Approval of Rental Incentive Bond Program Award for Lone Tree Ranch a 100% affordable rental development
 

The Rental Incentive Bond Program (RIBP) was approved by Council in November 2023. Three Notices of Funding Availability (NOFAs) have been conducted – the first in February 2024, the second in February 2025 and the third in February 2026. As a result of the latest NOFA for $1,650,000, one application was determined eligible for funding and was scored by a Ranking Committee. Staff is requesting Council’s approval of a funding award.  

Lone Tree Ranch Low-Income Housing Tax Credit (LIHTC) Project: 

• Developer: Lincoln Avenue 

• 168 affordable rental units, serving up to 60% of the Area Median Income 

• Award Amount: $1,650,000 

If approved, $1.65 million will be provided as a 50-year forgivable loan. No payments will be due so long as affordable rental units are provided for the entire 50 years. Loan documents will be drafted and brought forward as a consent item at a future City Council meeting. 

Per the Development Agreement approved on March 17, 2026 with the Developer, the Developer is already required to provide 168 affordable rental units for 30 years in exchange for development incentives. 

Project Name: Lone Tree Ranch (LIHTC) 

Loan Amount: $1,650,000  

Account Number Budgeted: - 411-13-105-0354-4-4290

FY2025-26 Budgeted Amount: - $5,000,000

Grant Funded: N/A 

Funding Source: Prop 442 - "Housing Bond"  Fund

None

• Proposition 442, approved by voters in the November 2022 election, approved a $20 million Housing Bond, with approximately $5 million allocated to incentivize the private sector to incorporate affordable rental housing into new developments. Resolution 2023-51 adopting the Rental Incentive Bond Program (RIBP) was approved on November 7, 2023 

• City Council approved the first round of RIBP awards (totaling $3.3M) March 19, 2024, and the second round of awards (totaling $1.67M) on March 18, 2025.  

1. Approve the award as recommended.

2. Amend the award per Council direction.

3. Reject staff recommendation.

Housing Bond Background  
Proposition 442 – authorizing the use of $20 million dollars of general obligation bonds for “Creating Rental and Ownership Opportunities for Residents of Flagstaff” was approved by the voters in the November 2022 General Election. Proposition 442 identified four affordable housing spending categories, including “incentivizing the private sector to incorporate affordable rental housing into new developments.”  
 
Rental Incentive Bond Program Overview 
Approved by City Council in November 2023, the RIBP is intended to provide loans to eligible developers of rental housing choosing to include a minimum of 10% affordable units in new rental projects serving households at or below 80% area median income ($78,560 for a household of 3 in 2025 figures) in Flagstaff. 
 
NOFA and Evaluation Process  
On November 25, 2025, Housing staff sent notice to deobligate $1.65 million from a previous award due to the awardee's inability to obtain the tax credits that were conditioned to their approved award. The lack of tax credits led to the reservation of funds expiring and the funds becoming available again.  
 
On January 9, 2026 the City of Flagstaff procurement and housing teams published a NOFA (#2026-132) for $1,650,000 in Rental Incentive Bond Program funds from the aforementioned deobligation. Staff prioritized a simple application with fact-based evaluation criteria in an effort to streamline the application and evaluation process. One application was received by the closing date of February 9, 2026. The application was provided to members of the Ranking Committee and scored individually in accordance with the evaluation criteria. The Committee was comprised of internal City staff involved in the review of affordable development projects.  
 
The NOFA identifies that the highest scoring application would receive a recommendation for full funding, with any remaining funding to be awarded to the next highest scoring application until all funding is allocated. With $1,650,000 in remaining bond funding available, and a total of $1,650,000 requested, staff recommends fully funding the Lone Tree Ranch project, which scored 360 out of 450 points. 
 
Lincoln Avenue submitted an application for Lone Tree Ranch, a multifamily project located at the northeast corner of South Lone Tree Road and East Pine Knoll Drive. The project has just undergone its zoning map amendment process, with final Council approval on March 17, 2026. The development will have 168 (100%) affordable units designated for 60% AMI for a period of 30 years. With this funding, Lincoln Avenue has proposed extending the affordability period from 30 to 50 years, which would result in their loan being forgiven, per the adopted RIBP.  
A table summarizing the application is below. 

Project Name	Lone Tree Ranch
Applicant Name	Lincoln Avenue
Requested Award Amount	$1,650,000
Total Project Cost	$82,090,000
Number of Affordable Units	168
Subsidy Per Unit Requested	$9,821.43
Percent Affordable	100%
Max AMI Served	60%
Affordability Period	50 years
Cumulative Score (out of 450)	360
Recommended Funding Amount	$1,650,000

 
If Council approves the award amount, staff will issue a notice of award to the developer. Funding will be provided as a $1,650,000 loan to Lincoln Avenue, which would be forgiven at the end of the 50-year term. The final loan contract will be drafted and brought forward as consent items at a future Council meeting.  

Community Benefit  
This funding will assist in the creation of a total of 168 new affordable rental units available to low-income residents, providing long term affordability.  

Livable Community: Actively support attainable & affordable housing through City projects & opportunities with developers.
 

Goal LU.9. Focus reinvestment, partnerships, regulations, and incentives on developing or redeveloping urban areas. 
Goal NH.3. Make available a variety of housing types at different price points, to provide housing opportunity for all economic sectors. 
Policy NH.3.1. Provide a variety of housing types throughout the City and region, including purchase and rental options, to expand the choices available to meet the financial and lifestyle needs of our diverse population. 
Policy NH.3.3. Increase the availability of affordable housing for very low-income persons, through innovative and effective funding mechanisms. 
Policy NH.3.5. Encourage and incentivize affordable housing. 
 

HA-1: Create housing options for households at all income levels and family sizes occupied by local residents. 
HA-2: Connect people to equitable housing solutions. 
HA-4: Protect people from housing discrimination and remove housing barriers. 

Create housing options for households at all income levels and family sizes occupied by local residents.  
Create 1: Incentivize the creation of affordable units through various programs and mechanisms. 
Protect people from housing discrimination and remove housing barriers. 
Protect 2: Ensure affordable housing is a part of every Flagstaff neighborhood and work to address disparate impact as part of any development or redevelopment.