City approves loan and documents to expand workforce housing, reaffirms Habitat Timber Sky support

The Flagstaff City Council approved financing and transactional documents on Dec. 16 to expand workforce and affordable housing in the city.

Council member House moved to approve loan documents totaling $1,160,000 for the Western Hills property by Housing Solutions of Northern Arizona, using adaptive-reuse bond program funds; the motion was seconded and approved by voice vote. Davonna (Davona/Davonna spelled in transcript as Davonna/Davona) McLaughlin, CEO of Housing Solutions of Northern Arizona, told council the organization expects to close on the property in early 2026 and lease units immediately after adaptive-reuse work is completed by the seller; the purchase will increase the organization's Flagstaff rental portfolio from 100 to 129 units.

Earlier under the consent agenda, council approved nine documents related to the Timber Sky Habitat for Humanity project, subject to a partial release of an Arizona Department of Housing lien on the land, delegation of minor document modifications to the city attorney, and authorization for the city manager to execute the documents. Vice Mayor Sweet praised the multi-year coordination among Habitat, city staff and development partners and characterized the project as an innovative approach to workforce housing.

What the approvals mean: the Western Hills loan uses adaptive-reuse bond funds targeted to households around 80% area median income (AMI) and is intended to add permanent rental units for Flagstaff workers. Housing Solutions said the starter-home model pioneered in Flagstaff continues to expand in other Habitat affiliates; the organization emphasized deed restrictions, mortgage terms, and compliance periods to ensure affordability.