Linkage fee increase and annexation requirements top discussion
The Crested Butte town council is moving along in its effort to keep people living in town and they want to keep the town filled with fulltime residents.
The Crested Butte Planning Commission and Council (same people, different name tags) adopted recommendations to the housing chapter of the town’s Land Use Plan on December 20. The changes would significantly increase the linkage fees on new construction projects in town. They would also require that any annexation to Crested Butte be made up of 70 percent “deed restricted” housing.
Councilmember Jim Schmidt expressed concern with both those changes. “The annexation strategy assumes that no free market units will go to locals so you are recommending a 70 percent deed restriction rate. That doesn’t make sense to me,” said Schmidt.
He cited the Verzuh annexation and said many of the free market lots were sold to people already living in town. “I don’t understand the theory that you have to deed restrict 70 percent to get to 70 percent. That will in fact raise the price of the free market units and make it more difficult for local people to buy in.”
Affordable housing task force member Margot Levy explained that currently the town has about a 70 percent full-time residential make-up and that was what the task force would like to see continued.
“When people see the term ‘deed restricted’ they see scary things,” Levy said. “We want to have a variety of different restrictions and some of them might be as simple as selling the house to a full-time resident but at any price. The restriction would only address the issue of having someone living there full-time. There wouldn’t necessarily be a monetary deed restriction. We are hoping for deed restriction that hit the low, middle and high income residents of town.”
“We are talking about utilizing ‘resident occupied’ as opposed to income restrictions,” added town planner John Hess.
“Then it is your assumption that after the first wave of a home being occupied by a local, that won’t be able to continue?” asked Schmidt. “Locals won’t be able to afford to live there?”
“I think we have already seen that,” responded Levy.
“When the time comes to sell a house in town, chances are locals will sell it to a second home owner because they are the ones who can afford it,” added councilperson Dan Escalante.
“I am still more comfortable with a 60 percent rate as opposed to 70,” said Schmidt.
“I am fine with the 70 percent figure,” added mayor Leah Williams. “When I moved into my house in ‘93, there were a lot of people living in my block and now I’m the only one. That says a lot.”
“It says a lot about you as a neighbor,” quipped councilperson John Wirsing to laughter.
“I don’t want the town to decline in terms of people actually living in town and if we are currently at 70 percent then I think we should require that,” said Escalante.
“I like having various deed restrictions with flexible tiers,” said councilperson Roland Mason.
“I agree,” said councilperson Phoebe Wilson. “It helps create vocational diversity. The tiers will shake out with different prices. I think that works.”
“We reached all that in Verzuh without restrictions,” said Schmidt.
“A lot of other resort communities are trying to play catch-up to get back residents living in town,” noted councilperson Reed Betz, “and the reality is we probably have only one more opportunity for a large annexation to come into town. I’m good with the 70 percent.”
The majority of the council was also content with the 70 percent figure.
As far as the increase in linkage fees to pay for affordable housing, Schmidt felt the rapid increase could deter construction in town.
The task force hopes affordable housing requirements will be implemented on a sliding scale so smaller residential projects would pay less in affordable housing fees than larger homes. For example, Hess explained, a house smaller than 2,000 square feet would be charged a so-called mitigation rate of $2.85 per square foot; a house larger than 3,000 square feet would be charged a mitigation rate of $4.50 per square foot. Currently the rate is $1.82 a square foot for every residential project. The mitigation rate refers to the percentage of housing demand generated by new development that new projects must address.
The recommended fee hike on the commercial side is even larger and would require physical construction of affordable housing units. The current fee in lieu of providing housing is currently $2.08 a square foot. Based on a formula meant to determine affordable housing impacts and needs of each project, the amount of units demanded by the town would be based on the type of use being constructed and how big the project is. For example, a 20,000-square-foot project that is strictly commercial would be required to build 9.14 affordable units of between 800 and 1,400 square feet each. The developers would be required to build nine units for 19,700 square feet of commercial space and pay $93.35 per square foot or $28,005 for the 300 square feet of commercial space that results in the .14 fraction of an affordable housing unit required.
Hess pointed out that in Telluride, the fee is $171 per square foot of commercial building. Hess and the task force made it clear that the task force is recommending that builders will actually build housing units as opposed to paying into the affordable housing fund.
Schmidt suggested the town phase in the increase over a four-year period.
“Spreading it out over four years might encourage someone to build this year or next rather than four years from now and that is a big part of our economy that is still hurting,” said Schmidt.
The council acknowledged that the economic times are not exactly rosy at the moment; council members are on board with phasing in the linkage fee increase over four years.
Also as part of the changes, the council appointed an official affordable housing committee made up of Reed Betz, John Wirsing, David Owen, Heli Mae Peterson, Jeff Buehler and Margot Levy.
The recommendations need to be turned into ordinances and approved by the council before they go into effect so there will be time for the pubic to comment on the recommended changes before they are implemented.