Looking at what it takes to build affordably and efficiently

By Katherine Nettles

Affordable housing has had some ups and downs across the valley over the years, with new rental, ownership and deed restriction options coming online in small batches and larger projects on the horizon but major projects like the corner at Brush Creek that have not come to fruition.

The Gunnison Valley Regional Housing Authority (GVRHA) has started reaching out to local builders to get their honest feedback on what makes or breaks affordable housing projects as they move to create more opportunities for the local workforce to live where they work.

During the last GVRHA board meeting in September two experienced local builders, John Stock and Joel Wisian, called in to share their ideas. Both have contributed to successful affordable housing projects in the north valley. Both suggested that clear ideas, an understanding of architectural requirements and higher density will benefit affordable housing projects of the future.

John Stock owns and operates High Mountain Concepts with his wife, Karen, and also founded the non-profit Student Organization Achieving Results (SOAR) in coordination with Crested Butte Community School. Stock has completed several independent affordable housing projects with SOAR in both Crested Butte and in Crested Butte South, as well as projects for the free market.

Joel Wisian owns Bywater Development with his wife, Amy. He recently built the Paradise Park affordable housing development with 27 units near Rainbow Park in Crested Butte, and also builds homes on the free market.

The two builders offered their input on what to do differently to find more traction for affordable housing projects in the future, taking much from their personal experiences working with the town of Crested Butte. Many of their suggestions addressed making affordable housing projects less risky for private developers to invest in, so they get more interest and even competitive offers.

“The public/private partnership is the only way we will efficiently get affordable housing,” said Wisian of the concept.

GVRHA executive director Jennifer Kermode agrees. “They were very informative,” she said. “They came up with a lot of things that I think we can do, such as trying to pack as many of the entitlement fees into the back end of the transaction so that holding costs aren’t quite as expensive on the front end for builders.”

This includes tap fees, which can be very costly to a builder at the beginning of a project when the prospect of return on investment is still a long way away.

“One thing we want to look into is why tap fees are the same for smaller homes as for larger homes,” said Kermode.

Another idea was for homebuyers to pre-qualify for the units in advance of breaking ground. “And then when we do lotteries before construction starts, we have homes that are already under contract,” said Kermode. “That is very attractive to the lender, that they aren’t spec homes that may or may not sell.”

Wisian said that it is important to make sure all parties involved understand the architectural requirements for a project. He said the town didn’t have some things ironed out in advance of the Paradise Park project, and sometimes that held up that process. “Having everything planned up-front is very helpful,” agreed Kermode.

One example of this came up with sprinkler systems. The question of added costs from requiring sprinkler systems was a hurdle with the Paradise Park units and took up weeks in delays as the town council decided how to handle the additional expense. As Kermode reflected, “Obviously, it adds to the cost for the consumer, or in the case of Paradise Park, the town absorbed the cost.”

Scale and density are needed to make a project as affordable as possible, so larger projects with more units can be more cost effective, said the builders.

They advised that the most efficient method for building, despite other market trends, is stick built housing. “By the time you get pre-fab units here, they aren’t really any less expensive. And stick build allows us to use as much local labor as possible, which is another benefit,” says Kermode.

Last, both builders advised that the affordable housing interests have a well done, thought-out RFP [Request for Proposals]. “Frankly, that’s probably why Brush Creek went so sideways. Because the RFP really had no specificity… sometimes it’s beneficial to a developer to tell them exactly what you want,” said Kermode.

Kermode acknowledged that other input from the builders, while ideal, would be difficult to achieve.

“If [private investors] don’t have to pay the cost of the land and can build it into the project, that’s great,” she said. “That can be the case with the land being donated by each of the jurisdictions involved. But we are running out of those options. We need to find a way to start land banking for future projects,” she concluded.

Wisian said he felt the conversation was helpful. “I think the meeting was a great start to furthering discussion on how public/private partnerships can help continue to solve the affordable housing needs in our valley. I am excited to collaborate with the board in the future. My team is excited to get to build more affordable homes for our community,” he said.

“We found it really beneficial to have those two on the call, so we are going to start doing this quarterly,” said Kermode. Next quarter, likely in January, the board will hold discussions with some of the largest affordable housing developers in the state, including Gorman Development, which is finishing a project near Keystone Resort in Summit County.

The state is noticing Gunnison County

by Mark Reaman

The executive director of the Gunnison Valley Regional Housing Authority (GVRHA) has been tapped to contribute to two state working groups dealing with Colorado’s affordable housing issues.

Jennifer Kermode was appointed in August to the Strategic Housing Working Group, which falls under the Department of Local Affairs. Of the 50 people who applied to sit on that committee, 11 were chosen. Governor Jared Polis also selected Kermode to be part of a new 10-person Special Eviction Prevention Task Force.

“I am honored to be selected as a participant in both of these groups,” Kermode said this week. “I hope to add to the discussion. Gunnison County is getting noticed at the state level in the housing world so I can bring that perspective. We are alive, vibrant and engaged and that is being noticed. The state is watching us and working with us on a number of fronts.”

The goal of the Strategic Housing Working Group is to develop strategies to elevate, act on and maintain momentum for the creation and preservation of statewide affordable housing. The state is compiling millions of dollars earmarked for affordable housing that will be spent on projects across the state. Starting in July 2021, the state is anticipating funding that pool of money with approximately $77 million annually for at least three years.

