CB council outlines regs for new ADU renters

Two tiers based on taking town money…or not

By Mark Reaman

In an effort to diversify its affordable housing portfolio, the Crested Butte town council is shying away from putting strict regulations on the future Accessory Dwelling Unit (ADU) rental pool. The idea is to address workers first through other workforce housing-oriented projects so that, with respect to future ADUs, the focus would be on community longevity as an eligibility qualification for renting an ADU.

The council directed staff to come up with a two-tiered system, placing property owners who build an ADU but who do not take financial subsidies from the town in the first tier and those who do take subsidies in tier two. Those subsidies include the potential of waived water and sewer tap fees, along with building permit fees, worth almost $40,000. The council will be considering even more robust financial incentives to get ADUs built and have generally discussed the idea of paying as much as $200,000 to get such units constructed. The staff has yet to flesh out details of that potential subsidy, but it will be discussed as part of the budget process in the fall.

Under this system, tier one homeowners building an ADU would be able to rent to anyone who has lived in the community for at least five years. In the second tier, if a homeowner does take the town subsidy, they would be required to rent to either someone working 1,200 hours a year in the valley (about 20 hours per week), a full-time Western Colorado University student, someone getting a trade license (like an electrical apprentice) or someone who is retired but worked at least 1,200 hours a year locally for four years before retiring. All ADU rentals in both tiers would have to be for at least six months with no allowance for any short-term rentals or personal/guest use.

“For me with the new ADUs, it’s less about work and more about community building,” said mayor Ian Billick.

“I come down more on the work side,” countered councilmember Chris Haver. “But I don’t want restrictions to be so stringent that it inhibits the ability to rent them.”

“We have to be aware of the bureaucratic burden on the owner,” said Crested Butte housing director Erin Ganser. “We should make sure we have something that is easily understood and administered. 

“ADUs, philosophically to me, fill a niche other than strictly workforce housing,” said councilmember Anna Fenerty.

“It seems to me an incentive to the homeowner that is considering building an accessory dwelling unit would be to have a bigger pool of possible renters,” said councilmember Mallika Magner. “Maybe this is the place to be slightly more generous with fewer restrictions.”

Crested Butte community development director Troy Russ said that any new regulations would apply only to new ADUs and not the 93 existing units.

“We are talking about restricting more from where we currently are, while keeping it pretty loose,” said councilmember Beth Goldstone. “But I thought the whole point was to focus on the workforce. A concern is that we allow remote workers to come in and rent ADUs and that results in higher rents for those units.”

“ADUs are an opportunity to be more flexible,” said Billick. “Given some of the conditions that come with the federal money we hope to get for other projects for example, there will be plenty of restrictions.”

“Crested Butte is not the standard, traditional work-style type of place,” noted Magner who pushed back at the staff’s original recommendation that renters must work at least 1,500 hours a year, or about 30 hours a week. “Many of us didn’t come here to work and just make money.”

“A lot of restaurant workers don’t work 30 hours a week, 50 weeks a year,” pointed out Fenerty, who suggested the hour threshold be reduced to 1,200 hours a year. “They work during the seasons and can make a lot of money not working those hours. Plus, we still want an opportunity for ski bums in this town who would be happy to work 20 hours a week and just get by.”

Billick and Magner said that given real estate prices in town, the tap and permit fee waivers of about $40,000 would probably not be enough incentive to entice the wealthier demographic to add an ADU to their new home. Russ pointed out that there were still some homes in town owned by working locals that might be incentivized to add on an ADU given the possible financial incentives.

Councilmember Gabi Prochaska suggested the two-tier system to allow long-term community members of at least five years as the only restriction to rent a new ADU if no town subsidies are used.

Russ said the town had never received an application for an ADU that did not include the request for the fee waivers, which until last year were only a portion of the tap fees, or about $18,000. Town manager Dara MacDonald added that some restrictions would be appropriate given taxpayer dollars were being used to subsidize the ADU cost. Ganser reminded the council that ADUs were not a use by right but rather a conditional use in town.

“I like the idea because we will learn something,” said Billick, noting it would be interesting to see if anyone turns down the subsidies to avoid the tighter work restrictions for renters but nevertheless builds an ADU.

Town staff will develop details of the direction set by the council and a public hearing on the issue is scheduled to take place May 15. Haver voted against setting the ordinance for second reading.

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