More affordable units, fewer second homes?
Vail, CO Colorado
EAGLE COUNTY ” The county hopes to encourage more affordable housing and limit the number of second homes by making its housing guidelines stricter, officials said.
A new county housing proposal requires developers to build more affordable housing per project and sell more homes to local residents.
The policies will offer developers a tradeoff of affordable homes for density and hopefully encourage more projects like the West End, said County Housing Director Alex Potente.
The recently approved West End in Edwards is a mix of businesses and homes and will provide the county with 72 affordable units.
County officials and local businesses saw a draft of the guidelines over the last couple weeks and will be making changes and adopting them by early 2008.
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The proposed guidelines, which apply only in unincorporated Eagle County, require that half the total square footage of new developments be locally owned, and 30 percent of that must be affordable and deed-restricted for full-time Eagle County workers.
Previously only 20 percent to 30 percent of a development was required to be affordable, but at lower initial sales prices.
“This is to keep the ratio of second-home owners to locals where it is today, and to provide significant new workforce housing in a meaningful and achievable way,” Potente said.
Commercial developments would also have to do their share under the proposed rules.
Commercial developers would have to completely cover for their “commercial impact” ” that means a development would need to make a payment, donate land, or build enough affordable homes elsewhere to cover the number of jobs it would create.
Developers would either have to do that or meet 30 percent affordable housing requirement plus the 20 percent local ownership requirement, whichever is higher.
Under the old guidelines, developers had to meet both affordable housing requirements and cover for commercial impact, Potente said.
The “commercial impact requirement” comes out to about 46 homes built for every 100 jobs created. While the guidelines require the construction of more housing, the target prices are more attainable, he said.
“The goal of the new guidelines is that development would fully pay for itself ” the basic premise is that, at a minimum, new development shouldn’t make the affordable housing imbalance worse,” he said.
The new guidelines also target a higher income group. The old guidelines aimed to build homes for people making an average of $45,000, or 80 percent of the area’s average median income.
But studies show that Eagle County residents tend to make more than that, and it is not feasible for developers to build homes at those lower prices, Potente said.
“No developer could afford to build it without a sizable subsidy. Now we’re aiming for an average of 105 to 115 percent of the average median income,” he said.
That means a two-bedroom home would cost an average of $261,500 to $286,350.
But that does not mean all the homes built will be that expensive ” those percentages are averages and developers will also be required to build homes for people with incomes lower than that, Potente said.
Meanwhile, the guideline’s “cost recovery” component makes building affordable housing less risky for developers, Potente said.
If developers keep the prices within the required price range, they can recover their building costs, building fees and make a 5 percent profit by imposing a transfer fee on home sales.
“We’re guaranteeing them a profit. Unlike before, they don’t have to pay out-of-pocket to build it. We see it as a win-win situation,” Potente said.
Under old guidelines, developers had to build affordable homes at over a $100,000 loss per unit.
The draft guidelines will go before the county commissioners in a public hearing in the next few weeks.
Another cross-community effort to get more affordable homes built is the county’s so-called “housing action team.”
The group includes representatives of all the valley towns, several businesses and development companies. They have been meeting over the last few months to consolidate housing guidelines and procedures, said Don Cohen, executive director of the Eagle County Economic Council.
“Right now every town has its own department figuring out housing. It’s very inefficient. No one quite knows what the other is doing,” he said.
The group is also working on a database of affordable homes and guidelines so buyers and developers can come to one place for information, Cohen said.
The housing action team is the first step to getting lower prices and more housing built, Potente said.
“We want to remove incentive from developers to play the towns against the county, and see where they can get the best deal. By approaching it as a united front, they’ll know you’re going to get the same deal everywhere,” he said.
Staff Writer Melanie Wong can be reached at 748-2928 or email@example.com.