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County increases workforce housing linkage fees

“A necessary step to close the affordable housing gap” 

By Kristy Acuff

For the first time since 2011, the Gunnison County Board of County Commissioners will increase workforce housing linkage fees approximately 5 percent to 7 percent for new construction and additions, beginning in 2019.

County commissioners approved the increase at a board meeting Tuesday, July 3. According to Linda Nienhueser, county finance director, the linkage fees have generated between $155,000 and $210,000 annually over the past three years to fund workforce housing across the valley.

From now on, the county will generate new linkage fees annually, based, in part, on the affordability gap between market home prices and what someone earning the area median income (AMI) can afford to pay. The affordability gap has increased to $126,461 this year, up from $111,559 in 2011.

“I’m still not a fan of linkage fees,” said commissioner Phil Chamberland, “but I can see why they are necessary to help offset the affordable housing gap.”

Under the increased fees, a 5,000-square-foot residential project would incur $11,438 in linkage fees, while a 2,500-square-foot home would incur only $1,857 in fees. The fees are based on the estimated number of employees needed to build the new construction and the mitigation rate, which is meant to offset the affordability gap between market prices and what the AMI earner can afford for housing in the valley.

In other words, new construction brings employees to the valley who are in need of housing that is currently unaffordable. The larger the construction, the more employees; hence, the higher the linkage fee needed to pay for affordable housing.

Under the approved increase, the mitigation rate for residential development between 500 and 2,000 square feet is 5 percent. The rate rises linearly up to 40 percent for development up to 4,000 square feet and then plateaus at 40 percent for units larger than 4,000 square feet.

The mitigation rate is set at 1 percent for all commercial development.

There are several exemptions for projects that do not incur linkage fees. Any builder/owner earning 120 percent or less of the AMI can apply for a fee exemption. Any builder constructing deed-restricted affordable housing or anyone constructing a secondary unit to be used for affordable housing is exempt from the fee. Finally, any addition or reconstruction of fewer than 500 square feet may be exempt from the linkage fees.

Funds from the linkage fees are used by the county to develop affordable housing in the valley. For example, the eight affordable units currently under construction in Stallion Park are financed with the linkage fee funds, according to county economic and development director Cathie Pagano.

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