CB council polishes rules for biz-owned affordable housing

Don’t want a “company store” situation exploiting workers

By Mark Reaman

The Crested Butte Town Council agreed to adjust the affordable housing guidelines to address some issues with the latest deed-restricted property that will be owned by local businesses. Ten such units are beginning construction, with seven local businesses already signed up to purchase them for employee housing.

But the council wants to make sure there are no loopholes that might allow non-workers from residing in the units in the future. There was also concern that a business that employs a person might also control their rental situation, which could cause problems.

Council agreed that a Gunnison Valley Rural Housing Authority grievance committee could be utilized to listen to businesses make the case to allow some employees to use the residences if their circumstances didn’t strictly meet the guidelines.

The council will also allow the businesses that own the units to rent to other qualified workers if for some reason they don’t have a qualified employee who needs the space. But that will be capped at two years, after which time the business would have to sell the unit. Business owners also couldn’t buy a unit and live it in themselves.

Crested Butte community development director Michael Yerman said several safeguards would ensure the units would be occupied by qualified renters. The approach of the guidelines is “trust but verify,” he told the council in a memo at the September 16 meeting. He said the long-term affordability of the units is also protected with a maximum sales price appreciation cap.

Councilwoman Mallika Magner said she wanted to make sure the guidelines were tight enough to discourage someone intending to cheat the system. She didn’t want to see some parents form a business entity and let their child live in the unit. “I want to make sure there are not ways for subsequent buyers to get around using it for housing full-time Gunnison County employees,” she said.

“We will use our best judgment and the reality is that people living there will have to be employed,” said Yerman.

Magner expressed concern that an employer could have too much control over an employee by holding his or her living situation over his or her head.

“The lease would be between the employee and the business,” Yerman said. “So that is up to the business.

“So if someone is in an untenable situation, like being sexually harassed at work, the person has to just suck it up or lose their housing?” asked Magner.

“In a case like that there are other legal recourses,” said town manager Dara MacDonald.

“That’s easier said than done sometimes,” said Magner.

“The town gives employees 60 days to vacate their units in the employee apartments we own,” said MacDonald.

“So with these it is up to the lease? An employer could hire someone and put them in the unit and then find someone a little better and tell the first person they have to leave?” asked mayor Jim Schmidt.

“The tenants have rights under Colorado law but the town doesn’t want to get involved in tenant-landlord disputes,” said MacDonald.

“We are trying to protect the people who work here,” said Magner. “Can we add a 60-day provision?”

“Look at it from the other side. A really bad employee can hurt the business and other employees as well,” said Yerman, citing a situation he was in with such a unit while working at a t-shirt shop in Vail. “No one would want that person to stay around.”

“I agree it is a two-way street,” said Schmidt, who said he had to fire people immediately in the past for stealing.

“Businesses are putting long-term loyal employees in these units,” said councilwoman Laura Mitchell. “They are housing their managers.”

“We need to be thinking two or three businesses down the road,” said Magner. “We don’t want a ‘company store’ situation where a business exploits their workers. It is unusual to have housing linked to employment. I want to avoid situations where employers can take advantage of employees.”

“We also have to trust the process and the local businesses,” said Mitchell. “We can’t pick it all apart.”

Town attorney Barbara Green said under state regulations, a renter couldn’t be forcibly kicked out of a place for about a month.

The council agreed to approve the changes in the guidelines with the understanding the staff needed to be aware of people trying to cheat or take advantage of the system.