The Coconino County Board of Supervisors voted unanimously Tuesday to approve a $15 million affordable housing initiative specifically designed to address the critical shortage of workforce housing in tourism-dependent communities near the Grand Canyon. The Coconino Workforce Housing Program, as the initiative has been named, will fund the construction and rehabilitation of rental housing units in Flagstaff, Williams, Tusayan, and Page, targeting workers in the hospitality, service, and public safety sectors who have been increasingly priced out of the communities where they work.
The vote followed months of public hearings, community input sessions, and economic analysis that documented the scope of the housing crisis across the county. A study commissioned by the Board of Supervisors found that Coconino County has a deficit of approximately 4,200 affordable rental units for households earning less than 80 percent of the area median income, a gap that has widened dramatically over the past five years as housing costs have outpaced wage growth in the service and tourism sectors.
Board Chair Patrice Horstman said the vote represented a recognition that the housing crisis has become an existential threat to the communities and industries that drive the county’s economy. “We heard the same message at every public hearing, from hotel operators who can’t staff their properties, from restaurant owners who are losing employees to communities with lower housing costs, from fire departments that can’t recruit because their firefighters can’t afford to live where they serve,” Horstman said. “This program is our answer to that crisis.”
The $15 million initiative is funded through a combination of sources including county general fund reserves, a newly authorized housing trust fund supported by a modest increase in the county’s transient lodging tax, and anticipated matching funds from the Arizona Department of Housing. The county estimates that the full program will leverage an additional $25 million to $30 million in private investment and federal tax credit financing, potentially producing 350 to 400 new and rehabilitated affordable housing units over five years.
In Tusayan, where the median rent for a one-bedroom apartment has risen above $1,500 per month despite the town’s remote location and small size, the housing shortage has reached crisis proportions. Many workers employed at Grand Canyon South Rim hotels and restaurants commute from Flagstaff or Williams, driving 160 or more miles round trip daily because they cannot find affordable housing closer to their workplaces. Tusayan hotel operator Patricia Nakamura told the Board that her property maintains a waiting list for employee housing and regularly loses qualified candidates who cannot find a place to live.
The program establishes several mechanisms for creating affordable units. A competitive grant program will provide gap financing to developers willing to build workforce housing at below-market rents. A second track offers low-interest loans to property owners for the rehabilitation of existing residential properties that can be rented at affordable rates. A third component provides direct rental assistance vouchers to qualifying workers in designated shortage communities. All units created or subsidized through the program must maintain affordability restrictions for a minimum of 20 years.
Not everyone views the initiative without reservations. Several public commenters at Tuesday’s meeting expressed concern about the transient lodging tax increase, arguing that it could make the region less competitive for tourism. Hotel industry representatives, however, largely supported the measure, noting that the modest tax adjustment is far less costly than the ongoing workforce challenges caused by the housing shortage. “We would rather pay a slightly higher lodging tax and actually have employees to operate our businesses than save a few cents on the tax and remain perpetually understaffed,” said Williams hospitality operator Glen Sandoval.
Implementation of the program will be overseen by the county’s newly established Housing Division, which is in the process of hiring a program director and support staff. The first request for proposals for development projects is expected to be released by April, with initial project approvals anticipated by summer. Supervisor Horstman acknowledged that the program alone will not solve the county’s housing crisis but said it represents an essential first step. “Housing affordability is a challenge that didn’t develop overnight and won’t be solved overnight,” Horstman said. “But today’s vote tells our workers and our communities that we hear them, we understand the urgency, and we are taking action.”
