Commissioners waive some county workforce housing fees

County hopes small tweaks to LUR will ease county’s housing crunch

By Toni Todd

Gunnison County officials have found a way to help ease the financial burden on those who would build workforce housing units as long-term rentals.

On August 15, Gunnison County Commissioners unanimously approved an amendment to the county’s Land Use Resolution (LUR), waiving the mandatory affordable housing linkage fee on new construction, if that construction is designed to house locals.

Community development director Cathie Pagano explained that some applicants looking to create such housing, in some cases for their own employees, are finding the linkage fee to be “a disincentive to build workforce units.”

“How do you ensure [what they build] becomes workforce housing?” asked county commissioner Phil Chamberland.

Pagano explained that a deed restriction for such units is required.

County manager Matthew Birnie said it’s been done on an individual applicant basis. He gave the example of a request from Gunnison County Electric Association to build housing for some of their employees.

“Let’s say this is an auxiliary unit. Does this require that [the applicant] would have to rent it?” asked Chamberland.

“I think the deed restriction covers that,” Pagano said.

“The housing authority would monitor that unit periodically to be sure it’s being used how it’s supposed to be,” added Gunnison Regional Housing Authority executive director Jennifer Kermode.

“We have an applicant who’s proposing a commercial building and he wants to have the housing up above,” said Pagano. “There is a sprinkler requirement for what he’s proposing. I thought with that he would drop the application, but he said no, he still wants to do that.”

“It’s not always about cost,” added Birnie. “It’s about being able to stay in business.”

Commissioner John Messner brought up the distinction between affordable and workforce housing, suggesting this approach is warranted for the latter.

“Workforce housing is the proper term,” confirmed Birnie.

“I always thought we should have a price point [on homes],” said Chamberland. “If someone is going to build a house that sells for $220,000, that, to me, is workforce housing.”

While the amendment addressed only rental units, commissioners agreed the notion of a concession for lower-cost homes for sale was worth discussing in the future.

“This is one big piece that came up in the OVPP process,” said Commissioner Jonathan Houck, referring to the One Valley Prosperity Project, “asking: What are things we can do every time we have an opportunity to review our rules and regulations to make the situation better? So, thank you for looking at those,” he said to Pagano.

Fees are typically collected as part of the building permit for new construction, to include additions larger than 500 square feet. Structures are assigned a mitigation rate based on square footage. A home smaller than 2,000 square feet, for example, is assigned a mitigation rate of 5 percent, resulting in a fee that ranges from about $356 for a structure smaller than 600 square feet, to $542 for a home larger than 1,999 square feet. Linkage mitigation rates graduate upward as the square footage increases. A home of 4,000 square feet or larger is assessed a mitigation rate of 40 percent, with a linkage fee of approximately $8,140. For a home of 9,000 square feet, the linkage fee is $36,478.

Commercial property is assessed a linkage fee of $1,785 per 1,000 square feet.

The county uses the terms workforce housing and essential housing interchangeably. Workforce housing is defined as either a rental or ownership opportunity for Gunnison County residents who earn less than 120 percent of Area Median Income (AMI). Pagano shared the latest modification to the LUR, outlining when someone building workforce housing or adding such housing to a commercial project might qualify for exemption from the linkage fee.

Here’s a summary of the new resolution and how it will work:

1. The Workforce Housing fee may be waived if the value of the Essential Housing unit being built is equal to or greater than the value the Essential Housing fee for that project.

2. A Certificate of Occupancy is required for the Essential Housing unit(s).

3. The Essential Housing unit must meet the Gunnison County Land Use Resolution definition of essential housing.

4. A deed restriction that limits the use of the unit must be recorded prior to issuance of the Certificate of Occupancy.

5. If the construction cost of the Essential Housing unit(s) does not exceed the Workforce Housing fee, the remainder of the Workforce Housing fee shall be paid to Gunnison County.

The LUR already exempts homes built for households earning less than 120 percent of AMI, and residences that are deed restricted to households qualified by the Gunnison Regional Housing Authority. It also exempts reconstructions of structures 500 square feet or less, additions 500 square feet or less, an integrated secondary residence that’s deed-restricted for residents who earn 120 percent or less than AMI, and deed-restricted mobile homes that also meet the essential housing criteria.

Considering LUR requirements and waivers, the Brush Creek project could qualify for linkage fee exemptions that were in place prior to this latest amendment, but only for deed-restricted units that qualify as workforce housing. Some of the units planned for Brush Creek are identified as suited for those earning upwards of 140 percent of AMI, which does not match the LUR’s definition and would therefore not qualify for linkage fee exemption, nor would the market rate units planned for the project.