Second homeowners excluded from linkage fee exemption

The exemption is intended to benefit Gunnison County residents

Second homeowners benefitting from a “workforce housing linkage fee” exemption intended to benefit the working class have caught the attention of Gunnison County commissioners and staff. A new exemption requirement—residency in Gunnison County—will likely be added to the Land Use Resolution.
“There are a discrete number of things that can be exempt and the number one reason is earning less than 120 percent of the Adjusted Median Income,” Housing Authority Executive Director KT Gazunis told the county commissioners at a work session on Tuesday, March 22. “Most people who have applied for this [exemption] have gotten it.”
The workforce housing linkage fee was created in 2006 to produce affordable housing options for workers in Gunnison County. County studies had suggested that new development creates new jobs, which often creates the need for additional housing. The fee was intended to create a fund that could be used to generate more affordable housing—the exemption was created to keep the fee from negatively impacting the very people it was intended to help. But over the course of the last two years, two applicants who were granted exemption were not residents of Gunnison County.
“In both cases, they were not particularly wealthy individuals,” Gazunis said. “I didn’t know if it was a second home or speculation, but I had to find them exempt because their personal income taxes were under 120 percent of the AMI.”
Gazunis brought the matter before the board to confirm that the exemption was indeed intended to benefit county residents, and suggest adding a residency requirement.  County Commissioner Hap Channell said the exemption was very clearly intended to help local residents.
“We did not want to be assessing the very people we were trying to help, thus we put 120% AMI or lower,” Channell said. “The intent all along was residents. Absolutely. We get into really knotty problems [otherwise]. Do we use the AMI in the county where they live? The AMI here? The linkage fee is the cost of doing business in Gunnison.”
County Manager Matthew Birnie then suggested there would be some nuances in determining the language of an exemption amendment, such as defining residency so that workers who move to the area for a job are not penalized. And Channell pointed out that some second homeowners are intended as retirement homes, in which case the homeowners will someday be residents. But these concerns did little to override the general consensus that a residency requirement is needed.
“I’m willing to [consider], on a case by case basis, a waiver [to the residency requirement],” Gazunis said.
The board directed Gazunis to proceed with developing an amendment and a process for waivers, but not without some additional discussion surrounding the validity of the fee itself. County Commissioner Phil Chamberland raised some concerns he’s been hearing from constituents.
“Just recently, someone wanted to build a 5,000 square foot space, just a pole barn, that would have brought five to six jobs immediately,” Chamberland said. A project of that size would have incurred a linkage fee of $16,759. “That added cost to someone bringing in jobs felt counterintuitive.”
“That feels like a separate agenda item,” Commissioner Paula Swenson said.
“A few people have been bringing me the question of how we would feel about having a moratorium on the fee for a year to stimulate folks who are on the fence [about their building projects],” Chamberland continued.
“That feels like a special work session, too,” Swenson said.
“From my perspective, I don’t want our linkage fee to work against its intent,” Chamberland said.
The board decided to schedule a separate work session to consider these questions. The good news, they all agreed is that building permits are up over last year.
“There were eight total commercial permits last year whose value was $4 million higher than in 2009,” Swenson said. “We had a total of 141 [commercial and residential] building permits in 2009, and 173 in 2010. This includes commercial, homes, decks, sheds, everything. And single family residences went from 46 to 51. To me, that was exciting to see we’re going in that direction now. More houses are being built again.”
Chamberland agreed that he had seen similar improvements, but suggested that population has not been rising at the same time.
“To say [development] creates a need for more affordable housing is being shown not to be correct,” Chamberland said.
“We’re gonna have a big old work session on this,” Swenson responded. The date of the work session has not yet been set.