Kermode said she and former Crested Butte community development director Michael Yerman saw the opportunity in the state money and had planned to stay aware and be active with the process. With this appointment, Kermode said the Gunnison Valley is positioned to be aware of how the money would be spent and how to take part in the granting process, especially for projects that are close to shovel-ready. “Being a member of that board, I will have more of a heads-up about how the state wants to direct the funding,” she noted.

As for the governor’s appointment of her to the Special Eviction Prevention Task Force, Kermode says she has first-hand experience helping tenants and being a landlord since the GVRHA runs many deed-restricted units throughout the valley, including complexes such as Anthracite Place in Crested Butte.

“Anthracite Place was a little tight at the beginning of the pandemic,” Kermode said. “But now the complex is full, which, as a landlord, is a good thing. This task force is in the very early stages so we don’t know what will come out of it. I hope we end up with suggestions that help both landlords and tenants. We just can’t tell people they don’t have to pay the landlords. There is pain on both sides.”

Kermode said that locally the GVRHA is working with tenants who are having trouble making the rent. “We are trying to not evict anyone right now for nonpayment of rent,” she said. “We are working with them as much as possible while at the same time realizing we need income from the units.”

The executive order issued by Polis states, “The task force shall develop recommendations on how to address housing instability due to COVID-19 in Colorado and report these recommendations to the Governor.” Kermode said she did not apply to be on the task force but rather got the call to service from the governor. “That task force is made up of a wide variety of people with different housing experience,” she explained. “I’m humbled to have been asked and am excited about sharing ideas with this diverse group.”

The task force will begin meeting in September.

Inclusionary zoning exemption change

By Kendra Walker

As affordable housing continues to be a high priority for Mt. Crested Butte, with recent initiatives including the voter-approved 2.9 percent excise lodging tax to help fund community housing projects, and the new affordable housing Homestead subdivision under construction this summer, Mt. Crested Butte has also been working to update its Community Housing Guidelines.

Town staff and the Town Council have been collaborating with housing consultant Willa Williford and Jennifer Kermode of the Gunnison Valley Regional Housing Authority over the past year to help update the guidelines. Last updated in 2009, a finalized draft will be reviewed by council on July 21 for consideration, with an accompanying public hearing. Mt. Crested Butte’s goal of the update is to more accurately align the language with the town code and make the document more user-friendly and easier to understand for developers, residents and town administrators.

While most changes are minor and intended to raise the quality standards of the community housing requirements for the town and the community, Mt. Crested Butte community development director Carlos Velado said there is one change to note.

A significant change to the community housing regulations is the removal of the inclusionary zoning fee exemption for the development of new single-family units on residential lots that were platted as of January 31, 2003. The proposed update would now apply the fee to all new residential development, but will exempt new single family homes less than 2,700 square feet (excluding the first 600 square feet of garage space).

Velado explained that the inclusionary zoning rate in town applies to all new residential developments, where 15 percent of the units must be affordable housing units. However, in the case of a single-family home, a payment in lieu fee can be applied instead, taking a 15 percent fractional cost from a formula based on the local affordability gap, which is updated annually based on the previous year’s real estate sales and calculated area median incomes (AMI).

“That’s no small fee,” said Velado. “Adding to the cost of a new build is significant.”

So with the proposed changes up for review on July 21, that 15 percent inclusionary zoning fee will apply only to all new single-family developments greater than 2,700 square feet, exempting any that are under 2,700 square feet. It would not apply to home additions or single-family homes in subdivisions where a community housing agreement is already in place, such as Prospect or Wildhorse.

The intention behind the new exemption, Velado said, is to prevent pricing out the more local homebuilders. “We ran some analysis of our permits for locals who have built homes here and the largest house size was 2,700 square feet. The thought process is to help allow locals who make a local working wage still be able to build a house without having that extra fee attached to it.”

Velado shared Mt. Crested Butte building data from 2015 to 2019; of 20 eligible new construction permits for single-family homes, 11 had an excess gross residential floor area of 2,700 square feet and would have been subject to the new proposed requirements.

Council will review the proposed community housing guideline changes on July 21, along with a public hearing for public feedback. The drafted changes can be viewed by contacting the Mt. Crested Butte Community Development Department at (970) 349-6632.

Forming citizen’s committee; Empty House Tax still an option

By Mark Reaman

The Crested Butte Town Council appears ready to form one or perhaps two committees at its next meeting on March 16 to study and then make recommendations on how best to fund the town’s ambitious five-year affordable housing and Climate Action Plan (CAP) goals.

The committee idea emerged from a work session on the topic held Monday, March 9 in which various “funding mechanisms,” including the concept of an Empty House Tax were bandied about by the council and about a dozen interested citizens.

While no one at the work session appeared to like the moniker Empty House Tax, according to town finance director Rob Zillioux, a $3,000 per unit Empty House Excise Tax on the estimated 350 potentially qualifying units in town could raise about $1 million annually.

Taking the town sales tax rate from the current 4.5 percent to 5 percent would generate about a half million dollars each year.

Increasing the Short Term Rental excise tax to 6 percent from 5 percent would bring in an additional $60,000.

Raising the property tax two more mills would bring in about $250,000 more each year.

Borrowing $2 million at 3 percent interest over 20 years would result in total payments of about $2.5 million but would take away from other capital uses.

Selling the town-owned building at 308 Third Street could perhaps bring in $2 million.

Zillioux presented a broad overview of the costs associated with the council’s goals for climate mitigation and affordable housing over the next five years. Each overall plan as outlined would cost millions of dollars and he said if new revenue streams were not implemented, council would have to make tough decisions on what to spend money on in town.

