Developers: Worker housing rules unrealistic
EAGLE COUNTY ” Vail Resorts developer Keith Fernandez just could not make the numbers work.
He tried to “run the numbers every which way” for hypothetical projects under Eagle County’s proposed affordable housing guidelines, but he could not cover the costs, he said.
The guidelines, which require developers to build part of their projects as affordable housing, are too burdensome for developers to make a profit, he said.
“I’m worried that projects won’t be able to provide housing because it doesn’t make economic sense. This will deter development more than encourage affordable housing,” he said.
The guidelines, which the commissioners will vote on in a few weeks, require developers of residential projects to make 35 percent of the total square footage of the project affordable housing ” price-capped homes sold to local residents.
They could also build 30 percent as affordable housing and 10 percent as free-market homes that could only be sold to local residents.
Developers of commercial projects would have to build affordable housing for all the jobs earning under 140 percent of the area median income. That comes out to about 715 square feet of affordable housing for every 1,000 square feet of commercial space.
The guidelines are designed to keep the balance of local residents and second homeowners the same, said County Housing Director Alex Potente.
But like Fernandez, some area developers, Realtors and landowners worry the requirements will put them out of business.
Greg Jouflas, whose family owns land in Wolcott that they intend to sell to the county for future development, said the affordable housing requirements will make it difficult to attract developers.
“I want top-rate, best-quality developers to come in (to the Wolcott area). I’m afraid this will make that hard,” he said.
Bethany Johnson, of the Vail Board of Realtors, said that Realtors do not think the plan will work.
Affordable housing has high costs and risks, and forcing developers to build it will deter them from investing in the valley, she said. Or, free market home prices will be inflated to make up for the cost of building affordable homes, she said.
“One of the unintended consequences is that real estate and building, two industries that drive the valley, will suffer,” Johnson said.
Better alternatives would be more Miller Ranch-like developments, Johnson said.
The county is doing that, with Gypsum’s Stratton Flats project, an affordable housing neighborhood that will have 226 homes.
However, Commissioner Arn Menconi pointed out, Miller Ranch took 10 years and $10 million of taxpayers’ money to build. It can only be a part of the solution, he said.
The reality is that if something is not done, the valley’s economy will suffer when workers who cannot afford to live here leave the area, said Don Cohen, president of the Eagle County Economic Council.
“It will be harder and profits skimpier, but smart developers will find a way to work within the guidelines,” he said. “While developers have exit options, communities don’t.”
County Commissioner Sara Fisher said she thinks despite what developers say, building second homes will still draw business to the valley.
“Though (the guidelines) are stringent, I’d be hard pressed to believe we’ll have developers leave the valley in throngs,” she said.
The developers and landowners are just going to have to adjust their expectations, Potente said.
He defended the guidelines, saying they are based on research from affordable housing specialists and have been tested in other resort communities.
“I don’t think there’s any case in the country, even (guidelines) far more dramatic than ours, that have shut down development,” he said.
Staff Writer Melanie Wong can be reached at 748-2928 or firstname.lastname@example.org.
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