Coming down on those not renting their accessory dwellings
By Mark Reaman
The Crested Butte town council and staff are beginning the gritty work of digging deeper into the affordable housing issue. They have instructed town attorney John Belkin to begin drafting an ordinance to put more teeth into enforcement provisions for those not actively renting accessory dwelling units as they are expected to be.
They also spent an hour-and-a-half Tuesday at a work session looking at the broad picture of how to develop rules, regulations and requirements to address affordable housing with more focus. That includes determining how to phase out the 61 potential units on blocks 79-80 on the northeast side of town that is seeing infrastructure installed this fall.
“This is a 100,000-foot view to start off the discussion and eventually we need the council to decide on details and end up with guidelines,” said town planner Michael Yerman as he led the discussion with Gunnison Valley Regional Housing Authority executive director Karl Fulmer. “I already have 90 people on a list who are interested in the units on blocks 79 and 80. I would expect that we will ultimately see a list of 200 to 250 who want a space over there.”
Yerman said the town and housing authority will sponsor “home ownership” classes later this fall to let interested people know what is involved in getting an ownership opportunity with a town deed-restricted lot. He said some people have expressed surprise they would have to come up with a down payment, for example. They also have to understand they are not getting a house tied to the “market rate” in a growing resort town.
“The town has several good affordable housing projects,” Yerman said. “But we want to move more to a steady program for the community. Right now there are different rules and qualifications for each project. We need to pull them all in and simplify. The ultimate goal is to put people in successful housing situations.”
Part of that goal, he explained, is accomplished through simple and practical qualifications that make financing a home doable. He wants an ongoing pool of qualified applicants. There is little interest in building condominiums and under the state Tabor limitations, having the town construct rental units isn’t likely without major outside funding.
“The town itself is having issues and will need housing for its employees,” he said. “We need to think about people like snowplow drivers.” He suggested a need for at least nine more units to be added to the current seven set aside for town employees and other essential employees (such as Mountain Express drivers).
“CB South used to be the place they lived in the past but that is disappearing,” agreed town manager Todd Crossett. “We also need a funding stream for affordable housing projects and maybe fees on vacation rentals is one way to address that.”
Fulmer said the council needed to decide who should be allowed to apply for a chance at town controlled affordable housing. Using the AMI (Average Median Income) figures for Colorado, the question was how high should a person or family’s income be before they cannot apply. Fulmer and Yerman said the council should decide on somewhere between 160 percent and 200 percent of AMI. A two-person household could make $91,840 and meet the 160 percent requirement. The 200 percent of AMI figure would allow a couple to earn $114,800.
“That sounds like a lot of money but given the spread between income and housing prices, it isn’t,” said Fulmer.
The theory was that mid-level managers make in the 160 percent range while upper level managers, school employees and even department heads in the town would qualify under the 200 percent of AMI figure (again, for a two-person household).
“This valley is similar to other resorts,” said Fulmer. “We are not unique. We understand that if you choose to go above 160 percent, it is politically problematic. But the reality is the cost of housing is high and trending up.”
Councilman Jim Schmidt asked where that put the couple making 100 percent AMI ($57,400) or under. “That’s a big, important question,” he said.
“We are just determining who can apply to be in a lottery,” said Fulmer. “There will be other qualifications but a lender wants to make sure they can make the payments. It is a hard dilemma.”
The council will consider how to handle retirees that want deed-restricted housing along with people who live here but earn their income outside the county. There appears to be a growing demographic of people in such situations.
Yerman said the town would start out selling deed-restricted lots next year to qualified local buyers. That might include three of the six so-called micro-lots that are part of the project. That revenue would help replenish a dwindling affordable housing fund. In 2017, the town could then perhaps build a couple of duplexes and a triplex on the blocks. He laid out a seven-year timeline to fill in blocks 79-80.
Upping ADU enforcement procedures
Meanwhile, the council wants the town to be able to take effective legal action against people who have deed-restricted accessory dwelling units on their property but are not using them. They have figured out there are about 20 such situations and it appears the same property owners choose to not rent the units year after year. The ADUs are deed restricted to long-term renters as part of an agreement with the town that waived construction tap fees and allowed more density on the properties when the houses were originally built. In return, the ADUs were to be rented regularly to long-term residents.
Mayor Aaron Huckstep said the vague language in the agreements made it somewhat unclear if the town really had any opportunity for strict enforcement. He suggested reaching out and interviewing the offending ADU owners to determine their reasoning.
Councilperson Shaun Matusewicz was the most passionate about turning up the heat. He said that while “carrots are great, these people are in violation of a contract. Let’s pull out a stick to enforce the contract. We need to go after them.”
Councilperson Chris Ladoulis said the goal was to get the ADUs in the active rental pool and if the language was so unclear that citing them into court would be difficult, the council needed to focus not on “sticks” but on ways to get the units rented.
Town attorney John Belkin was not at the meeting but Crossett and town building and zoning director Bob Gillie said Belkin had talked to the Telluride town attorney and felt confident the council could tighten up the code to impose meaningful enforcement provisions on current and future ADUs.
“We have a fairly good compliance rate already,” said Gillie. “But when John (Belkin) is here, he can explain the potential choices to pursue. I do think there is a moment in time when you have to try and force people to comply. If there aren’t repercussions, some people will never do it. We can approach them first and talk to them, but we have done a lot of that already. But we can ratchet up the communication. Without a stick at the end of the tunnel, what’s the point?”
“That would be the cheapest way to start,” said Schmidt. “Let’s see if it gets us any replies. They made a pledge and aren’t keeping it and that bothers me.”
Gillie said many people owning homes in town with ADUs no longer need the rental income. He also said most of the new houses being constructed don’t have ADUs.
Citizen Priscila Palhavã said perhaps more incentives would entice people to build more ADUs. “If you keep putting more and more sticks on people, there will be less and less of these,” she said. “Enforcement is necessary but incentives are also good.”
“The council is just searching for ways to figure out how to enforce a well intentioned policy,” said Huckstep.
While Huckstep wanted more specific information from Belkin about how the Telluride affordable housing enforcement situation was playing out, the rest of the council wanted the town attorney to immediately start drafting an ordinance to tighten up ADU compliance. Look for a draft of such a code change in the near future.