County passes increase to building permit fee

Effectively raises fee for all homes valued above $750k

By Katherine Nettles 

If you are building a home in Gunnison County valued at more than $710,000, county building permit fees will now cost more than they did previously. Gunnison County commissioners approved of more changes to development fees this month, amending the county building permit fee schedule to include a new flat fee of .9% for all new buildings regardless of value. The county also increased its land use fees in April.

The new flat rate is meant to have the effect of reducing costs for people building modest homes while charging a proportionate percentage for higher-end homes to cover their more complex review processes. However, that cut-off for cost savings with the new fee begins at $710,000 which many contractors say is an impossible price for locals to build within.

Commissioners held a public hearing on May 20 to hear from constituents before deciding on the new fee schedule, and based on some vocal opposition, extended the period for written public commentary until June 3. Eight additional letters came in, mostly opposing the change. When it came back to commissioners on June 17, the Gunnison County community development department dialed back its initial recommendation from a flat 1% fee to a .9% fee based on public input that the fee would add to the ever-increasing costs for residents to build a modest home in the Gunnison Valley.

The county’s community development department came forward with the recommendation this spring in conjunction with increasing the department’s land use fees. The purpose of both updates was to compensate for rising costs to the department in processing the applications and conducting site visits or inspections, and in the case of building permits, to address inconsistencies in how those fees impacted higher-end building projects disproportionately less than less expensive ones.

In a memo to commissioners on June 17, Cathie Pagano, assistant county manager for community and economic development, and Crystal Lambert, county building and health official described their final recommendation to replace a graduated fee structure in which permit fees declined as project valuations increased, even though higher value projects typically require more staff time and resources. The flat .9% fee was chosen to “standardize the process, improve equity across all project sizes and reduce administrative complexity and disputes,” according to the memo.

The memo also describes the revenue issues that have at times required the department to rely on the county’s general fund to subsidize its operations. The projected budget for 2025 is $1.118 million for the development review program. The previous revenue calculation prior to the amendment adoption was $1.2 million, and with the .9% fee revenues are now expected to be $1.3 million. 

Staff recommended the county also eliminate the separate review fee. “Based on our previous discussions and public feedback staff recommends a fee of .9%. A .9% fee will have the effect of reducing permit fees for projects less than $710,000.”

Staff also recommended that commissioners amend the building code so the newly established building permit fee schedule would not be in it. The schedule could now be amended in the future without further building code amendments or public process.

Commissioner Jonathan Houck weighed in first, speaking in favor of the proposed resolution.

“I have noticed a trend in conversations and comments in public meetings and written correspondence from people that there seems to be a generalized sense that people take all the fees they have to pay, and they lump them together and lay them at the county’s feet,” he said, noting that not all the fees are associated with the county, including special district fees such as those of the fire districts or utility providers. He said when it comes to county fees and their impacts on locals, he felt the new schedule rights the tables. 

“We’re trying to make sure the fees appropriately reflect the amount of time spent on the projects,” he said. “The truth of the matter is that Gunnison County taxpayers are subsidizing the costs of larger, more expensive houses. That’s fact. It’s math.” 

Houck said he sympathized with concerns about rising building expenses, but defended the recent building code updates the county has passed such as the Wildland- Urban Interface (WUI) codes. “It turns out they are not costing twice as much, and we’re seeing that our suppliers regionally are bringing more of those materials in which brings down those costs.” 

Commissioner Laura Puckett Daniels recapped that the county’s general fund, made up of taxpayer revenues, was previously subsidizing the costs of development review. “What we’ve seen in Gunnison County is predominantly development in the last five years of very high-end homes. Those very high-end homes pay a fraction of a percentage right now under the current permit fee regime.”

High end…or the new average?

Pucket Daniels noted that for a $1.5 million home under the current fee assessed, the building permit fee was .68% ($10,200) and that percentage got lower the more expensive the project was valuated. Under the new flat fee of .9%, a $1.5 million home will pay a fee of $13,500. 

“We are right sizing this,” she concluded. She stated that the new fee schedule proposals would “actually allow for people building modest homes to see a reduction in fees and for people building very expensive homes to pay a proportionate percentage that is fair and equal….it is more advantageous to the regular working person in Gunnison County and not less.” 

She acknowledged, “I know it is hard to build for $710,000 in this valley. I get that. And, we’ve got free [model homes] you can use, and we are seeing people do it.”

She questioned whether someone with the average median income in the valley could build a home for $1 million anyway. “The person who makes that median income, who is in the service industry or working at the hospital or as a teacher, that is who we are benefitting in this new regime.” 

According to the 2024 Gunnison County area median income issued by the U.S. Department of Housing and Urban Development, the valley’s median income ranges from $78,700 for a single occupant to $112,500 for a four-person household. The average new construction costs are between $800 and $1,200 per square foot, according to the Crested Butte News’ semi-annual real estate report released in March. That makes the average build cost of a 1,500-square-foot home exactly $1.5 million.

The resolution passed with Houck and Puckett Daniels in favor and commissioner Liz Smith was absent.