Housing commission reviews zoning change to allow single‑use residential and incentives for adaptive reuse

At a Flagstaff City Housing Commission meeting, staff presented a proposed zoning code text amendment to allow single‑use residential development in commercial zones as an affordable‑housing incentive and to add incentives for adaptive reuse of existing commercial buildings.

The proposal, presented by Tiffany Antal, zoning code manager, would allow a project that is exclusively residential in a commercial zone to avoid the current conditional use permit process if it meets affordability conditions. "Single use residential is a very simple, far complicated way of basically saying a development containing only residential uses," Antal said. The draft ties by‑right relief to affordability: rental projects would need at least 20% of units at 80% area median income (AMI) for 30 years, and ownership projects would need 15% of units at 50% AMI, to avoid the conditional‑use review.

The amendment would also create an adaptive‑reuse pathway with additional incentives, Antal said: eligible buildings generally must be at least 15 years old (staff noted jurisdictions use 10–15 years), additions may not exceed 25% of the existing building, and projects could keep existing parking counts rather than upgrading to current standards. Antal listed further waivers: site planning and architectural design standards, updated landscaping requirements, and the 15% common‑space requirement for multifamily would not apply where adaptive reuse is used to preserve the existing building form. For small commercial buildings, the draft would no longer require parking upgrades where a building is under 5,000 square feet.

Commissioners focused discussion on whether single‑use residential should be allowed by right across commercial zones or whether the city should keep it tied to affordable‑housing incentives. Commissioner Tyler Denham said he was "a bit skeptical of the approach being taken here" and preferred allowing residential by right in commercial zones while keeping the incentive option available. "My preference would be that we actually just make residential buildings an allowed use in commercial zones by right," he said, citing sustainability and mixed‑use area goals.

Several commissioners supported a by‑right approach for adaptive reuse. Commissioner Davana McLaughlin said adaptive reuse often preserves community fabric and can advance mixed‑use goals: "If you're gonna do adaptive reuse project... the benefits of getting residential and commercial, having mixed use, having people live near amenities and public transportation, and all of those things outweigh having it be 20% affordable." Commissioner Moses Milazzo and others warned that strict parking, landscaping and common‑space requirements can make adaptive‑reuse projects financially unfeasible and said waivers are important for viability.

Commissioners also discussed the potential for short‑term rental conversions in small adaptive‑reuse projects (fourplexes and below) and noted state statutory limits on short‑term rentals would affect outcomes. Staff confirmed the proposed AMI thresholds are adjustable and that the city will publish current AMI tables by link rather than embedding a static table.

No formal vote was taken. Commissioners gave staff direction to continue refining the draft, present updated affordability math using the April 1 AMI updates, and pursue public outreach. Antal said staff aims to finish a revised draft and begin outreach to community stakeholders within one to two weeks, with Planning & Zoning Commission review targeted for August and City Council consideration in September. Antal also noted the amendment would be paired with a separate text amendment on high‑occupancy housing.

The discussion occurred without public comment. Staff signaled the proposal is intended as an interim approach tied to the city’s larger "last cap" code concepts work and related bond funding for adaptive‑reuse projects; staff said a future decision point could convert elements to a broader by‑right regulatory framework depending on final direction from the consultant and council.

Ending: Staff will post an edited draft for stakeholder review, update AMI calculations, and return to the commission and consultant process ahead of Planning & Zoning in August and City Council in September.