The Crested Butte News Serving the Gunnison Valley since 1999
Pledges $100,000 for opportunity to rent a unit for 20 years
[ By Mark Reaman ]
With the hope of getting five new affordable one-bedroom housing units up and running in town by the end of next year, the Crested Butte Town Council agreed in principle to take on a so-called Master Lease Agreement with the Valley Housing Fund (VHF) for one of five units to be located in the town’s Mobile Home District (M-District).
The cost to the town is an initial $100,000 for the right to rent one of the “Tiny Home” mobile homes for 20 years on the land formerly owned by Paul Redden.
Town will also pick up $36,000 in water and sewer tap fees for the overall project.
The town will pay the VHF $849 per month or the equivalent of what someone earning 60 percent of the Area Median Income (AMI) can afford annually.
Under the current town rental policy, the town would charge a tenant $500 per month for a one-bedroom, 490-square-foot unit, so there would be a monthly subsidy of $349.
Staff told council the town would pay about $220,000 for use of the unit over the next 20 years.
Staff had suggested the initial $100,000 be paid out over four years. But VHF representatives Jim Starr and Bob Gillie asked that the upfront money be paid faster. The VHF had purchased the three-lot property for $500,000 with another $200,000 budgeted to prepare the site for the additional mobile homes.
The VHF is looking to set up another three or four master leases with other local entities such as the RE1J school district, the Crested Butte Fire Protection District and Mountain Express. The money raised through the Master Lease Agreements would go to pay for getting the homes to the site, constructing insulated skirting, decking and storage sheds. Each home would be deed restricted with the purpose being to house an essential worker in town at a rent affordable to someone not making a lot of money.
“These address the need for low-cost rentals,” said VHF board president Jim Starr.
“We all need to work together and make a dent in the housing problem,” added Bob Gillie of the VHF board. “We know it is only five units, but that is what has made Crested Butte successful with affordable housing over the years. We have done things small but they all add up. We found that by getting five small, one-bedroom units on that property it addresses a need. This type of product was one of the highest identified needs and one of the goals is to house people in the lower end of the AMI.”
Gillie said with the town’s help, the units could possibly get there before the end of 2021 but certainly in 2022. He said according to manufacturers he had spoken with, there was a several months lag time between ordering and delivery of the mobile homes.
Crested Butte community development director Troy Russ told the council the money was in the affordable housing fund if they wanted to speed the process of paying the $100,000 quicker than over four years. The staff was looking for council guidance.
Mayor Jim Schmidt said mobile homes were one of the last free market opportunities that locals might be able to afford so he asked why the town should focus on this type of development.
“One bedroom units are most in demand,” responded Gillie. “We could put fewer two- or three-bedroom mobile homes there but we don’t want to qualify roommates since that’s always tricky. This offers more flexibility and would bring in about the same number of people.”
“And the reality is that those mobile homes over there aren’t truly affordable anymore,” added Starr. “One is ready to sell for $450,000 with the plan to replace the unit on the lot. This actually keeps units affordable.”
The VHF said of the 28 sites in the M-District, 21 were owned by locals and seven owned by people living out of the county. The fear is that eventually the ratio will flip as the homes go up in price.
Town manager Dara MacDonald said while the town could pay the $100,000 over two years or even up front, it would limit options for the council in the near future.
Council member Will Dujardin voiced frustration that he felt hurdles were being erected to stymie the project. He emphasized that the money was available and most people would be happy to pay more than $500 per month for a one-bedroom place in town.
MacDonald said the staff was just looking for council direction and laying out the options. “We have the cash,” she said. “It’s simply prioritizing. That said, I wouldn’t recommend transferring the cash until a building permit is pulled by the Valley Housing Fund.”
“The longer we wait, the more expensive this becomes,” said council member Mona Merrill. “We all want this project to happen so maybe we pay the $100,000 out over two years.”
Starr predicted that would likely be acceptable to the VHF board.
Gillie said the hope was to get the town to take the lead position and be an anchor tenant that could perhaps lead other entities to step up in a similar fashion. “The fact is getting it all together in 2022 is realistic. Doing it in 2021 could be a stretch. The money would go to help get the homes situated.”
“Receiving the $100,000 in 2021 could be helpful to getting the units up sooner,” said Starr.
“It sounds expensive but is something we need to do. The current units on the parcel now need to be pulled out. They’re really rough,” said council member Laura Mitchell. “I’m a little concerned we wouldn’t own it after 20 years but that will be for someone else to deal with.”
MacDonald assured her a deed restriction would be imposed to limit the future rentals to workforce housing at a minimum.
Dujardin said he supported paying the $100,000 to the VHF in one chunk in 2021 “to get a very important project up in town.”
The rest of the council agreed to the idea and the town staff will work out the details with the VHF and bring back an agreement to the council.
“We appreciate the council taking a proactive approach to this,” concluded Gillie.