“If we are to achieve the council’s stated goals it will take a lot more money than is generated now to make them happen,” he said. “We have been eating into reserves for the last few years already.”

Zillioux’s recommendations to fund the council goals included prioritizing housing and climate mitigation spending over other capital fund uses; pressuring the Valley Housing Fund to invest a lot of its money in Crested Butte projects since the town contributed $1.5 million toward the Long Lake project that was the primary funder of the VHF; placing an Empty House Excise Tax on the 2020 ballot, which he described as the “fastest and cleanest way to generate significant capital” to invest in the CAP and affordable housing; and consider selling the 308 Third Street building.

“The problem with selling town property is that you are not likely to get it back and the town may need it in the future,” said council member Mallika Magner.

Zillioux said the idea of selling bonds to finance the projects was in his opinion the least “savory option,” given the interest payments included in repaying the debt. He said the town’s bond attorney, Dee Wisor, had told town officials that voters could choose to reallocate the current Real Estate Transfer Tax (RETT) revenue without changing the amount collected. No other municipality has taken that step and there is concern that would result in a lawsuit that could eliminate the entire RETT. The council shied away from that option by the end of the meeting.

Council member Mona Merrill said the information provided by Zillioux was very helpful. “But it is complicated, especially now when it looks like everything might be going into a recession. That impacts so many things so it will be an ongoing discussion. It would be nice to have consistent funding for these projects but what it is, I don’t really know at the moment,” she said.

“As it stands I don’t like the Empty House Tax,” said council member Laura Mitchell. “I’d also ask the Valley Housing Fund to look in Crested Butte. I don’t want to drive a wedge in the community and feel the Empty House Tax does that. It damages the relationships we have in the community.”

Magner said she didn’t want to hurt local businesses or local middle class residents by raising property taxes. “I also value highly the open space around the valley and what the RETT has given us,” she said.

Council member Candice Bradley’s first impression was to lean toward expanding the RETT uses or selling 308 but later confirmed she was in favor of the Empty House Tax concept, while council member Chris Haver wanted a list of pros and cons for each suggestion but was adamantly against the Empty House Tax as presented.

“Not much has changed for me,” said councilman Will Dujardin. “We have committed to our constituents to do certain things and we have to pay for them. I think we need more reaching out for the Empty House Tax and get the details out there to people about what we are looking at. We have a huge mountain to climb and we need to get going on it. The longer we wait because we don’t want to hurt anyone’s feelings, the harder it will be.”

“I’ve always had a problem with the Empty House Tax,” countered mayor Jim Schmidt. “It’s a regressive tax. It affects an old timer with a house a lot differently than someone with a grandiose house they just bought for millions. That idea is driving a wedge in the community. I feel a property tax could pass in town and have a good start at funding some of these things. I agree that selling 308 isn’t good since the town might need it in the future and lots of good groups are using it now. I look at raising the property tax a bit or raising sales tax a half cent as reasonable.”

Peter Dea of the Crested Butte Land Trust lands committee said reallocating money away from the RETT that is a primary funder of open space projects would be a mistake. “The land and trails near town purchased with that money are so special to so many people,” he pointed out.

John Spencer who, with his wife, Haden, splits time between Crested Butte and Texas, said he raised an eyebrow at how some of the numbers presented by Zillioux were presented. He indicated they painted a skewed picture of how to pay for housing and climate goals. He also counseled the town to be aware of language used and how that rankled some in the community. “Describing all the impacted homes as ‘trophy second and third homes’ as is done in this presentation is not helpful,” he said.

“But it’s factual,” responded Zillioux.

“My home is not a trophy home by any stretch,” said Spencer. “There are a ton of unanswered questions so there needs to be a sober discussion about this Empty House Tax idea.”

Retired town planner John Hess said he has seen his property taxes increase $1,000 over the last several years, and that impacts his fixed income. “If you are talking about climate mitigation projects think about taxing things that contribute to it like gasoline or tires for cars,” he suggested. “Adjust the ROAH [Resident Occupied Affordable Housing] impact fees so that it charges more than the current 30 percent of the housing impact. And even the Crested Butte Land Trust started out slow so start now and form a group with a board that would be a place for people to choose to donate money toward climate projects. Instead of taxing people, give them opportunity to donate money.”

“I am super concerned with the Empty House Tax,” said Haden Spencer. “Think about tapping into the people who have had their eyes opened through this discussion. We’re all in this together. We all are part of a community we care about. Start a real dialogue that is richer, deeper and more creative to find solutions from different perspectives.”

CBLT executive director Noel Durant pointed out the Long Lake land swap deal just closed and that was a “good example of innovative ways to address various issues.”

Tiff Simpson, who recently moved into deed-restricted housing in Paradise Park, said if not for the town’s affordable housing program she wouldn’t be in town. “I hate the Empty House Tax label. It’s not very positive but I’m for it,” she said. “The question is, is the town going to bat for people looking for a first home? These people are privileged enough to have a second home. Keep the workers that live here in the forefront of your mind. Put it on the ballot and trust the people of town to decide this for you.”

“Find other creative solutions,” countered Allison Butcher. “I’ve raised a heck of a lot of money in this town and see the generosity of both locals and second homeowners. Right now there is no effort or place for people to make tax-deductible donations for these projects. Start a campaign. People care deeply about this place. Instead of a tax, give people an opportunity to donate.”

