It’s no secret that Sedona is an expensive place to live. That, coupled with an increasing number of short-term vacation rentals reducing the long-term rental market, has resulted in what some are calling a crisis.

The city of Sedona is accepting request for proposals from consultants as part of a planned housing needs assessment and five-year affordable housing action plan. 

According to Sedona Assistant City Manager Karen Osburn, housing diversity and affordability have been established as Sedona City Council priorities. 

“Given the broad range of housing needs and possible solutions, it is prudent to develop a comprehensive plan for how best to address the issues,” she said. “Especially now that council has appropriated $2 million for this purpose, we need to identify where and how those funds can be best utilized.”

The affordable housing funds can be spent for any activities that directly support the creation and maintenance of affordable housing, she said. The plan is intended to identify specific ways those funds can, should and will be used. Some examples may be down payment assistance, land acquisition, low-interest loans and other subsidies that might support the creation of affordable housing.

Request for proposals will be accepted until Wednesday, July 17. Osburn said the city has been able to take some steps with existing staff in terms of addressing this issue. This has included identifying and implementing certain regulatory changes to promote and facilitate housing diversity. However, Sedona is a small city without an affordable housing department or staff. 

“Affordable housing is a particular specialty area that requires expertise we do not have in-house,” she said.

The specific objectives of this plan are to:

• Define the gap between the current housing options and the number and type of housing units needed by the community, understand needs, prioritize areas of need.
• Develop recommendations to address the gap between the necessary number of housing units for the workforce and households below an income level able to compete in the open real estate market for housing.
• Develop strategies to guide future decisions regarding removal of regulations, resource allocation and policy and programmatic changes, which will result in bridging current and future housing gaps identified in the needs assessment.

At the end of the first quarter of 2019, the median single-family home cost in Sedona was $562,500, more than double the Arizona median cost. With a local median area annual income for a four-person household of approximately $56,000, homes at these prices are unattainable for the majority of the local workforce, Osburn said. 

Renting does not appear to be a more viable option. While the city lacks comprehensive data on rental pricing, review of rental listings at the time of this request show very little available, just 28 total units citywide ranging from $1,550 to $4,500 per month. This means there is nothing available at or below $1,200 per month, which is what that same family could afford if they spent 35% of their gross income on housing, assuming modest utilities expenses. 

“The lack of availability of rental housing has been exacerbated by the passage of Senate Bill 1350 preempting the city from prohibiting short-term vacation rentals,” Osburn said. “Since the new law was enacted in 2017, Sedona has seen a proliferation of short-term rental activity in and around the community, driving inventory down and prices up.

“Surrounding communities are no longer an affordable option for many. All told, I believe many would characterize all that as having resulted in a crisis.”

In the past, council has said it does not wish to be landlords. But as time has gone on and this issue has become more prominent, that feeling is beginning to change.

“I think the council has come to recognize that the city will have to play a more prominent role in order to see affordable units develop,” she said. “With that said, even if the city were to have some ownership stake in future housing units, day-to-day management would likely be outsourced.”

The housing needs assessment will provide an analysis of the current, as well as the future, needs for affordable, workforce and other housing options, Osburn said. This will be reported in relation to the Area Median Income. A demographic profile of the city will include employment and transportation data, population and income data and housing costs, availability and demand data. 

The housing action plan will identify one, three and five-year quantifiable recommendations to bridge those identified gaps. The consultant will analyze current housing conditions. This will include identifying housing needs and strategies across the housing continuum, she said.

In terms of how long the study will take, Osburn said they will know more once proposals are received by July 17, but the city estimates nine months. 

“Once the action items are identified the hope is that we will begin to pursue those,” she said. “Without knowing exactly what those might be, it is hard to say what the exact next steps will need to be.”

Ron Eland can be reached at 282-7795, ext. 122 or by email at reland@larsonnewspapers.com