The Crested Butte News Serving the Gunnison Valley since 1999
Rents aren’t looking cheap at the moment
By Mark Reaman
It appears agreement could be close on some issues between the town of Crested Butte and Gunnison County about how to partner on a water and sewer utility extension from town to the proposed Whetstone affordable housing project a couple miles south of town.
A Whetstone Working Group has met over the last month to find common ground on the project challenges and the members will bring their ideas to the rest of the entities and the public at a work session scheduled for Monday, June 24. Officials will go over potential details on how to give enough confidence to town for them to issue a so-called “will serve” letter promising the utility extension based on certain conditions, and discussion will also be held to see if the town can make some form of financial contribution to make the project more affordable. It appears the two entities have agreed to frame the project and its various elements as a whole, instead of carving out development items associated with the project such as the roundabout and tap fees.
Based on the informational packet for the meeting, the cost of rents is a major issue. The county has requested funding assistance from the town to reduce the projected average rents and AMI (Area Median Income) for households served by the project. Of the proposed 252 units, 80% will have a workforce requirement or income restrictions. The other 20% are expected to be free market.
According to the memo to the council from town manager Dara MacDonald, “With current cost estimates, the cost to build the project (including the roundabout and underpass) is approximately $146 million and the average rent would be affordable to households earning 130% of area median income (AMI). This equates to an average two-bedroom unit renting for $3,006, including utilities. The County is concerned that the rents are getting higher than their policy goals and the community’s expectation for affordability.”
According to the memo, one identified area of cost savings that could potentially reduce rents could come from the town financing or reducing tap fees to tie into the Town’s water and sewer utility. The current tap fees for Whetstone to connect to the Town’s system would be $7.5 million.
The town has subsidized tap fees in the past for affordable housing projects by taking money from its general fund and covering the entire tap fee. Tap fees are collected to finance future projects to serve growth and replace infrastructure in the future. “Tap fees serve to mitigate inequities between new and existing customers by requiring ‘growth to pay its own way’ rather than adding burden to existing customers,” MacDonald explained to the council in her meeting memo.
While the Council appears to have no interest in completely waiving the tap fees, they are apparently open to hearing options on how the town can help rein in rents.
If the town (or any other entity) could somehow be responsible for $7.5 million of the project, either through tap fees or perhaps funding that much of the roundabout, rent and utilities on the two-bedroom unit would go from $3,006 a month to $2,843.
There will be no shortage of discussion Monday. The work session starts at 6 p.m. and the council is interested to hear from the public on what the town’s role should be in the project.
