Debate over rental versus ownership
[ By Mark Reaman ]
A request for proposals (RFP) for the Sixth and Butte affordable housing project in Crested Butte will go out to developers next month. That RFP will include finishing out construction of the affordable lots in Paradise Park. Between the two projects, another 72-74 deed restricted housing units that include about 124 additional bedrooms are anticipated to be added to the town housing inventory. The idea is to begin construction next summer.
The town council approved the final plan for the RFP on Monday, October 18 with the biggest discussion coming over the ratio of rental versus for sale units. Ultimately council agreed to stay with a mix of about two-thirds of the units being rental and one-third being owned by residents. Several large buildings will be constructed across from the Gas Café at Sixth and Butte but a portion of the land needs to be cleaned up by the town since an old dump had been situated on the property decades ago. That is expected to take place next spring and cost the town about $1.8 million. Total project expenses for the town are estimated to be about $5.1 million.
The town would basically turn over the land to whichever developer is awarded the RFP. That company could then use the land for collateral and could either sell or rent the units within certain deed-restricted price restrictions. Despite the potential for significant upfront cost savings, council wanted to avoid using a LITEC (Low Income Housing Tax Credits) funding if possible since that comes with several federal strings attached. Anthracite Place is a LITEC project.
Councilmember Chris Haver emphatically wanted to avoid the LITEC model and pushed to have more of the project be rental units so a potential developer had more income potential.
“The ratio of rental to ownership continues to be a concern of mine,” said Haver. “I think we need more rentals at Sixth and Butte. Paradise Park is a place for ownership opportunity, but we can always fill rentals while in the past it looked like it might be hard to sell some units in Paradise Park.”
Housing consultant Willa Williford said certain developers love to build rentals and others love to build for sale units. She said it shouldn’t be a problem filling either in current times. “We are seeing substantial interest in any for sale lottery these days,” she said. “We are a small market and putting a lot of units for sale at once has impacts but the market right now indicates they should sell. I think the demand will be there, but we shouldn’t expect a 500 person waiting list.”
“I’m still hesitant with ownership,” said Haver. “Sixth and Butte could serve a much larger population of people willing to rent rather than buy.”
“I like having some ownership included at the Sixth and Butte community,” said councilmember Ian Billick. “It would be a good anchor.”
Citizen Kent Cowherd said he supported more rentals over ownership in the project. “We have an extreme rental shortage in town and I would like to see more extreme rental opportunities. That would help bring town back into balance.”
Councilmember Jason MacMillan cited studies that indicate ownership opportunities in housing projects help anchor the developments that include rentals. “There is a consistency and people owning there can then show the newcomers the ropes,” he said.
“Town will live with this project a long time, so I ask the staff to look for opportunities to make it special. I don’t know what those opportunities might be but if you see them, go for it,” said Billick. He said his perception is that Paradise Park with its emphasis on deed restricted ownership has a more neighborhood feel than a more transient rental property like Anthracite Place.
“I would give up a few units to make the living situation more desirable,” said councilmember Mona Merrill.
Mayor Jim Schmidt had asked staff to look at a potential rooftop deck to provide more outdoor social space for residents but planner Mel Yemma indicated initial estimates made it cost prohibitive. Community development director Troy Russ said the RFP could include an option for a developer to include that design element.
“The lack of outdoor gathering space is a factor at Anthracite,” said councilmember Mallika Magner. “We need to foster a sense of community through design.”
“The hope is to accommodate that,” ensured Yemma. “We heard it from the community and communal outdoor space is important.”
“I just don’t want to pigeonhole the project,” said Haver. “Let’s keep it open and see what comes back from the developers.”
Williford warned about not giving enough direction in the RFP for developers to do a thorough proposal. “We need clear direction on that aspect. We don’t want a messy process.”
The majority of council agreed to support the ratio of one-third for sale units to two-thirds rental properties. The RFP and ultimate developer selection process speeds up with the release of the RFP in November. The development proposals should be returned to the town before the end of the year with a developer selected by February.