Housing reg decision due today
Today’s county commissioners’ decision on proposed housing regulations is a classic collision between philosophy and funding.
Brett Ranch developer Gerry Flynn said incentives, not requirements, would better enable builders to work affordable housing into their projects, and help county officials get the affordable housing units they want.
For county Commissioner Arn Menconi, who supports the proposed housing regulations, it’s simple.
“You take care of the people who take care of you, and this is one way to do that,” he said. “Haven’t we learned anything from Los Angeles? The percentage of people driving in from Garfield County and Leadville is staggering and growing. Places that have used this have placed a very high priority on people being able to live close to where they work.”
Those housing regulations would require commercial and residential developers to create low-income housing. If builders don’t construct 10 percent of their projects as affordable housing, they’d be required to pay into a county housing fund.
The stated goal is to require developers to offset the strains on the local housing market that their projects create. But Flynn said those strains are mostly imagined.
Flynn said that while the goal is noble, the proposed regulations are misguided. He said the market has responded to affordable housing needs, and that incentives work better than requirements. Flynn also said rental projects in Eagle County are currently depressed, and that 15-20 percent vacancy rates are not uncommon.
“Projects will not survive sustained vacancies,” he said.
Flynn, working with the Corum and Wintergreen companies, in Eagle County has built more than 1,300 affordable, home to 4,000 Eagle County residents. The companies also manages 1,100 rental units.
“Use the carrot versus the stick to achieve the desired results,” Flynn said.
Flynn and several others said the requirements would kill moderate to mid-priced developments.
Menconi was not unsympathetic, but he was also unconvinced.
“Not having a work force is a problem that’s greater than the small percentage developers will have to pay under this program,” he said. “The most important point about this regulation is asking people what they place their value on. People do not want employees moving farther and farther away from their jobs. There’s a trade-off between being more concerned about workers than a developer being able to make his profit margin.”
The program’s requirements have been called a tax by several people speaking against it.
Menconi did not disagree with that, but said the label is irrelevant. The point, he said, is that it would help create housing locals could afford.
Among the requirements is that the units created under the program would be deed restricted.
Flynn suggested replacing requirements with incentives.
“The reality versus the perception is that buyers avoid deed restrictions,” he said. “Deed restrictions are extremely cumbersome and unnecessary. Market appreciation has been moderate for affordable units.”
Ken Kris, developer of Two Rivers Village in Dotsero, said the proposed housing regulations would add between $18,000 and $20,000 to the cost of each Two Rivers house.
Tim Cochrane, executive director of the Eagle Valley Chamber of Commerce, said that under the proposed regulations as written, people could work themselves right out of the affordable homes they purchased under the program. He said those taking advantage of the program could move into one of the low-income units, but if their incomes increased significantly, they would no longer be eligible to live in their homes.
The county’s planning commission built income restrictions into the regulations, saying they felt that when people’s incomes increase, they should move out of these low income homes and up in the real estate market. The planning commission said that would help ensure a steady supply of low-income housing in Eagle County.
The policies would force commercial developers to pay their housing fees up front, then pass that cost along to tenants. But those who spoke against the regulations said it could take up to 10 years to make that money back.
“We need sales tax revenue,” said Cochrane. “On the commercial side of these regulations, we need to find ways to create incentives, not penalties. We need to rethink the commercial side of this.”
Regulations by the numbers
– Inclusionary housing: Build a residential housing project of four or more units, and you must create some low and moderate income housing with it – up to 10 percent of the project.
– Employee housing: Residential developments are subject to employee housing requirements, based on the size of the house. The bigger the house, the more employees it creates.
– Commercial development is subject to employee ratios. A new business must create enough housing to house less than 10 percent of its work force.
– Based on a two-bedroom unit with a three-person household, with a household income of $50,850, these units would be available for workers to purchase at $187,103. The market price for that unit is $223,125.
– Part of the regulations make these houses available only to people whose incomes are below 100 percent of Eagle County’s median income. In 2003, Eagle County’s median income is $67,400 for a three-person household.
– Developers have three options: They can build the low income units, provide the county with a cash payment instead of building the units, or they can give land that meets the county’s developable standards. They can contract with a third party to build their housing for them, such as Habitat for Humanity. They can also bank housing credits for anticipated future requirements. All these units would be subject to deed restrictions.