A look at affordable housing fees from the developer’s view

“It’s a no growth moratorium…”

During the regular November 21 Crested Butte Town Council meeting, architects Gary and Jennifer Hartman addressed the council on the affordable housing fee issue. Most of the other members of the public who had attended the work session on the topic had left the meeting 90 minutes earlier.

“The housing committee hasn’t looked at what’s really being asked of a developer from a developer’s perspective,” said Gary Hartman, who is also involved in the proposed Sixth Street Station development. “First of all, let me say it is appropriate for the town to be doing affordable housing. But this proposal by the town as written is a no-growth moratorium. It is a broken ordinance.”
Hartman laid out how a project would work its way through Crested Butte and Telluride on a similar piece of property. In his presentation, he said affordable housing incentives in Telluride along with market conditions would allow a developer to make a significantly better profit potential than in Crested Butte. The building could be larger and the cost could be better absorbed given what the property could ultimately be sold for in Telluride.
“You can build more density in Telluride than you can in Crested Butte allowing for AH [affordable housing] Units to be built on site,” his written report stated. “The Crested Butte affordable housing requirements based on developer ROI [return on investment], is almost double what it is in Telluride. The affordable housing payment in lieu based on developer ROI is almost five times what it is in Telluride.”
He said the current Crested Butte regulations have created “an unsustainable economic situation for development.”
He gave the council several suggestions, including allowing density increases for all commercial zone districts to accommodate affordable housing on site. He also suggested phasing in any large fee increases.
Jennifer Hartman also told the council that the current and staff-proposed fees would have negative consequences. She is a member of the Crested Butte Center for the Arts board, which is hoping to facilitate a building expansion in the near future.
“We have an estimate for the expansion to cost about $8.8 million,” she said. “Under the current affordable housing fees, it would cost us an additional $3.4 million in affordable housing costs. It would still be an additional $2.5 million with the proposed reduction. Either one would kill the expansion project.
“We would ask that public buildings be looked at on a case-by-case basis,” she continued. “In our case, areas like the stage and classrooms wouldn’t be adding employees. The arts in Gunnison County have a huge economic impact. Arts and culture is essential to a vibrant community. This fee would kill our project.”
The Hartmans said they would return for the December 12 work session to expand on their presentations.