Bigger buildings = cheaper Eagle Co. homes | VailDaily.com
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Bigger buildings = cheaper Eagle Co. homes

Melanie Wong
Vail, CO Colorado

EAGLE COUNTY ” The county wants to see more affordable housing built, said County Commissioner Arn Menconi. But the first step in that process ” creating housing guidelines for future development ” has been criticized by some developers.

The proposed guidelines, which will be voted on by the commissioners on Feb. 5, would allow developers to build more homes or space for businesses if they also build affordable housing, said County Housing Director Alex Potente.

The county wants to encourage more projects like the recently approved West End in Edwards, a mix of businesses and homes that has 72 affordable homes.

However, some developers say the guidelines are too aggressive and will stifle development in the valley.

“The proposed regulations place a huge burden on landowners and developers to provide housing for impacts they are not creating,” said Dominic Mauriello of the Mauriello Planning Group in Avon.

Despite all the talk about affordable housing, there are currently no projects under construction. That is something Menconi said he wants to see change.

“In my seven years here I have seen one file for entry-level housing,” he said. “I think there’s a consensus with the board (of commissioners) that this is government stepping into a more aggressive role.”

Right now there is about a $90,000 gap between how much the average family makes and how much the average family home costs, Potente said, and only about 2 percent of the current market targets people in that income range.

Based on the proposed guidelines, affordable homes would target families making between roughly 70 percent and 140 percent of the average median income.

That means the average price of an affordable, two-bedroom home would be $260,000.

The guidelines address affordable rentals, too, which target people making 80 percent or less of the average median income. Rent prices have stayed more affordable than purchase prices, but Potente said he expects to see rent prices increase.

“There’s a very low vacancy rate for rents, and no one is building more,” he said. “We anticipate a rent increase simply because of low supply.”

The guidelines aim to provide both rentals and for-sale homes for local workers and help keep the ratio of second-homeowners to full-time workers from getting more skewed.

“There are only a few places in the country where development isn’t dead,” Potente said. “Basically, if you want to play here, the party is over. (Developers) can’t do what they’ve been doing here the past 20 years.”

For residential projects, the proposed guidelines require that 50 percent of the total square footage of the project must be sold or rented to people who live and work in Eagle County.

“For two-and-a-half years we’ve said that second-home development isn’t what we want to see. And if there is second-home development, we want to mitigate for affordable housing, like in the West End,” Menconi said.

This “inclusionary housing requirement” says that 20 percent of the square footage can be sold or rented at market rates to people already living and working in Eagle County, and the other 30 percent must be price-capped, affordable housing or rentals.

The rest of the homes can be sold at market rate to anybody.

For commercial developments, the guidelines require that the developer provide affordable housing for all the jobs the development will create that pay under a certain amount.

This “commercial linkage” requirement comes out to about 900 square feet of affordable housing for every 1,000 square feet of commercial space.

Commercial developers must fulfill either the residential “inclusionary requirement,” or the “commercial linkage requirement,” whichever produces more affordable housing.

Other options are donating land for affordable housing or paying $60 per square foot of the proposed development.

But Potente said the county also wants to provide incentives for developers to build in Eagle County.

If developers meet the affordable housing requirements, they can recover their building costs fees by imposing a transfer fee on home sales.

The 1.5-percent fee goes to developers every time the home is sold until they make up the money they lost building the affordable home.

Potente estimates that homes are sold every four to five years. The West End project in Edwards, for example, should make back the cost of its affordable homes in about five years, he said.

Once the developer “breaks even,” the money made from the voluntary fee would go toward a fund for more affordable housing.

“No other community has this cost recovery method,” Potente said. “This is not a plan to stick the developer with the cost. If they go through with the process, they can recover their cost, and we’ll get affordable housing.”

Keith Fernandez, president of Vail Resorts Development Company, said he fears the stricter guidelines will hurt development in the valley.

“Developers will only build if there’s a return on their investment. It just doesn’t work out financially,” Fernandez said.

Developer Rick Mueller, whose company Remonov and Co. is trying to build the stalled Edwards Condominiums project, said that developers actually lose more per affordable home than the county estimates.

The guidelines put all the burden on developers, he said.

“I think (these guidelines) will run people out of here. You’re looking at 10 to 15 people to take care of this. You have to get all the communities involved,” Mueller said.

Other businesses and the towns have to do their share, too, he said.

But the board of county commissioners is working on several other affordable housing ideas, said County Commissioner Peter Runyon

“This board is not looking solely at developers to solve this problem,” he said.

Staff Writer Melanie Wong can be reached at 748-2928 or mwong@vaildaily.com.


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