Jim Starr, who chairs the Valley Housing Fund but was speaking as a private citizen, said the town could adjust the housing payment in lieu fees or impose recreational user fees on people living outside of town who use Crested Butte’s parks and playing fields. He said selling town buildings was a bad idea in the long run and, given current low interest rates, the council should look closer at bonding potential. “If you can get it for 1 percent interest it is probably worth it,” he said.

John Spencer said selling bonds could be an avenue for second homeowner participation, as they might be more than willing to buy the bonds for a good cause.

Starr also suggested the formation of a committee to delve into all the potential funding mechanisms and come up with finite details. “Include second homeowners to look at the need and the numbers. Have a committee work together like it did with the Short Term Rental tax and come to council with a recommendation of what is appropriate and something that doesn’t divide the community.”

Starr said the VHF was open to expanding its duties and providing a venue for donations for affordable housing. “But it helps to have a specific project when raising money,” he said.

“There are five projects listed for future housing as part of our goals. If there were other ways to do this other than the Empty House Tax we’d be thinking of them already,” said Dujardin. “We already have one of the highest sales taxes around. That’s why we’re here now. If second homeowners say they’ll donate to affordable housing, they can go to the Valley Housing Fund and do it. I say let’s see it.”

“I’m hungry to know more about the projects,” said Haden Spencer. “Until this Empty House Tax discussion came out in the paper people didn’t know about it and the complexity. I think there is a sincere desire to participate but people want to understand it.

“It seems the idea of committee to delve into details has a lot of potential,” said Merrill.

”I still think we need the pros and cons detailed for each mechanism,” said council member Chris Haver. “As presented, I’m not in favor of the Empty House Tax. It feels like we’re just asking someone else to pay for what we want. It should be broader. If it is important to people, they’ll vote for it.”

“We are in such a hole with our diminishing locals,” said Dujardin. “I’m just trying to look out for our one square mile. It seems the only way for workers to get in here is through our deed-restricted housing. I’m banging my head against the wall. Maybe we need to tweak the Empty House Tax idea to find the fair number and who it applies to. It will take a lot of work so I think we should get going with a committee even if it takes longer than this election cycle. But we know the reasons and the need. I agree with Tiff and think we can put it to the voters and let them decide.”

“There have been some great ideas discussed tonight,” concluded Peter Dea. “Let them be vetted. Let them mature a bit as opposed to putting a divisive ballot issue to the voters this fall.”

Haver said he liked the idea of forming two committees: One to work on affordable housing and one to work on the Climate Action Plan and ways to fund those projects. “I don’t think we’ll find one silver bullet to pay for both,” he said.

Schmidt asked that the consideration of forming a committee, or committees, to deal with the topics be placed on the agenda for the March 16 meeting.

Board chair promises work toward better communications a priority

by Mark Reaman

Crested Butte Town Council members asked their representatives to the Gunnison Valley Regional Housing Authority (GVRHA) to send a message to the organization that they would prefer a lighter touch used when enforcing rules and regulations with tenants in affordable housing. 

The GVRHA was recently in the process of conducting an “early termination of a lease” with a tenant in Anthracite Place and as word spread of the situation it caused some local concern. GVRHA executive director Jennifer Kermode said that action is very different from an eviction and the administration had “arranged a hearing for the tenant with our grievance committee.” 

That hour-long hearing was held Wednesday, February 26 and the GVRHA grievance committee decided to allow the tenant to complete her one-year lease instead of having her leave in early March. She will now be allowed to stay through April 22 as long as there are no more lease violations and rent is kept up to date.

General issues of communication between management and tenants were brought up during the hearing. New GVRHA board chairman Roland Mason who sat on the grievance committee said, “The board has heard the complaints and wants to work on the communication piece. Anthracite Place is a first for our community and we are still working on what we can do to make it effective. We support our staff but we want to make it comfortable and secure for the people living there,” he said. “It is still a work in progress.”

The GVRHA just completed dealing with the eviction of a family from an apartment in Stallion Park managed by the GVRHA for not paying rent. That situation was going through the county court system and a settlement was reached Monday. Kermode said bad news comes in threes and indicated this week that, “We will have one more eviction coming up for a tenant that has failed to pay rent, amongst other violations that cannot be overlooked.” That situation has a court date scheduled for March 5.

While trying to protect the privacy of the residents in question, the town council asked its representatives to the housing board, mayor Jim Schmidt and councilman Chris Haver, to convey the council’s discomfort with the GVRHA’s perceived heavy-handedness when it comes to dealing with violations of the regulations imposed on the deed-restricted facilities.

“I’m not comfortable with the current situation with the Housing Authority and a resident and how it is going down,” said councilman Will Dujardin at the February 18 meeting. 

“I am glad you brought that up,” agreed councilwoman Laura Mitchell. “It’s not the first time or the first person to have a run-in with the Housing Authority administration. The optics out there are very poor and we need to talk about it in more depth.”

“I respect the rules and regulations but the question is, is there a more gentle and kindly way to enforce the rules,” said councilwoman Mallika Magner. She used an example of the council asking the Crested Butte marshals several years ago to enforce the rules on the books but in a more relaxed Crested Butte manner. That quieted some community grousing about the marshal’s department at the time.

“The reason the Housing Authority is there is to house our people and some are more vulnerable than others,” Magner added. “Is there a way to give more leeway to make it an easier place for people to live?”

