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In this file photo from 2015, Katherine Vaughn, right, and her nephew Jeremiah, stand in front of their new Habitat for Humanity home under construction in Flagstaff. Habitat is a nonprofit that might tap funds from a $25 million housing bond placed on the November ballot in Flagstaff.

Backing off from $35 million, the Flagstaff City Council narrowly approved placing a $25 million affordable housing bond on the ballot in November.

If approved by voters,  the city would have a fund devoted to making housing more affordable for 20 years to come.

 Mayor Coral Evans made an impassioned plea for support of the measure. Councilmembers Celia Barotz, Charlie Odegaard and Scott Overton all were opposed, either because of the size of the bond or on policy grounds.

Evans read excerpts from news articles on a lack of affordable housing in Flagstaff spanning 60 years to help make her point.

“Affordable housing is everybody's issue. We talked very clearly in 1959 on how it’s tied to economic development, the economic sustainability of our community and workforce,” said Evans. “We talked in 1989 about the same issue and now we are here in almost 2019, still talking about it. I think it’s high time that we try this; that we put this on the ballot and we let the community have a more rigorous conversation about this because if not now, when?”

On a state and federal level,  housing subsidies are generally geared toward helping those who make 80 percent or less of the average yearly income for an area. The city, however, is not limited by this -- the money could go toward helping households with a range of incomes and occupations.

Council could have approved up to $35 million in bonds, with three members in support: Evans, Jamie Whelan and Eva Putzova. A fourth, Jim McCarthy, had reservations and eventually went for $25 million.

Barotz said she would not be comfortable going any higher than $10 million for bonds as she did not want to use up the city’s whole bond capacity on housing when there are many other issues that the council may need to issue bonds for.

Approval of the $25 million bond by voters would limit future city bonds to another $25 million until 2037. Had the council asked for the $35 million bond, the city would only be allowed another $15 million in bonds.

 The bonds, if approved, will be paid off using the secondary property tax, which would not have to increase because bonds will be sold only as old ones are retired.

The move comes as a new report by the Arizona Housing Coalition shows Flagstaff with the biggest gap between average rents and wages of any major city in the state (see related story).

The language of the ballot measure will give the city some flexibility in using the bond money from both the supply and demand sides. In addition to new construction, redevelopment and rehabilitation, and acquisition of new land, the city could also provide loans and grants to people looking to put a down payment on a house or turn a dilapidated house into a livable one.

Housing director Sara Darr said the city already has programs whose goal is to encourage developers to build affordable housing and home-buyer assistance programs such as down payment and closing cost assistance, but this bond would expand those programs drastically.

Because of this, Darr said although specific numbers would be only speculative at this point, the bond has the potential to benefit more than 1,000 households. She added that more information would be available as the election nears. 

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The homebuyer assistance portion of the measure was almost deleted after Councilmember Odegaard contended that loans and grants generally help only one individual at a time rather than the whole community.

“Basically, it’s wealth redistribution,” said Odegaard. “And I struggle with that.”

But the mayor fought to keep the language and pointed to herself and Whelan as two individuals who would not be where they are today without help. She added that there are numerous indirect ways the community as a whole benefits from such programs.

The measure also includes the creation of a community advisory committee. The group of experts and community members would be appointed by the council and have the goal of vetting projects that meet the priorities of the housing bond.

The housing bond joins a transportation ballot package worth nearly $300 million for “congestion improvements,” including $72.4 million for the proposed Lone Tree extension and railroad overpass.

Chances for passage of the housing bond appear good, based on a recent survey commissioned by the city. Based on a phone survey of 400 likely voters, the city found that 91 percent of respondents said finding housing in Flagstaff they can afford is difficult. Additionally, 66 percent of voters supported the secondary property tax going to fund housing solutions and one in 10 voters don't believe they will still be in Flagstaff in five years because of the high cost of living.

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Reporter - Government, Development

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