Housing Solutions’ Rental Attainability Report Shows Cost of Flagstaff Rental Housing Increasing and Prohibitive for Moderate-Income Households

FLAGSTAFF — Housing costs in Flagstaff continue to increase, making housing affordability a greater challenge for households in our community. According to Housing Solutions of Northern Arizona’s annual Rental Attainability Report, the average cost of a 2-bedroom apartment in our community is now $1,758/mo. In order to afford the average 2-bedroom apartment without paying more than 30% of gross income on housing, a household must earn approximately $5,837 a month or $70,040 annually. That is a 13.7% increase from the average cost of a 2-bedroom apartment when HSNA did its survey in 2020-2021. 

For low-income households, the challenge of affordable housing is more severe. A full-time, minimum-wage earner, making $15.50/hr. would need to work more than two full-time jobs (86.9 hours per week), to afford a two-bedroom apartment at the average rental rate. 

Costs for all unit sizes have increased since the survey was completed the previous year. Average rental cost for a 1-bedroom unit is $1,497/mo. and the average rental cost for a 3-bedroom unit is $2,188/mo. As a reflection of increasing home prices, HUD increased its Fair Market Rent numbers in Fiscal Year 2022 for the Flagstaff Metropolitan Statistical Area (MSA) for the fifth consecutive year; however, Flagstaff’s Fair Market Rent costs are well below the average rental costs calculated through the HSNA Rental Attainability survey. 

HUD’s Fair Market Rent numbers include the cost of utilities, which are often not included in rental costs charged by landlords. 88% of market-rate rental complexes do not include electric costs in their rental rates. 69% of market-rate rental complexes do not include gas charges in monthly rental rates and 54% of complexes do not include water/sewer costs in their monthly rental rates. 

The Rental Attainability Report shows other barriers to affordable/attainable housing. 78% of market-rate rental complexes charge an application fee per adult applicant. The average per-person application fee is $50. 62% of apartment complexes charge an administration or processing fee, in addition to the application fee and security deposit. The average administration fee per household is $285. 

Finally, Arizona does not have a law that prohibits discrimination on the basis of income source. Landlords can discriminate against a possible tenant if they have a housing voucher. The City of Flagstaff Housing Authority manages the administration of various housing vouchers. Due to high local rental costs, Flagstaff has an exception payment standard 20% above HUD Fair Market Rents. Even with the payment exception, many rental properties are not affordable. 68.2% of 1-bedroom rental units had rents higher than the Housing Voucher Payment Standard. 45.9% of 2-bedroom rental units had rents higher than the Housing Voucher Payment Standard. 33.2% of 3-bedroom rental units had rents higher than the Housing Voucher Payment Standard. 

Affordable housing challenges are not new for residents in the City of Flagstaff. The cost of housing has impacted the community, as documented in news articles and council meeting minutes, for decades. 

“The lack of decent affordable housing impacts families each and every day. The vast majority of households are one life-event away from housing insecurity; the majority of our residents are housing cost burdened, paying more than 30% of their gross monthly income on housing. Without a significant, sustained and intentional investment in housing affordability, the housing crisis will continue to worsen, impacting more and more of our Flagstaff families,” said Devonna McLaughlin, CEO of Housing Solutions of Northern Arizona. “HSNA is committed to increasing housing options and opportunities for northern Arizona households. We are working to increase affordable rental units and expand resources for first-time homebuyers.” 

Housing Solutions of Northern Arizona is a 501(c)3 nonprofit housing organization serving Flagstaff and northern Arizona for the past 30 years. HSNA owns and operates Sharon Manor Transitional Housing facility, which combines safe, decent and affordable housing with comprehensive support services, helping survivors of domestic violence to heal from abuse and build resources for a stable and bright future. HSNA is a HUD-Approved Housing Counseling Agency, which provides pre-purchase, foreclosure prevention and financial literacy counseling to help Northern Arizona households identify and maintain decent and affordable housing. HSNA administers down payment/closing cost assistance programs, targeted to help first-time homebuyers open the door to homeownership. More than 430 households have received financial assistance through HSNA to purchase a first home. HSNA also owns 25 permanent affordable rental units, which are rented to low-income households. 

Housing Solutions is a Qualified Charitable Organization, certified by the Arizona Department of Revenue. Donations to Housing Solutions from Arizona taxpayers can qualify for a dollar-for-dollar state tax credit. Individuals can donate up to $400 and couples filing jointly can donate up to $800. To make a secure online donation to support Housing Solutions’ comprehensive housing programs, visit www.housingnaz.org.