Proposed tax aims to ease housing woes
By the numbers
$79,600: Area median income in 2016 for a three-person household.
$73,000: Area median income in 2007 for a three-person household.
$306,621: Maximum mortgage amount in 2016 that a three-person household can afford while spending 30 percent of income on housing.
$575,000: Median priced Eagle County home in 2015.
Source: 2016 Eagle County Housing Needs Assessment.
EAGLE COUNTY — Housing in resort areas is usually expensive and scarce. County officials and supporters believe that $5 million or more per year in tax money can help ease those problems.
Responding to a county-commissioned study showing a right-now need for 4,500 units of for-sale and rental housing, the Eagle County Commissioners earlier this year put Ballot Issue 1A on the fall ballot. If voters approve, the measure will raise the local sales tax by .3 percent — 3 cents on a $10 sale. Grocery sales would be exempted. If the measure passes, county officials estimate the tax will raise between $4.5 million and $5.4 million per year. Assuming that 50 percent of the tax is paid by local residents — with the rest paid by visitors — that puts the measure’s annual cost at between $41.97 and $50.37 per year per resident.
The money would be used for a variety of projects and programs, including a down-payment assistance program that provides low-cost loans to home buyers who can afford a mortgage payment, but not the down payment a purchase requires.
Money would also be used for land purchases and partnerships with private developers, and, possibly, “buying down” units to make them more affordable to buy.
The money would be managed by the Eagle County commissioners, with the advice of a citizen advisory board similar to those that advise the commissioners about transit, trails and open space.
If voters agree, Eagle County would join Summit County and cities of Aspen, Boulder, Telluride and Mountain Village with housing-dedicated sales taxes.
Public funds needed?
Longtime valley resident and developer Jen Wright led a public-private housing partnership in Vail. That partnership led to the construction of the Lions Ridge Apartments, on the east half of the Timber Ridge Apartments property, which is owned by the town of Vail.
Wright and his partners were the fourth group to bring a development proposal for the property to the town.
Wright downplayed the role his partnership played.
“We could provide the expertise,” Wright said. “But it took the town of Vail’s initiative to make it work.”
As opposed to Timber Ridge, which is aimed at seasonal residents, the Lions Ridge project built apartments for full-time residents. Prices are geared toward those making about 100 percent of the area median income.
Those people, whether renters or buyers, are hard to serve in the current housing market. The county’s housing needs assessment indicates that people who make the area median income — about $79,000 per year for a three-person household in 2016 — can afford a mortgage of about $306,000. The median-priced home in 2015 cost $575,000.
The housing tax is aimed at people making around that area median.
The Vail Valley Partnership — the regional chamber of commerce — has taken the lead role in supporting Ballot Issue 1A. State law prohibits state and local governments from using public resources to campaign for or against ballot measures, although officials can advocate or oppose on their own time.
According to information on the Partnership’s pro-1A website, money from the ballot issue will help attract and keep working-age individuals and families in the valley, and states that people such as firefighters teachers and other professionals will be able to live closer to work.
The Partnership is also supporting the measure as an economic sustainability issues. In the group’s most recent workforce study, 69 percent of business operators stated that the current housing situation “negatively impacts their ability to hire and retain employees.” The inability for employees to find housing will also affect businesses’ ability to expand.
The right solution?
Wright, who was a member of the very first Vail Local Housing Authority board in the early 1990s, acknowledged that in an area with high land and construction costs, building workforce housing ultimately requires public-sector participation.
“The private sector can’t underwrite (projects) when it doesn’t make (economic) sense,” Wright said.
And that public-sector answer is drawing a good bit of apparent support. The Vail Valley Partnership Board of Governors decided to enthusiastically support the measure, and a number of local businesses are advocating for its passage.
Rob LeVine, the recently retired general manager of the Antlers Lodge at Vail, is one of those supporters.
“It’s something we need to do,” LeVine said in a voice message. “Affordable housing has been as high a priority as there is since I’ve been here (the 1970s). It’s integral to our financial success and it’s high time we did something about it.”
Others aren’t so sure.
Local real estate broker Andy Forstl was part of the initial development team for Stratton Flats, a Gypsum neighborhood a bit east of Eagle Valley High School. That development was approved for 339 units. Eagle County put $5 million into the project to help spur the development of affordable housing.
Then the economic slump of 2008 hit. Plenty of lots remain unbuilt in the neighborhood.
Forstl said he’s “on the fence” about the proposal.
“We do need it,” he said of the current housing crunch. But, Forstl added, demand can be cyclical.
“Towns should have been prepared, and purchased in the last down cycle,” Forstl said. Vail, particularly, should have been buying distressed property in the last downturn.
Then there’s the matter of where new housing might go.
“What can you do out there? What’s available?” Wright asked. “Many of the opportunities out there are down valley. That’s linked to transportation. You can’t separate the two.”
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, firstname.lastname@example.org or @scottnmiller.