County okays move to put housing tax on November ballot

“I don’t know if it is the best solution, but I was not voted emperor”

By Kristy Acuff

After discussing the ongoing affordable housing shortage, and hearing heated opposition from those attending the Board of County Commissioners meeting, commissioners voted to approve the request by the Gunnison Valley Regional Housing Authority (GVRHA) to put a property tax increase on the ballot this fall, with the money slated for affordable housing in the county. Commissioners made it clear, however, that they were only supporting the request to put the measure on the ballot, and not necessarily supporting the property tax increase.

“Personally, I do not believe the property tax funding approach is the best approach, but I am not emperor and I have no problem leaving it up to the voters to decide if they want to tax themselves to support affordable housing,” said commissioner John Messner.

GVRHA hopes county voters will approve the property tax increase of 1.5 mils for a period of 10 years. The result would be an increase of $10.80 for every $100,000 of residential property valuation and $43.50 for every $100,000 of commercial property. After 10 years, the mil rate would decrease to 0.5.

“We expect to generate nearly $900,000, which we can leverage two to three times with other funding sources throughout the state,” said GVRHA executive director Jennifer Kermode. “This will give us the annual revenue needed to sustain and expand housing projects.”

The expected $880,000 of annual revenue for a decade would be dedicated to construction, maintenance, managing and operating affordable housing projects throughout the valley.

According to Kermode, the current budget for the GVRHA is $370,775, with $248,750 coming from member contributions and the remainder from property management services and other administrative programs run by the organization.

GVRHA has a pipeline of potential sites for housing projects in all areas of the valley including lots 77 to 80 in Crested Butte, and several lots in the Larkspur, Stallion Park and Buckhorn Ranch subdivisions and possibly the North Village parcel in Mt. Crested Butte if the property tax increase passes this fall.

Gunnison resident and owner of H&H Towing, Navid Navidi, spoke in opposition to putting the tax increase on the ballot. “Everything in Gunnison runs on property taxes but don’t make us pay more than our fair share,” said Navidi. “Putting this on the ballot gives people who don’t own property, who don’t pay property taxes, the ability to vote to raise taxes on those of us who do own property. People who run businesses here can’t compete with prices in Grand Junction or Montrose. How is raising taxes going to help us compete?”

“Even though they don’t own property, people who vote for this will be impacted and as a landlord, I plan to tell my tenants that an increase in my property taxes will be passed down to [them] through rent,” countered commissioner Jonathan Houck. “So even though they don’t own property, a tax increase is going to affect them as well.”

“Yes, but a property tax is the least creative solution for this problem,” said Navidi. “I mean, a five-year old child could come up with this idea, ‘Let’s just tax property again.’”

“We are pursuing solutions to affordable housing on many different fronts,” responded commissioner Phil Chamberland. “Our own developments, developments in Mt. Crested Butte as well as legislation proposed to the state to try to tackle the problem with short-term rentals and VRBOs.”

“The proliferation of short-term rentals is the single biggest contributor to the housing shortage and yet, they are taxed as residential, not commercial, even though many of these are run as businesses. An owner buys a property and then just short-term rents it and makes a killing. These should be taxed as businesses, not residential,” argued audience member and Gunnison resident Peter Gallagher. “If Mr. Navidi has a three-day weekend when he doesn’t tow a car, doesn’t see any business, he still pays commercial taxes year-round. But the short-term rental pays a sales tax and a local marketing district tax only for the nights rented. They should be taxed commercial year-round, not just when they are renting it,” Gallagher continued.

“We are actually proposing legislation to the state to assess short-term rentals not fully as commercial property but somewhere between residential and commercial. We are also proposing a bill to allow counties to levy a short-term rental tax to be dedicated for affordable housing,” said Messner.

In a later interview, Messner explained that Colorado Counties Inc. (CCI), the lobbying group representing counties throughout the state, including Gunnison County, must first approve any proposed legislation before sending it to the state legislature for debate in January.

Currently, short-term rentals pay sales tax and a local marketing district tax (LMD) based on occupancy. The LMD taxes are used to fund the Gunnison Crested Butte Tourism Association, and not for affordable housing.

“Right now, you can only use the sales tax and the LMD tax for marketing,” said Messner. “We want a tax on short-term rentals dedicated for affordable housing.”

In the end, after much discussion, commissioners voted unanimously to approve GVRHA’s request to put a property tax increase on the ballot this fall for affordable housing.