulate over years as project builds

City-Owned Land Parcels for Housing

Nine parcels total (7 vacant, 2 utilized):

  1. John Wesley Powell (Sharkbite)

    • Size: Large
    • Zoning: Within John Wesley Powell specific plan area
    • Target units: 125 (per Pine Canyon settlement agreement from mid-1990s)
    • Key constraints: Significant slope; cannot be gravity-sewered independently (requires pressurized system with lift station); coordination needed with John Wesley Powell Boulevard extension (area specific plan underway); possible shared use with fire department (with compensation for loss of housing land)
    • Parks interest: Complimentary use being explored
    • Staff recommendation: Hold — more work required as area plan finalizes and fire department clarifies needs

  2. Thorp and Aztec (Clark Homes area)

    • Size: ~26 acres
    • Zoning: Public facility (PF)
    • Current use: Multi-use field (parks) on bottom; housing development on back
    • Historical context: Original Clark Homes location (1930s–1940s)
    • Key constraints: Abandoned utilities; old foundations; state/federal deed restrictions on eastern strip (mid-1990s relocation of Aztec Road created restricted strip requiring state parks and federal [National Parks or Department of Interior] approval for any change; conversion process requires replacement property of equal/greater appraised value; timeconsuming state and federal review); infrastructure (clarification on sizing concerns); would require lease/use agreement with Flagstaff Housing Corporation (not city asset)
    • Concept units: 6–8 units from old concept plan
    • Head Start facility: Purple outline on site (complimentary use)
    • Ordinance: City ordinance designates property for park/museum use (can be changed by future councils but creates consideration); original boundaries unclear (surveyable)
    • Staff recommendation: Hold — state and federal restriction removal needed; infrastructure assessment underway with city real estate staff support

  3. West Street/Linda Vista (Safeway-adjacent)

    • Size: 1.3–1.4 acres (less than 1 acre usable)
    • Current use: Access easements (Cedar Safeway Shopping Center), public access easement (reserved at north end adjacent to residential)
    • Zoning: Not stated in transcript
    • Key constraints: Size too small to qualify as "last opportunity site"; not viable for standard funding sources without specialized funding
    • Historical context: Part of scattered site process; land identified for housing
    • Community history: Some opposition noted; unverified claim of "ancient native artifacts"
    • Staff recommendation: Hold for nonprofit opportunity or city-initiated project — wait for specialized funding opportunity to surface

  4. Lone Tree/Olori (south of Southside)

    • Size: ~5 acres (only ~1/3 acre buildable due to slope and floodway)
    • Current use: Community garden on top plateau; site has terraced topography
    • Zoning: Not stated in transcript
    • Concept units: 6–8 units (from old concept plan)
    • Key constraints: Slope and floodway severe; community garden fills non-buildable area; parks interest in neighborhood park on site (Southside plan identifies as housing opportunity site; housing funds previously used to upsize water line to support development)
    • Staff recommendation: Hold for nonprofit opportunity or city-initiated project

  5. 180 Schultz Pass

    • Size: 3+ acres
    • Zoning: Medium density residential
    • Key constraint: Regional gas line intersecting site (paved over only; cannot build housing on top)
    • Site design: Housing units on top and bottom; open space in middle over gas line
    • Concept units: 26 townhome-style units (from staff design)
    • Historical context: Original scattered site proposal location; removed 2017 due to "large amount of community opposition" (per staff); adjacent to county boundary; zoned for ~26 units max given gas line constraint
    • Funding: Housing funds used for purchase and utility stub-out
    • LASSC designation: Last opportunity site
    • Community opposition: Massive 2017 pushback; staff acknowledges likelihood of renewed opposition but hopes housing emergency awareness and bond passage may shift sentiment
    • Staff recommendation: Move forward with solicitation prioritizing development of housing units for local workforce (deliberately not prescriptive on rental vs. ownership or specific AMI to maximize proposals and flexibility)
    • Rationale: Unencumbered by other funding sources; need to see market potential; too small for low-income housing tax credit (LITC) project minimum unit requirements; does not score well for LITC proximity-to-amenities criteria

