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Prescott committee weighs down-payment assistance models, CDBG pilot and code updates
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Summary
Committee members discussed multiple funding and program models for workforce housing assistance, heard examples from Flagstaff, Cottonwood and Camp Verde, and were told state law limits use of impact fees for housing; staff flagged a possible CDBG pilot and a forthcoming consultant presentation on an implementation plan.
The Prescott Workforce Housing Committee spent the meeting exploring how the city might support workforce housing through programs such as down-payment assistance, and what funding sources and code changes would be needed to implement them.
Brandon Nunez, the city's human resources director, summarized program models used elsewhere and said Flagstaff offers up to $20,000 in down-payment assistance with a two-for-one match from other partners. "They actually match 2 for 1," he said, and described shared-equity models and layered assistance that combine private lender funds, existing assistance programs and a potential city-provided layer.
Members discussed practical barriers lenders impose. Committee member Greg Reardon explained that programs commonly use multiple layers (primary mortgage, silent forgivable second, plus an additional city layer) and that lender rules and zoning can create additional upfront down-payment requirements for some lots.
Funding options discussed included employer matches, third-party nonprofit partnerships ("Housing Solutions in Northern Arizona" was referenced as a long-standing regional program), municipal revenue and federal or state grants. Michael McGinnis said the city is "researching a down payment assistant program through the CDBG, a pilot program" that could help households up to 80% of area median income, but cautioned it is preliminary.
Legal and statutory limits surfaced: a staff member explained that impact fees are collected for infrastructure and "after talking to our city attorney... the way that the state is written right now, we cannot use those funds for, like, workforce housing projects or down payment assistance. It is strictly for infrastructure." Committee members urged exploring alternative revenue streams or state policy changes.
Planning manager Alex Bramlett reviewed recent ADU (accessory dwelling unit) legislation, telling the committee the ADU changes that reduced setbacks apply to jurisdictions with populations of 75,000 or greater and therefore do not apply to Prescott. Bramlett said the city plans a full Land Development Code update (the code has not been overhauled since 2003) but may consider targeted interim code changes to accelerate housing-friendly options.
Why it matters: members said a workable funding model is central to any workforce-housing program. They pressed staff for operational detail, lender acceptance rules, and examples of cities that administer similar programs. Committee members suggested pursuing nonprofit partnerships, employer contributions and piloting programs first.
Next steps: staff will continue consulting with other Arizona municipalities (Flagstaff, Cottonwood, Camp Verde), pursue possible CDBG pilot eligibility, and bring the consultant'prepared implementation plan to council at a work study next week. The committee will collect member suggestions on goals by the stated internal deadline and review council feedback at its next meeting.
