City’s report highlights aging population, workforce shortages

Nails will meet wood as 221 housing units are slated to go up in the coming years, however, it may not be enough to house Sedona’s workforce.

Sedona may need as many as 775 new housing units over the next decade to meet the city’s needs, according to early findings from the Community Development Department’s Balanced Housing Strategy, presented to City Council on March 25 in joint session with the Second-Oak Creek School District Governing Board.

“If we are not careful, we are going to lose people to the point that we start to lose the important facilities and amenities that we enjoy [such as] our schools, our health care,” Community Development Director Tony Allender said. “As we age out, health care matters. … Some individuals in our hospitality and services categories are moving farther and farther out to find affordability. At what point do they decide the Verde Valley just isn’t for them anymore?”

Among the units already in the works are: Alkemista at 2144 W. SR 89A with 15 units under construction; Navajo Lofts at 10 Navajo Drive with 60 units under construction; and Village at Saddlerock Crossing at 82 Saddlerock Circle with 46 units in design. Also included are Villas on Shelby at 2250 Shelby Drive with 30 units under construction, Goodrow Housing, that the council approved in February, at 60 Goodrow Lane with 51 units in design; and Jordan Townhomes on Jordan Road with 19 units under construction.

“You’re 10,048 people. Your daytime population is 15,571 … the piece that is a little bit surprising is that the number of workers is actually larger than your normal population,” Allender said, and noted that Sedona is the only community in or near the Verde Valley where the number of workers exceeds a city’s total regular population, with 40% of workers in the city commuting from up to 25 miles away.

Aging Population

The age gap between residents who are working and retired is anticipated to widen, Allender said. In 2000 the city’s median age was 50.5 years and those over 65 were 25% of the population, and “48% of our population is age 65 or older.” The report also states that, “With the exception of Camp Verde, all communities in the Verde Valley are aging at a rate that outpaces the state.”

The working-age population once made up 60% of the city’s residents in 2000, but has since declined to 44%, while the share of children under 18 has fallen from 13.7% to 7.7%; this trend mirrors a nearly 50% drop in enrollment in the Sedona-Oak Creek School District, from 1,365 students in 2001 to 695 in 2025.

Council decided later in the meeting it will form a joint committee of school board and council members and directed staff to explore ways to provide financial support to the district, with the goal of increasing enrollment by 50%.

Affordability

The four major gaps identified are: working-age families with children, working class households making $50,000 to $200,000 annually, hospitality and service workers and cost-burdened seniors.

Allender suggested the city consider a program to encourage seniors currently occupying single-family homes to relocate to age-specialized facilities, which he said could free up to 88 local housing units.

“If we are looking simply at affordability, then the natural instinct of the development community and the community at large is to focus on studio … units,” Allender later said. “If we’re talking about families now, we’re looking at two to four bedroom units. So it changes the dynamic. And obviously the scale of the buildings means that in some places you can’t put as many buildings, particularly if we want to stay within two stories. … That’s why we broke those down into three specific categories.”

The upper limit of $200,000 annual income was selected Allender said because of Sedona’s high median sales price of homes.

STRs

“In 2020, roughly 10% of our housing stock was in short-term rentals,” Allender said. “[Now] there are more short term rentals in our community than there are long-term rentals. 17.6% of our housing stock is in long-term rentals, and 18.1% is in short-term rentals.”

Smaller units are less useful as an STR, Allender said, adding that, in 2020, 454 single family units were STRs and that number has grown to 1,041 today.

“We’re starting to see … more of a drive for experience, and so the smaller units are becoming less useful for short-term rental,” Allender said. “You’re starting to see people come in and ask for permits to expand homes or to convert homes that were three bedrooms to seven bedrooms, so that you can now start to have more of an ‘experience.'”

Future

Allender’s presentation kicked off the Balanced Housing Strategy’s first phase, preceding a public outreach session Monday. A solutions phase, led by consulting firm Logan Simpson with city staff support, is targeted for completion by September.

Upcoming dates on the strategy include: A City Council work session on Wednesday, May 13. A Housing think tank Monday, May 18, and Tuesday, May 19. A second open house on Monday, June 29, at 5:30 p.m. at the Posse Grounds Hub. A Planning & Zoning Commission meeting on Tuesday, July 7. A Sedona City Council meeting on either Tuesday, Aug. 11, or Tuesday, Aug. 25.

The Balanced Housing Strategy is available online at sedonaaz.gov.