The Crested Butte News Serving the Gunnison Valley since 1999
Can rent calculations be calculated on net income?
By Mark Reaman
Crested Butte, along with other resort communities in Colorado, have started preliminary investigations on how to adjust what is known as the Area Median Income (AMI) frequently used to determine eligibility and rent for affordable housing projects.
The issue came up at the public comment section of the Crested Butte council’s October 21 meeting. Citizen Evelyn LaMorgese addressed the council over the issue.
“I am concerned with using the AMI in the area because the information skews the data,” she said. “Under the local AMI, 100% of the Area Median Income means the average worker is making $72,000 a year. Personally, that seems skewed by counting people like remote workers. The average worker here isn’t making $72,000. And using that number translates to charging higher rents since it is determined by saying a person can contribute 30% of their gross income to rent.”
LaMorgese said that Gunnison County is home to a number of people living below the poverty line as well as “people who are making more money than they know what to do with…As a whole, Gunnison County’s AMI gets pushed up by a large population of remote workers and retirees as well,” she said.
LaMorgese suggested that perhaps the town could eliminate some of the “outlier incomes” that skewed the AMI numbers “and focus on the working community.”
At the end of the council meeting, the council returned to the topic. “Evelyn’s concern with the AMI was compelling,” said councilmember Kent Cowherd. “Is there something we can do?”
“Right now, some of our funding ability for projects come with some AMI restrictions,” said town manager Dara MacDonald. “But it is a topic of conversation with other resort communities. We are trying to figure out the methodology to take that into consideration. It is a legitimate concern and we aren’t the only ones seeing it, but right now some funding sources require AMIs.”
“It is a very interesting point,” agreed mayor Ian Billick. “It would be great to buy down the AMIs and thus the rents on projects like Whetstone for example.”
“I think there is room to recalculate AMIs and rent using 30% of net income instead of gross income,” said councilmember Beth Goldstone. “That 30% number seems to have been set in a different era. Charging 30% of gross income for rent is a challenge. 30% of net is more reasonable.”
“I would be comfortable if the policy could be adjusted, but I’d be more comfortable if it was a general policy to adjust the 30% to net instead of gross if it applied everywhere and not just to town policy,” said Billick.
MacDonald said she would keep the council apprised of future movement in that realm at the state level.