“I am on the board and these situations are always difficult,” said Schmidt. “Only part of the story is out there in the public. The Housing Authority has to protect the privacy of its residents so can’t respond to public perception. But we can take the message back to the entire board. It is my understanding that this is the first time this sort of situation has come up. We can go back and talk about how things are done in the future. It is appropriate feedback to give the board. I’m not sure why this latest situation didn’t go to an appeal (in a more timely manner). A previous appeal of a lease not being renewed resulted in the resident still being there.” 

“It doesn’t feel like we’re on the right side if we evict this person from the property,” said Dujardin. “It seems unnecessary. It feels like it got personal between the management and the resident and violations were tacked on as a result. It shouldn’t be going this way. It would feel better if there were something like a grievance committee to review these issues instead of depending on the executive director and the management.”

“It’s embarrassing,” said Mitchell.

“It’s more than optics,” added Magner.

“It is hard to discuss in public,” said Schmidt. “We heard a very, very different side of the story.”

“But we will take these comments back to the board,” assured Haver. 

Mason emphasized Wednesday that the board wants to be more involved with such situations as they occur as opposed to after there is a blow-up. “We all live in this community and we all know each other,” he said. “We all want this affordable housing to work.”

Yerman advocates for InDeed program

By Mark Reaman

Outgoing Crested Butte community development director Michael Yerman presented his final ”Five Year Affordable Housing Plan” to the Town Council on January 21 and said there were three primary avenues worth pursuing in earnest.

“I would say the town has done an amazing job of looking at everything possible over the last several years and had good success,” Yerman told the council. “When talking to people around the state, they see one of our biggest successes with our zoning that encourages workforce housing in the commercial zone. We have built 65 deed-restricted units in town since 2016 and 47 are scheduled to be completed in 2020, including 21 rentals.”

For the future he advocated most strongly for the town to focus on a so-called “Green InDeed” program that would pay homeowners to put a relatively loose deed restriction on their homes. He also laid out the case for the council to try to find a regular funding source for housing that could bring in $255,000 annually to comfortably pay for future housing projects.

Yerman said there were three primary projects on the horizon that had different ramifications for budget and timelines. The InDeed program, the Slate River annexation and Phase 3 of Paradise Park topped his list.

The Green InDeed program was one that Yerman felt could be implemented quickly and over time would make a big difference in town. Basically the town would pay a homeowner 10 percent to 15 percent of the appraised values of the unit and in exchange the owner would agree to a deed restriction that called for the unit being either owner-occupied or long-term rented. There would be no income restrictions or work requirements involved. Yerman made it clear that every additional requirement imposed on a house would mean the cost of the deed restriction would be more expensive.

“If the town can do three of these a year it would add up significantly over time and keep people living in town,” he explained. “The time to do it is when a house is worth $1.2 million and not $4.2 million.”

Yerman suggested that the town could sell one of its affordable lots in Paradise Park with a similar deed restriction to what would be imposed in the InDeed program. He guessed that it could bring in $450,000 to $600,000 and that could be the seed money for the deed restriction purchase program. Lot 5 on Block 80 has some soil issues that he said the town would rather not deal with but could make for a sweet lot for a local with some money.

The Slate River Annexation project would be the biggest and most expensive of the potential projects. Using 60 units as an example of what could be built on the property, Yerman said such a project would cost between $14 million and $18 million and be “a very big project for the valley.”

He said that site would include some extra expenses such as cleaning up the old landfill buried on a portion of the affordable housing parcel. He foresaw it taking four years from start to finish, with lots of public outreach and a private-public partnership needed to make it feasible.

The third phase of the Paradise Park subdivision would ultimately result in between nine and 12 deed-restricted units between three duplex lots and two triplex lots, one of which is owned by the county. Yerman said the template, like one used with John Stock’s High Mountain Concepts where the town retains ownership of the land and Stock builds the units would work best. The units would then be sold or rented and could go to local businesses or local families.

“The Slate River annexation project is pricey,” Yerman said. “The InDeed program chips away at the problem and makes a big dent over time. It could help existing locals stay in town and I’ve had people approach me with interest in participating. It isn’t necessarily for workforce housing like the pizza maker but it would add to locals living year-round in town.”

Mayor Jim Schmidt expressed some concern about what qualifications would be associated with the deed restrictions purchased by the town. He mentioned the idea of rent control and tying workers to living in the property. He wondered if that would be the best use of housing money compared to building workforce housing units.

“Remember that the town is about 90 percent built out already,” said Yerman. “The more restrictions you put on, the more expensive it will be to buy the deed restrictions. This probably lets you deed-restrict three units for the price it costs to build one from the ground up.”

“It’s part of the affordable housing toolbox,” said councilman Will Dujardin.

Yerman noted the affordable housing toolbox isn’t filled with cheap tools. “If you can generate an extra $250,000 per year it would really help allow these projects over the next five years and well into the future. Otherwise, the projects will be competing against other capital needs within the town. That will bring up some tough budget decisions and could impact other priorities like the Climate Action Plan or upgrading of the skate park. Asking voters for $250,000 seems a reasonable ask of the citizens.”

Without going into any specific proposal, Yerman said an excise tax, an increase in sales tax or a mill levy increase could be the way to generate the needed funds.

The council is actively considering a vacant home tax but was open to looking at all alternatives for funding.

North Village, Slate River Annexation, and needs assessment in the works

By Kendra Walker

Representatives of Mt. Crested Butte, Crested Butte, the Gunnison Valley Housing Fund, the Gunnison Valley Regional Housing Authority (GVRHA) and the Board of County Commissions (BOCC) huddled together on January 9 to discuss coordination opportunities for potential affordable housing projects taking shape in the north end of the valley. Additional folks in attendance represented the North Village, the Rocky Mountain Biological Laboratory (RMBL) and Crested Butte Mountain Resort (CBMR).

