More discounted housing offered
The Village at University Heights (Flagstaff, AZ) will have 10 two-bedroom condos priced as low as $149,000 for residents earning no more than $73,750 a year.
By J. FERGUSON
Arizona Sun Staff Reporter
Monday, October 06, 2008
Another local Flagstaff developer has answered the call from the community for more affordable housing options.
John Crowley has recently lowered the price of nearly 5 percent of his condo conversion units at The Village at University Heights by $30,000 apiece to help locals buy their first home. Crowley has created 10 permanently affordable units in the former apartment complex for Flagstaff residents earning between 80 and 125 percent of the area median income, which is currently about $58,000 for a family of four.
That means households earning between roughly $46,400 and $73,750 would qualify for Crowley’s condos.
Crowley, who owns Alta Sierra Development, has already sold 75 percent of the 207-unit development. He said he decided to lower the price on the units because some residents couldn’t afford to spend $180,000 to $200,000 on a mortgage.
“It was a marketing decision,” he said. “The units at the Village are priced at a much lower spot than our standard sales price.”
He said he will make a slight profit on the 10 converted and remodeled two-bedroom apartments units, even after they are repriced between $149,900 and $169,900.
Crowley said he remembers when demand for another affordable housing development, Rio Homes, had people sleeping on the steps of City Hall just for a chance to own a home.
“I can remember a few years ago when 200 people lined up at City Hall for a handful of affordable units,” he said.
A consultant for the city said in a report released last year that there was an immediate need for 800 units priced so that households making between 80 percent and 150 percent of the area median income could afford them.
A recently released study by the Arizona Department of Housing suggested the median rent on a two-bedroom apartment in Flagstaff would cost roughly what a standard monthhly mortgage payment on the discounted units would be.
David McIntire, the city’s land trust program manager, said the discounted condos would be a boon for city residents interested in owning their own home.
“We are excited to be working with Alta Sierra Development to create an opportunity for out workforce through permanently affordable housing,” McIntire said.
The city will play a minor role in the sale of the units, reviewing applications for the units and have its non-profit partner, Bothands, do income-eligibility verification.
The discounted units will be sold to qualified buyers, and when the units are put back on the market, they will again be sold to residents making between 80 and 125 percent of the area median income.
When the homes are resold, the sellers will be allowed to increase the price of the home by one-quarter of the market rate increase. So if a market-priced unit increases in value by $40,000, the affordable housing unit could be sold for $10,000 more than its original price.
Resale of the units will be left to the owner of the home, although the city is likely to notify residents on affordable housing “interest list” that unit is for sale. Currently, there is 200 persons on that list.
Crowley is optimistic his affordable units will be well-received by city residents, but he acknowledges the local real estate market is in a slump.
“We just don’t know how well it work until we try it,” he said.
Those interested in the units can call either The Village at University Heights at 214-8500 or David McIntire at 779-7632, Ext. 7218.
J. Ferguson can be reached at 556-2253 or jferguson@azdailysun.com.
Income cap hindering sales
Despite an interest in the community for affordable housing, two resale units at Rio Homes priced around $160,000 are struggling to find buyers.
With a cap on the income of buyers of $47,200, the city acknowledges it is difficult to find qualified buyers.
David McIntire of the city of Flagstaff land trust program, confirmed that the city is in negotiations with AzNorth, the developers of Rio Homes, to increase the cap from 80 percent of the area median income to 125 percent.
He said he believed by changing the income restrictions that the homes would be able to find a buyer.
Devonna McLaughlin, the assistant director of local housing nonprofit Bothands, said income and price are the deciding factors for buying income-restricted homes at the Rio Homes development.
“Either of those aspects are going to be a factor in selling those homes,” she said.
McLaughlin said another reason why more people are not buying the Rio townhomes despite the attractive price is a fundamental misunderstanding about the economy. She said people are equating problems on Wall Street trickling down to their local bank when they try to qualify for a loan.
“It is a misinterpretation of what you are seeing every night on the news,” she said. “Folks still can get loans.”
Affordable housing options in Flagstaff
Qualifying income* Units available Price Estimated eligible demand (households)
Rio Homes $35,400 to $47,200 2 $160,000 (approx) 200
The Village $47,200 to $73,750 10 $149,900 to $169,900 800
* Family of four