  6. Butler/Lone Tree/Sawmill (Old Lone Tree/New Lone Tree)

    • Size: Located between old and new Lone Tree roads
    • Current use: Real estate company office/staging for Lone Tree overpass construction (building with "mannequin upstairs")
    • Zoning: Highway commercial (allows housing above/behind commercial by right; does not require it)
    • Original deed: From Sawmill Development; designated for housing purposes
    • Historical context: Substituted for 180 Schultz Pass during 2017 process; was viable for LITC scattered site project (no longer viable under current LITC rules)
    • LASSC designation: Last opportunity site
    • Commercial viability: Previously negotiating with commercial developer for 2 commercial pads + 8–12 housing units; original agreement included ongoing funding via market-rate lease fees designated for city housing programs
    • Staff recommendation: Move forward with solicitation prioritizing ongoing funding for housing programs via public-private partnership
    • Rationale: Commercially viable; residentially viable; unique location with unique site characteristics; opportunity to create initial ongoing funding source for housing without new tax/fee or reallocation from other city programs (addresses Goal 3: create dedicated funding source); city has no current ongoing internal funding for housing programs; market-rate lease fees could flow to housing programs over time

  7. Siler Homes (public housing property)

    • Size: ~19 acres
    • Current units: 100 units in 74 buildings (~5 units/acre; low density)
    • Built: 1970
    • Zoning: High-density residential
    • Current uses: City housing office, activity center (Siler Homes Activity Center/SHAC), Tinkertopia, Head Start Center playground
    • Infrastructure issues: Gas lines installed with thread protectors instead of proper couplers (contractor error); system-wide joint failure several years ago; gas line inspections completed; minor issues remain; electrical wiring inadequate for modern appliances; plumbing parts difficult to source (1970s vintage)
    • Housing condition: Units not condemnable; not in dangerous condition; not forced into redevelopment (city choosing to pursue as opportunity)
    • LASSC designation: Last opportunity site
    • Staff recommendation: Continue RAD process (Rental Assistance Demonstration)
    • RAD overview: HUD program enabling conversion of public housing to long-term Section 8 contracts (not vouchers) with predictable escalating funding; allows private debt financing against property for redevelopment; resident protections guaranteed (no loss of housing, right of first return, Section 8 voucher if tenant prefers); complex funding stacks (12–13 sources possible); allows combination of public and private funds
    • Benefits: Shift from annual congressional appropriations uncertainty to contract with escalation features; enable replacement/reserve fund creation; long-term planning with predictability
    • Project status: Project management consultant selected via competitive process; final negotiations underway; contract pending council approval in coming months; project scoping underway
    • City office relocation: Tenant (city housing office) may need to relocate during redevelopment

  8. Brandon Homes (public housing property)

    • Size: ~22 acres
    • Current units: 127 units (~5.5 units/acre; low density)
    • Built: 1952–1962 (10-year build-out span)
    • Zoning: Medium density residential
    • Current uses: City office with maintenance shop; Cogdale Recreation Center (Boys and Girls Club)
    • Infrastructure: Plumbing system challenges (1952 vintage); maintenance staff skilled at retrofitting parts; insufficient capital to fully overhaul major systems; but units not condemnable or dangerous
    • LASSC designation: Last opportunity site
    • Staff recommendation: Part of RAD process (covered under broader Siler Homes RAD recommendation)

  9. Adjacent to Siler Homes (scattered site parcel)

    • Size: Not specified
    • Zoning: Not specified
    • Current use: Vacant
    • Acquisition: 2018 (funded by proceeds from prior city-owned land sales)
    • Unencumbered: No restrictions; no other funding source limitations
    • Intent: Incorporated into Siler Homes redevelopment as one neighborhood (not separate)
    • Staff recommendation: Continue RAD process (incorporated into Siler Homes redevelopment)

Historical City-Owned Housing Successes (Referenced in Presentation)

  1. Cedar Crest (formerly Mountainside Village)

    • Purchased: 1994
    • Units constructed: 1996, placed in service 1997
    • Total units: 81
    • Affordability commitment: 30-year (renewable)
    • Financing: City carries 30-year interest-only mortgage with balloon payment
    • 2015 refinance: Major rehabilitation; added manager unit (to 81); extended affordability 30 years from tax credit placement
    • LITC: First low-income housing tax credit project in Flagstaff
    • Model: City sold land with affordability requirements; city financed via deferred realization of financial return