The group discussed the North Village parcel, the Slate River Annexation and possible funding opportunities for those projects and future affordable housing projects. The committee plans to hold these meetings every other month and will meet next on February 27 at 3 p.m. in the Mt. Crested Butte council chambers.

North Village collaboration

Mt. Crested Butte is collaborating with North Village Associates, LLC and RMBL to explore a partnership in the development of the North Village parcel.

Town will spend the next four months in a due diligence period determining their goals, needs and wants for how to incorporate the 17 acres they own that’s included in the parcel. If they wish to proceed with the partnership, town will work with owners the Alvarez family and RMBL to put together a Planned Unit Development (PUD) that best fits all parties’ objectives for the site plan.

Housing, especially rental housing, has been listed as a top priority for the Mt. Crested Butte Town Council. With RMBL as one of the partners, there is also a desire for seasonal employee housing built into the PUD. Representatives from RMBL and CBMR mentioned possibly joining forces on seasonal housing, with RMBL solving their housing need during their summer programming months and Vail serving their housing needs during the winter months.

Town also plans to hold a series of open houses to invite community involvement and feedback over the next several months prior to a PUD application. “The hope is that the application process is more streamlined,” said Mt. Crested Butte community development director Carlos Velado. “We’ll spend more time on the front end with the community in the hopes that it shortens that procedure.”

North Village project manager Crockett Farnell emphasized the importance of funding opportunities. “A lot of funding avenues are things only the town could apply for and a private developer couldn’t go for,” he said. “There are tools to do it and it takes time to do it right.”

Assuming the partners are able to get the funding mechanisms needed, “We’ll ideally get a PUD application somewhere over the course of this summer through sometime this next year…” said Farnell, “…and potentially come out of ground as early as next summer.”

Town plans to continue open communication about North Village developments with the housing committee as they develop.

Slate River Annexation

The Crested Butte Town Council has agreed to stand behind affordable housing in the North Village and collaborate with Mt. Crested Butte to avoid moving on two major projects at the same time. Their next project in the works to fit somewhere in-between or behind North Village is the Slate River Annexation property north of town.

The town held a public hearing and approved the Slate River Annexation Preliminary Plan on January 14, which will ultimately give town ownership of nine out of 10 parcels being annexed, with a possible two acres dedicated for affordable housing. The applicant will draft an agreement that permits recreational use along the Slate River where it passes property, and town staff will draft a deed restriction prohibiting development in perpetuity for the wetlands area that lies between Gothic Road and the Slate River. Council will hold a public hearing for the final plan on April 6.

“Between now and April the first thing is to subdivide the land,” said Crested Butte community development director Michael Yerman. “We’ll get the entitlements to the land and start planning any more beyond zoning.”

Yerman also said the town could start as early as June to begin community discussions with what to incorporate on the sites. “There’s a lot more to that site than just the rental project,” he said, speaking to possible elements to the area to include housing, a new firehouse, a hospital clinic, a sledding hill and parking.

Funding and needs assessment

Regarding the North Village timeline, affordable housing consultant Willa Williford brought up Colorado Housing and Finance Authority’s 9 Percent Tax Credit Loan Program, a tax credit used to finance construction of low-income affordable rental housing. It comes available every February, she said, so “February 2021 is a really good time for us to be putting our sights on.”

Williford also filled the group in on a recent call with the State Division of Housing as being “fairly anti-climatic.” “They have this infusion of money that will ramp up over the next three years,” she said. “But they have not realized any guidelines—no funding deadlines, nothing.”

“That made us realize we need to step back,” said Jennifer Kermode, executive director of the GVRHA. “It may be a while before any information comes back from the Division of Housing about any kind of parameters they might start thinking about for that money.”

“We shouldn’t have it drive all our planning,” concluded Williford.

“To me it’s concerning when you start talking about bigger projects… 30, 40, 50 units,” said county commissioner Roland Mason. “A lot of that money is still going to have to come from LIHTC [Low Income Housing Tax Credits]. Would they even fund another one?”

He alluded to the sometimes quarrelsome procedure with the Corner at Brush Creek development, saying, “When you look at the Brush Creek process and Mt. Crested Butte is negotiating with North Village, there is going to be some kind of give and take there and I’m worried where you guys are going to draw that line. Is it going to be because of two parking spaces just because you can’t deal with it or is the financial piece so good and you can’t fund it locally to make the project work?”

“What does a project developer need to do a project?” asked Crested Butte mayor Jim Schmidt to the project developers in the room.

“Financial feasibility,” answered Farnell. “That’s all there is to it.”

Yerman brought up the power of smaller projects in the works or already under way, like Mt. Crested Butte’s 22-unit Homestead development, Paradise Park Phase 2 and the upcoming application for a mobile home cluster at 114 Butte Avenue.

“While the big projects make the big impact numbers, these small steady projects tend to make an impact as well,” said Yerman. “Those smaller projects have the ability to make those dents… and chip away while we wait for a larger project like North Village to come online.”

The housing authority is also planning on updating their 2016 needs assessment in order to better determine what the Gunnison Valley community can afford to purchase and rent.

“When I see projects not perform it’s because of a mismatch in what people can afford,” said Williford. “We get too ambitious in what they can afford.”

“We really need an update on the demand side,” said Jennifer Kermode. “Having a grasp on that demand side is going to be really critical.” She told the committee that she hopes to have the scope of work for an updated needs assessment survey done by the end of February and then put out an RFP. Williford, who co-authored the 2016 assessment, said the update could then take about a month.

“Because we’re both on the same trajectory,” said Yerman of both towns’ housing projects, “by this summer I would really like to see the demand being tackled. As we continue to plan around all this, that is a critical missing piece.”

The North Valley Housing Committee will meet again on February 27.

Issues, but opportunity

by Mark Reaman

Former council member and regular Crested Butte Town Council meeting attendee Kent Cowherd presented the council with some ideas for in-fill affordable housing at the January 6 meeting. He cited a dozen locations in town where small affordable housing units could perhaps be squeezed into existing neighborhoods. Some were on property identified as being zoned “Public,” while others were on lots used for snow storage or in wetlands. Other potential locations were on existing affordable housing lots, but Cowherd said smaller units could turn a place where a tri-plex was planned into a place where four or five or six units could be built.

Cowherd emphasized that units would be small—between 350 and 400 square feet. He said more units could be built if the town also revised its parking regulations to lower the number of parking spaces required for each unit. Locations ranged from the batting cage area near Gothic Field to several areas in the Paradise Park subdivision to near the Tommy V. Field bathrooms, the gravel pit south of the Crested Butte Community School and the spot between the town tennis courts and Pitsker Field near the Four-way Stop.

“These ideas are meant to be a starting point for discussion,” he said. “These are areas where housing has been previously overlooked or dismissed. They are all difficult sites with some challenges to work through. But the ideas are discussion points of where to maximize opportunity for more housing within the town boundaries.”

“Anything is possible but some of these sites would require some drastic changes to our snow management plan,” commented town public works director Shea Earley.

Town manager Dara MacDonald said some of the suggestions were viable and others presented challenges. “A lot of the parcels are being used for other purposes,” she told the council. “As for a minimum size, no one has built under 400 square feet even on the micro lots. Parking will always be a conversation. People in affordable housing don’t necessarily have fewer cars. But overall, it is a useful list to evaluate.”

Cowherd’s proposal indicated that an additional 41 to 66 units could be built on the sites, depending on parking and size limitations.

“Let’s get Michael [Yerman] to look at it all and see what he comes up with,” suggested council member Laura Mitchell.

“We want to provide six affordable units to six citizens of your community”

By Kendra Walker

The Crested Butte Town Council and Gunnison Valley Housing Fund (VHF) have agreed to start the joint application process for a six-unit mobile home cluster located at 114 Butte Avenue on the Paul Redden property.

Council and the VHF hosted a special meeting on December 9 to discuss the project, which would place six 500-square-foot one-bedroom mobile homes on the Butte Avenue site, offered as rentals to locals. Council voted the project forward, and it will go through a formal public Board of Zoning and Architectural Review (BOZAR) process.

The property is currently under contract with the VHF, which would hold ownership over all six units, determine renters and manage the property. According to VHF executive director Darin Higgins, this is one of the first projects that the VHF would own and manage. “The housing fund mission is to provide affordable units. This allows us to be directly involved and we can actually do it ourselves,” he said.

Town has not yet decided on a financial commitment, but is prepared to make up to a $170,000 contribution including tap fees and fee waivers. The Mountain Express may give an additional contribution. Town and MTX would most likely take half of the units for employees.

According to Higgins, the rentals would target the 60 percent area median income (AMI) population, with the rental price estimated at $600 to $800 a month. “The town has done a great job of meeting the needs of the ‘for sale’ affordable housing,” Higgins said. “We’re trying to fit another need with this rental project. We don’t get opportunities to serve this [need] at this price.”

Town community development director Michael Yerman confirmed that the proposed site plan meets zoning standards, providing the necessary snow storage and two parking spaces per unit, which is required for the mobile home park. Each mobile home would be 14 feet wide and 34 feet long.

“Since the town is looking at contributing to the project and obtaining a unit, we wanted to ensure that the Town Council heard from the neighborhood before we initiate a formal process,” said Yerman. He also reiterated the benefits of this development being a town housing project, which allows for more flexibility and community input, rather than if a free market developer purchased it.

Neighbors were notified about the special meeting with a five-unit proposal, but Higgins clarified this was because the VHF wanted to get notification out to everyone as early as possible and at that time the manufacturer had only 16-foot-wide units. This would allow for only a five-unit configuration.

The housing fund later found a different manufacturer with 14-foot-wide units, allowing for an additional unit to fit. According to Higgins, this six-unit plan is still less dense than if a free market developer put in three larger trailers of two to three bedrooms each, and will help alleviate costs for maintenance and snow removal.

“We want to be your neighbors in this project. We want to be actively involved in making sure we meet your needs. But the bottom line is the math and we have to break even,” said Higgins.

He explained further, “One bedroom is really where the need is in the community. As the ‘owner/landlord’ we’re not going to overload it. We want to provide six affordable units to six citizens of your community. We really want to try to make this fit this community.”

Many members of the community attended the meeting to hear the plan and contribute their input. Neighbors expressed some concerns, especially with the change from five to six units, but most warmed up to the project as the discussion progressed.

Neighbors were especially concerned about parking, wondering if future tenants would park their trailers, boats, snowmobiles, etc. in the designated parking spots and then park their cars on the already heavily parked street.

“We can handle that a little bit with the lease agreements,” replied Higgins. “That can be an ongoing conversation with neighbors’ input. We can handle that on a flexible basis.”

