Nonprofit wants to make empty Route 66 motel in Flagstaff into affordable housing

A northern Arizona nonprofit is trying to buy a historic property and turn it into affordable housing.

The El Pueblo Motor Inn dates back to 1936; the Route 66 site was the main recruitment hub for Navajo Code Talkers during WWII. But it’s empty now and for sale.

So Habitat for Humanity of Northern Arizona is looking to raise the money to buy it and turn it into 19 total affordable units, including some new ones behind the original three existing buildings. The project would also include turning one of those buildings into a museum.

Eric Wolverton is the CEO of Habitat for Humanity of Northern Arizona. He joined The Show to talk more about this.

Full conversation

MARK BRODIE: And Eric, why does this particular site seem like a good spot for affordable housing?

ERIC WOLVERTON: Really, to be honest, it’s because the parcel’s quite large for Flagstaff. it’s just under 2 acres of land, and now because of the housing emergency declared, by the housing — or I’m sorry, by the city of Flagstaff mayor and council, we know that we’ll be able to utilize this land in terms of density to be able to put many units on here and that would be permanent affordable housing in perpetuity, ensuring that not only will the homes on the property be affordable forever, but also that we can secure that museum forever as well, too.

MARK BRODIE: What are some of the challenges of turning an old motel into homes?

ERIC WOLVERTON: Oh, well, there could be a lot of challenges. You know, the good thing with adaptive reuse is that there are historical codes that we can work with, so that way we don’t always have to function through current housing code and that does simplify some of the processes.

But I’m not going to lie. You know, this is an investment not only in workforce affordable housing, but again, for the history of this property and the heritage that it really serves for Flagstaff.

MARK BRODIE: Well, I wonder about some of those issues because, obviously, like until you get in there, I would imagine you have no idea, like, what the electrical looks like, or the pipes look like, or really what anything looks like.

And it seems like when you talk to developers, they say that building affordable housing as it is — like, it’s kind of hard to make that pencil out when you’re sort of starting from scratch, much less when you have some unknown number of issues from a, you know, 80-, 90-year-old building.

ERIC WOLVERTON: Yeah, and you’re absolutely correct on that. You know, what’s nice is that we just have to have an innovative mindset to , and the willingness to think outside the box to be able to upgrade these units to really bring in those basic utilities that you mentioned.

So, you know, the way that we look at it is with historic preservation, it’s really about the, keeping the outside of the building intact the way that it was, but also the street-facing part of those buildings. And so behind the existing units right now, we do have the opportunity to add small additions to those units, so that way we can put in those amenities like the kitchen and the bathroom because you’re absolutely right. The shells right now are really just that. It is just the exterior walls with the skeleton framing inside, and that’s it.

MARK BRODIE: So, how does this work? My understanding is it’s a pretty interesting program that you have for folks getting into these homes, and you’ve done this sort of thing elsewhere in and around Flagstaff, right?

ERIC WOLVERTON: Yeah, that’s correct. So our Starter Home Program, which is a very innovative housing program here — created right here in Flagstaff, where we basically took the 50 years of Habitat for Humanity’s housing program and augmented it so that way we can turn homeownership into an investment opportunity through equity savings for families to actually be able to cash out equity by selling their home back to Habitat where we will refurbish and resell that unit to another low-income family, but walk out with, quite frankly, a large sum of self-wealth.

MARK BRODIE: So people who go into these homes, they live there for however long they’re going to live there and when they are ready to move on, they sell the home back to you. You’re able to then let another family that needs that home into it, and the soon-to-be former homeowners end up with the equity from their — the house that you had gotten them into?

ERIC WOLVERTON: Yeah, that’s it exactly. And we keep the math very simple because we know that entry into homeownership is a complicated and anxiety-ridden process, especially for those families that feel that they don’t have the opportunity to ever reach homeownership.

And so the basic math that we put together for our Starter Home Program is with a $1,000 down payment, you’re a homeowner in Flagstaff, where median home values are over $700,000 currently.

The best part after that is that total mortgage payments don’t exceed $1,100 with all impounds included in that because the only gift that Habitat provides our homeowners is a 0% interest loan.

So, what’s great is, with that mortgage payment, $833 of those dollars go directly into equity savings that turns into a $10,000 savings annually for our homeowners. And they have to live there for a minimum of three years because now we’re talking about shelter, investment and workforce, but with a maximum time frame of this homeownership of 10 years.

As mentioned, it is deed-restricted. Only Habitat can buy back these homes when the homeowner wants to sell. And if they sell at three years, Habitat is going to cut them a check for $30,000, five years $50,000, 10 years $100,000, penny-for-penny of what they paid in to their principal. And for us, it’s a great mechanism so that way we can move our impoverished families from poverty and closer to the middle class with that cash-out.

MARK BRODIE: I wonder though, you know, assuming somebody stays there for a decade and gets that $100,000, you mentioned the, you know, the median home price in Flagstaff is seven times that. Will somebody who’s leaving even after a decade be able to afford something else?

ERIC WOLVERTON: So, that’s always been the common question. And the thing that I look at is, that’s not a barrier. It’s an opportunity because in all other affordable housing mechanisms, families unfortunately are saving nothing.

And so, this is a huge opportunity not only to be able to save that $100,000 over those 10 years, but also keep in mind what they would have been spending if they were paying rent. And right now, with Flagstaff, the annual — or I’m sorry, the average rental for just one bedroom is $1,800 a month.

MARK BRODIE: And I know that the — you mentioned that the property is for sale right now. How optimistic are you that you’ll be able to come up with the money to buy it? It’s what, $2.75 million?

ERIC WOLVERTON: Yeah, so, obviously, we are very optimistic. We know that not only is this land valuable not just to Flagstaff, but obviously for other historian buffs out there.

But again, the big thing for us, too, is, how can we do kind of a two-prong approach? Rescue this property and give it the value that it deserves for the general public to enjoy and then learn from? And at the same time, how can we bring in more workforce housing so that way we can ensure that we can keep Flagstaff and its community viable and thriving?

MARK BRODIE: All right. That is Eric Wolverton, CEO of Habitat for Humanity of Northern Arizona. Eric, thanks so much. I appreciate it.

ERIC WOLVERTON: Thank you.