  2. Rio Homes

    • Identified: 1996 housing plan (long-term hold)
    • RFP issued: 2003
    • Development agreement: 2003
    • Total units: 153 (30 affordable)
    • Structure: Public-private partnership; land sale for financial consideration + permanently affordable units
    • Timeline: Long wait (1996–2003) for infrastructure extension by adjacent development
    • Affordability model: First to pursue permanent affordability under Arizona law; raw documents created (no prior model); units later converted to land trust where appropriate; 3 units lost to market during 2008 recession (deed restriction not flexible enough; deed subsequently modified)
    • AMI target evolution: Originally 80% AMI; later raised to 125% AMI (local funds, local rules)
    • Build-out: 2005–2010 (Great Recession interrupted)
    • Proceeds reinvested: Sale proceeds used to purchase additional city-owned housing

  3. High Country Trail (Three Properties)

    • RFP issued: Same time as Rio Homes RFP
    • Total affordable units: 180 across three properties
    • Site constraints: High-tension power lines, slope, rock, difficult geometry
    • Properties:
      • Sandstone Highlands: Senior multifamily
      • Timber Trails: Family-focused multifamily
      • High Country Estates: Townhome-style tenant-lease-purchase under LITC
    • Structure: Public-private partnership; land sale for financial consideration + affordable rental units
    • Build-out: Phased over multiple years (separate tax credit applications)

  4. Habitat along Butler

    • Source: Remnant land from Butler widening/realignment project
    • Location: Butler corridor (four homes)
    • Units: Starter homes consistent with neighborhood architecture/style
    • Value: Utilization of city remnant parcels that would otherwise sit vacant

  5. Isabel Homes (Isabel Street)

    • Funding: CDBG (Community Development Block Grant)
    • Site acquisition: Purchase of 6 nearly uninhabitable relocated Navajo Army Depot units + Knights of Columbus building (used only for storage)
    • Work: Environmental remediation and demolition
    • Affordable units: 16 land trust homes
    • Developer 1: Love and Contracting (10 homes)
    • Developer 2: Habitat for Humanity (6 homes)
    • Location: Between Isabel and West, adjacent to Haljensen Recreation Center

  6. Land Trade (Butler/Loan Tree area)

    • Participant: Private developer (Woodshire)
    • Outcome: City traded property for developer agreement to include 1 land trust home within 6-unit market rate condo project; developer gained site benefits (face units toward Butler instead of side street; larger effective site)

  7. Woodshire and Butler

    • Adjacent parcel: Owned by Woodshire; expansion needed
    • City action: Issued RFP for sale of city remnant parcel with obligation to build 5 permanently affordable units
    • Developer: Sold to Woodshire (50-unit condo project)

  8. Isabel Street Apartments (Most Recent)

    • Acquisition: Land trade
    • Location: Between Isabel and West (between Mountainside Village/Cedar Crest and Isabel Homes)
    • Adjacent: Regional detention basin
    • Scattered site status: Part of scattered site proposal; developer obtained tax credits for one site but returned them (2018, tax credit market downturn)
    • LITC viability: Site too small for current LITC minimum threshold (originally 11 three-bedroom units)
    • Alternative: Housing Solutions of Northern Arizona executed long-term lease; will construct and manage 11 three-bedroom rental units
    • Complimentary use: Community garden (to relocate during construction; semi-public use adjacent to BMX bike park and detention basin)

Vote Breakdown

Approval of July 24, 2025 Housing Commission Meeting Minutes:

City-Owned Land Recommendations: No formal vote recorded on staff recommendations; recommendations to be presented to city council September 9, 2025, for work session; commission feedback to be incorporated into council presentation.

Individual votes not stated in transcript for recommendations to move forward with solicitations or hold properties.

Outcome & Next Steps

10-Year Housing Plan:

City-Owned Land:

Pinehaven Rezoning:

Adaptive Reuse Program:

Expanded Home Buyer Assistance Program:

Housing Authority Commission:

Future Agenda Items:

Controversies & Context

State Preemption Constraints:

2017 Community Opposition History:

Housing Emergency Escalation:

Financial Contribution Mechanism (Pinehaven):

Public Housing Redevelopment (RAD):

Land Use Constraints & Opportunities: