Pete Furman

Council raises workforce rent cap by 13.6% – Sedona Red Rock News

The Sedona City Council voted for a 13.6% increase in the rental rate cap for the city’s Rent Local program on April 8. Council spent 41 minutes considering the change, which had originally been scheduled to take five minutes.

The program was created in August 2022 with the aim of inducing property owners to rent their properties for terms longer than 30 days by offering a one-time financial incentive. Participants must agree to refrain from renting their properties as short-term rentals for one year after signing up and cannot charge rents that are greater than the monthly rental cap set by the city.

“We simply want to raise the rental cap to $2,500 per month from the original $2,200 per month,” Housing Manager Jeanne Blum said. “We want to do this to better align with current market rates and encourage more home owners to participate.”

“Participation rates do remain low because the rental caps are kind of misaligned with our market rates,” Blum said. “Most potential participants have been discouraged because the rental cap is below what they can bear.”

According to the information provided to council by city staff about the current rental market in Sedona, which Blum said was derived from an “ad hoc study,” the average monthly rent is Sedona is $1,762 for a one-bedroom, $2,424 for a two-bedroom and $3,553 for a three-bedroom, compared to U.S. Department of Housing and Urban Development fair market rates for Yavapai County of $1,293, $1,606 and $2,048, respectively. Blum also estimated that a studio would run between $1,200 and $1,900 a month, while the rent for the few properties currently partici pating in the Rent Local program is $1,500 a month to $2,200 a month.

Councilwoman Kathy Kinsella asked why staff were not suggesting that the cap be raised to $2,700 per month.

“It’s not appropriate,” Blum said. “It’s a burden.”

Blum also argued that raising the rental cap, in combination with the one time incentive, would bring a landlord’s potential return up to an amount closer to the market rate for a three bedroom home, or $3,333 per month. The one-time incentives offered through the program are $6,000 for a studio, $7,000 for a one bedroom unit, $8,500 for a two-bedroom and $10,000 for a three-bedroom, while those renting individual rooms can receive $3,000 for a single room, $4,000 for two rooms and $5,000 for three rooms. The program paid out $8,500 in incentives out of a budget of $240,000 in fiscal year 2023, $31,250 against a budget of $100,000 in FY23 and $14,250 against a budget of $100,000 in FY25, with the budgeted amount for FY26 having been reduced to $50,000.

A total of seven properties have been enrolled in the program; the council’s packet for the April 8 meeting states that three of those renewed for a second year.

Blum said that renting properties long-term would reduce maintenance costs for property owners over short-term renting.

“The increase covers the first year, gets closer in the first year, and then goes away. Maybe that’s why only three households have renewed their leases in year two,” Vice Mayor Holli Ploog said.

“Of course, if the incentive were available for multiple years, there would be more traction in the program, more longevity,” Blum said.

“Perhaps there are modifications in addition to the increase in the cap that we should consider,” Ploog said.

“The number of registered STRs has continued to increase over the life of the program, and yet we still aren’t getting meaningful traction,” Councilman Brian Fultz said. City statistics show that the number of STRs increased by 6.4% between 2018 and 2024.

“At what point do we say that this is a strategic distraction?” Fultz asked.

“I don’t think it is a distraction,” Blum said. “If it helps one family, in my view that’s successful.”

“The housing that we need is two- to three-bedroom,” Lindsey Hammersmith said during the public comment period. “I agree with the amounts that were brought up today.”

“What we’re seeing on the sales market is that a lot of these short-term rentals now are going out to market, and if they were sold today, I know of a local one, a three-bedroom, two-bath, that if I were to purchase that, my mortgage would be about $4,000 a month,” Hammersmith added. “So you really kind of perpetuate this needing to do a short-term rental continuation.”

“I’m fine with giving this a try as requested, but I’m skeptical that it’s going to work,” Fultz said, saying that “the average short term rental is still grossing $3,200 a month.”

“I’m willing to try it,” Councilwoman Melissa Dunn said, but expressed concerns about the program merely “deferring homelessness.”

“Maybe we need to have an incentive that increases if you leave a property in the program,” Councilman Derek Pfaff suggested.

“We’re not trying to compete in the marketplace. We’re trying to find that trip level,” Councilman Pete Furman said.

“We can never compete with the market,” Kinsella said. “We were trying to find someone’s better side.”

Council voted unanimously for the increased cap.

Council returns ADOH homelessness grant – Sedona Red Rock News

The Sedona City Council’s proposed rental assistance program is off the table after the council voted unanimously on April 8 to return the Arizona Department of Housing grant originally intended to fund the planned car camp for homeless workers at the Sedona Cultural Park to ADOH to be redistributed to organizations in the Verde Valley.

Council had previously discussed a city staff proposal for reallocation of the $875,638 grant on Feb. 11, which would have redirected the funding to a two-year program run by Catholic Charities Community Services to provide rental assistance to homeless individuals or pay to move them out of the Sedona area.

“Council, during the discussion, wanted to clarify the eligibility requirements to explore potential impacts on Sedona homeless students,” Housing Manager Jeanne Blum said. “School students fall under a different category … they are not necessarily experiencing literal homelessness, which is what this funding needs to target … some of the homeless students who are in Sedona may not qualify for this particular program.”

“Staff was directed to come back with an amended scope of services that was kind of Sedona-specific, to serve the local community, and make sure that the persons that we were served had a verifiable Sedona connection,” Blum continued. “There were some challenges with that, because it reduces the number of households that are being served and it’s pretty much unlikely the city will expend the full grant. Additionally, the Department of Housing may prefer a broader service area.”

The alternative option, Blum said, would be “to request a transfer of the grant to a qualified nonprofit,” which would “expand housing opportunities for more people, and it would also ensure data collection for future policy decisions.”

“Staff recommendation is to transfer the grant to a qualified nonprofit,” Blum concluded.

In discussion with ADOH, “we learned about this distinction between the two definitions of homelessness that would not allow us to serve the students at the school district,” City Manager Anette Spickard added. With regard to staff’s estimate that the amended scope of work would only affect about 25 families, instead of the 103 estimated in the original proposal, “ADOH was a little concerned that would be too small and not meet the legislature’s intent for this grant.”

“Our grant would actually just be transferred back to ADOH for them to administer directly,” Spickard said. She clarified that council could ask staff to set up a separate city-funded program to benefit homeless students.

Councilwoman Kathy Kinsella asked what would happen to the unexpended funds if the city was unable to spend them all due to a reduced scope of work.

Since it was a reimbursement grant, “it just stays with the state,” Blum said.

“Do we have reason to think that Catholic Charities will still be the qualified service provider when the grant is reassigned?” Kinsella asked.

“My understanding is that they would work with them,” Spickard said. “They would still have this network of referrals happening.”

Councilman Brian Fultz asked staff to assess ADOH’s response to the council’s desire for “this really strong nexus.”

“They were a little lukewarm about our original request to scale it down to just the Sedona nexus because it doesn’t meet the full intent of the legislature,” Spickard said. “I don’t think they would accept the transfer and then only spend the money on Sedona nexus people. I think they will do Verde Valley region because that’s the underserved community in the state.”

“So you’re saying a nexus still exists, just the nexus is a wider area of the region,” Kinsella said. Spickard and Blum agreed.

“These are all very soft terms,” Councilwoman Melissa Dunn said. “Is there an assurance that Sedona will be considered as part of the Verde Valley?”

“In the conversation with ADOH staff, they did state clearly to me that when we request the transfer of the grant, that we could identify some terms for that, and they threw things out like, you will get data and reporting that you request, things like that, which tells me that we have some influence on what that new contract’s going to look like with Catholic Charities,” Spickard said.

