A house being renovated in Bisbee, AZ, through the workforce housing program with the City of Bisbee, Step Up Bisbee Naco nonprofit and Southeast Arizona Renovations, LLC. November 30, 2023.
A housing program in Bisbee is renovating homes and selling them at 20% below market value to address the city’s shortage of affordable housing.
Bisbee City Planner Melissa Hartman said the city does not have enough affordable housing to meet demand.
“One of the things that Bisbee has as a rural — smaller rural tourist town — is we have many vacant and abandoned buildings,” said Hartman.
And it’s this lack of housing that impacts the recruitment and retention of staff for local employers.
To address this, a partnership was formed between Southeast Arizona Renovations, LLC, the nonprofit Step Up Bisbee Naco, and the City of Bisbee. They collaborated on a workforce housing program that aims to provide more affordable housing.
For Bisbee resident Candace DeWitt, who works at the Copper Queen Community Hospital, before she bought her home through the program last year, she commuted over an hour to work while caregiving for her mom and best friend’s father.
DeWitt said when Danielle Boucher, who owns the LLC and is a board member with the Step Up Bisbee Naco, showed her a house that was renovated and for sale through the program, “And it was just like ‘this is my home.’ Like, I felt at home ... And I surprised my mom. She came out of surgery, she had been diagnosed with colon cancer after Thanksgiving … I was able to move her from a hospital room into a room that the roof wasn’t falling in and four minutes from work.”
According to the city, DeWitt’s home was appraised at $139,000 and purchased at around $120,000.
The LLC purchases dilapidated homes in the Bisbee area and then donates them to the City of Bisbee. The nonprofit then completes the renovations. One of the most recent homes to go through the program is off Nighthawk Ave.
"This house was in foreclosure," said Bouchever. "The state was selling it — they had actually gotten control of it. And I was able to contact the state actually and negotiate with them directly. So, they actually gave us quite a discount. They wanted $75,000. We were able to work it out to $38,000 … They didn’t have any other people interested in this property. And so, It was rough."
Bouchever says the prior owner was a hoarder, and neither the home or utilities were maintained. After acquiring the property from the state, Bouchever said they began the renovation process.
"And because we’re working a couple of different houses, it’s taken several months, said Bouchever. "So the house now is valued at …$178,000 dollars. So then, the LLC donates it to the city for that value, and the LLC gets a tax benefit. So that is a wash, that $38,000 dollars never enters the remaining equation…The city accepts the donation … So we try to sell these houses at 20% discount. So from $178 (thousand dollars) that works out to $143,000 and that’s what we will sell the house for.”
Bouchever said in the beginning, they were aiming to list the finished homes between $80,000-110,000. But with the increased cost of supplies, she says the range is now $110,000-143,000.
It’s not where we think it should be, but it’s dictated by the market and the cost of materials, the cost of labor, the insurance,” Bouchever said.
Danielle Bouchever, who owns Southeast Arizona Renovations, LLC and is a board member with Step Up Bisbee Naco, tours a home being renovated through the nonprofit and LLC's workforce housing program with the City of Bisbee. November 30, 2023.
Hartman said from there, the city takes and advertises the property.
"We go to mayor and council and everything and have it approved," said Hartman. "The city also makes sure that utilities and other items needed for the construction stay on at their cost."
She added to buy a house through the program, applicants must prequalify for a home loan, they cannot have owned a home within the past year and they must sign a five-year deed of trust with the city.
"We show them the house. If we have too many qualified buyers, the buyer must get him or herself pre-qualified, then we do what we call a lottery," said Hartman. "Then we sell the property … (The) city also absorbs about $5,000 worth of closing costs because our goal for these buyers is as little down as possible and as little at the end of the contract as possible.”
This five-year contract means the new owners must agree to reside in the new home for at least five years before selling it. Bouchever said this to prevent buyers from flipping the homes.
"Basically, there’s equity in the home immediately — that 20% is equity," said Bouchever. "And so if they hold that home for five years, that equity just becomes a gift to them. Then, they’re able to do whatever they want. If for some reason they have to sell or they want to sell within that five years, they’re obligated to repay that 20% equity back to the program, and then, it just gets folded right back into the program — which we've never had anybody do yet.”
City Manager Steve Pauken said the program is offered at no additional cost to taxpayers.
"We’ve managed to be able to keep it revolving, okay, as we go along to the extent, and then, with Southeast Arizona Renovations LLC stepping in to do their part, it’s allowed us to keep the taxpayers completely out of the mix," Pauken said.
Since the program began in 2020, Bouchever said they’ve renovated and sold seven homes, and are working on two more currently.
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