Public Comments

“I do support you all looking at a regional solution to a regional challenge,” Sedona Chamber of Commerce President David Key said. “I think that feels appropriate.”

“The rental assistance funding … would have a direct and immediate impact. It could help families in our program move more quickly into permanent housing,” said Elizabeth Slane of Hope House of Sedona. “Anything that help the homeless in Sedona I think need to be considered.”

“I support the idea of moving these funds either the original plan, which is, what, phase two, where we contracted with Catholic Charities, or we give to ADOH and have them allocate it,” Jo Martin said. “We are relying on the administration of the state to give us help … We’re trusting the state to help our community instead of us maybe having more control over those funds.”

“The grant is a solution in search of a problem,” Bill Noonan said. “It’s a bit of an affront to the democratic process that the city reconsidered applying for this grant or that the state of Arizona is still trying to foist it on us through this NGO.”

Council Comments

“Nobody denies that there are homeless people here, but there is a perspective about whether it is a big monumental problem deserving of big government resources or not, and when we’ve spent no money, essentially, on it, to go from that to $875,000 in two years is a pretty big ramp-up,” Fultz said. “I support moving that money back to ADOH. I certainly hope that we will provide direction that says that any recipient needs to have a strong nexus then to the Verde Valley so it’s not a ‘come one, come all,’ it’s not an incentive for van lifers to participate.”

“I would go with moving ADOH money further into the region,” Dunn said. “I would like for us to have some kind of assurance that people who are in Sedona have a way of getting resources, whether it’s at the library or wherever.”

“I also support moving the grant from Sedona to an NGO and serving the Verde Valley,” Vice Mayor Holli Ploog said. She added that the number of people to whom the original plan proposed to provide assistance “was more than we had in Sedona to serve.”

“I support the money going back to ADOH … the homelessness here is a regional issue,” Councilman Derek Pfaff said. “I don’t think we attach strings to it. We’re trying to have it both ways.”

“Regional solutions are the right approach,” Councilman Pete Furman said. “We need to be good partners in the Verde Valley on this issue.”

“I think it’s important to make sure the full amount of money that’s available from the state can be utilized,” Kinsella said.

“I don’t support putting restrictions on ADOH. They know what they’re doing, they do it best,” Mayor Scott Jablow said. The council then voted to send the money back.

Sedona City Council votes 6-1 to annex 3,422 acres – Sedona Red Rock News

In five minutes, Sedona got about 30% bigger — or rather, it will on Thursday, April 24, when the annexation of 3,422 acres west of town takes effect.

The Sedona City Council approved the annexation ordinance in a 6-1 vote, with Councilman Pete Furman opposed, on March 25.

City Attorney Kurt Christianson called council’s attention to “one little unique bit of information that came out during the preparation of the ordinance.”

“As required by state law, all the area annexed will be zoned to the city’s most — basically the same zoning the county has. It can’t be any less or more restrictive, we need to match it as best as we can,” Christianson said. “I thought originally that all the property was the county’s RCU-2A, so two units an acre of residential. Turns out this one little section right here by the Cultural Park is basically one unit an acre instead of the two units an acre. So this little square right here, this is the section 16, town ship 17, north range 5, shall be zoned city of Sedona RS-35, so that corresponds pretty well. The whole rest of the annexation area will automatically be zoned per the ordinance RS-70.”

“That’s kind of a lot to say about nothing because none of this can be developed, necessarily,” Christianson added.

He also noted that staff would likely ask for the city’s wastewater treatment plant to be rezoned to Community Facilities at some point in the future.

“It’s a little bit strange, but we’ll probably move the city limit signs,” Christianson said. “We’ll probably move it and-or duplicate it, and put another one on [State Route] 89A right by the wastewater treatment plant.”

There was no public or council comments and no discussion prior to the vote.

The annexation will become effective 30 days after the approval of the ordinance, which Christianson said would be April 24.