“I like the idea that there’s a property management company that will come take care of snow removal. I love the idea that it’s going to be managed by the housing fund, so some of my concerns are alleviated,” said resident Robin Cash.

Longtime mobile home resident Clifton Garland added his concerns about the snow removal and the safety hazards of snowmelt falling in between the buildings. “The safety for a unit setup like this is not very good. There are people out shoveling walkways getting buried. You really have not worked in what the actual maintenance money will be, because that will be astronomical,” he said.

“I’m going to expect a good strong solid snow removal budget on this project,” said councilman Chris Haver later on in the meeting.

“I appreciate the whole neighborhood coming together tonight. It’s the locals’ neighborhood, one of the few areas that’s all local—that’s very rare anymore in this town,” said resident Jane Martin. “My concern is, it sounds like half the spaces are already committed to people. Who has access to these units?”

Higgins said they would most likely use a similar process as with Anthracite Place, where tenants would qualify based on income but with more flexibility. “We have the freedom to say this person makes 62 percent AMI, but they’re not excluded,” said Yerman. “It would be like any other rental property, open to anyone who applies.”

“This is a deal where there’s an arrangement between the town and the housing foundation to make something work and manage it to success,” said resident Skip Berkshire. “To me this is a no brainer.”

“I think it’s a beautiful idea. I can’t tell you how excited I am about this,” said resident Cath Sherrer. “My life changed on a dime when I was lucky enough to get into that trailer park. I know that these problems can be worked out. I like this idea because it’s simple, it’s affordable and it can be easily implemented.”

“If the town has an opportunity to create some local workforce housing within the existing neighborhoods you should try to get it done,” said Bob Gillie. “And you can try to work out the details later but this community is suffering.”

The majority of council felt comfortable proceeding with the project. Mayor Jim Schmidt was the single council vote against, preferring that the project go back to the five-unit plan with more storage or target a different AMI percentage to drop the number of units while still meeting the budget.

Higgins clarified that the trailers do have a certain amount of storage under the units, and his intent is to communicate with the fire district and see about storage options on the ends of the units as well.

“We have a public entity that cares about our workforce and is going to make sure it stays in good repair for our workforce,” said council member Mallika Magner. “I would like to see two parking spaces per unit. I would like to see the storage. And I think it’s a great idea.”

“This is an easy decision for me to get the project going,” said council member Will Dujardin. “But I’m not that comfortable with us reserving half of the units for government entities. It’s not just our government employees that need employee housing. Our constituents are suffering. Every day we don’t take decisive action we’re contributing to the slow death of the culture and community of this town.”

Agreeing to start the joint application process, council will consider their financial commitment at a later date.

North Valley ready to strategize for future affordable housing

By Mark Reaman

An updated Needs Assessment Survey for affordable housing in the county indicates significant progress has been made in the north valley in terms of affordable home ownership opportunity, while the rental market could use some more attention. The biggest problem is with low-income renters looking for places to live.

A newly formed north valley housing subcommittee will meet Friday to go over the data and begin formulating a plan on how to proceed with developing new affordable housing units. A public meeting to discuss that eventual plan will likely be held in early January.

“Since 2016, there has been great progress on housing throughout the valley,” noted housing consultant Willa Williford of Williford LLC who compiled the updated numbers. “I see this as a result of all four jurisdictions really taking the issue to heart, as well as the private sector stepping up to meet the need. There is still plenty of work to do, and affordable rental housing should be the next focus for the north end of the valley.”

The updated needs assessment was paid for by the Rocky Mountain Biological Laboratory, which is working in collaboration with the developer of a possible North Village subdivision that will include affordable housing, in conjunction with the town of Mt. Crested Butte.

“RMBL is working in partnership with the owners of the North Village site with the goal of expanding RMBL programs into Mt. Crested Butte. An important part of RMBL’s plans is employee housing,” explained RMBL executive director Ian Billick. “One of the main impediments for creating housing on North Village is the lack of infrastructure. If Mt. Crested Butte and community partners decide that North Village is an appropriate location to address larger needs, we will all benefit from doing this together. We also see funding housing planning as a way to demonstrate our commitment to the Alvarez family, and the local community.”

Williford, who has worked on affordable housing throughout the county, said “the challenges of housing our workforce will likely continue to grow and evolve as our local economy grows and diversifies. I believe the Gunnison Valley Regional Housing Authority will be seeking to do some updated projections to look beyond 2020 in the coming year.”

Her latest numbers show that compared to 2016 when the last Needs Assessment was done, total ownership need in the north valley is now at about 11 homes, compared to 189 in 2016. She said that number is slightly misleading due to the fact there are 35 free market houses priced at more than $430,000 for sale in the area. So she clarified that the actual “workforce housing” need for ownership in the north valley is probably closer to 46 units. The updated ownership figure includes the planned Homestead development in Mt. Crested Butte that is slated to break ground this coming spring.

As for the north valley rental need, it has dropped to 111 units in 2019. That number is down from 171 calculated in 2016. Most of the need is at the lower income levels.

Crested Butte community development director Michael Yerman agreed that the lower income ownership and rental units are always the most needed but the new subcommittee group will discuss ideas on how to address that need in the future.

“The town has done a great job putting long-term locals into home ownership opportunities over the last couple of years,” Yerman said. “There is a great opportunity with the upcoming Colorado Department of Local Affairs [DOLA] funding that is being discussed to put a good dent in the low-income rental category. To do that up here and throughout the county will take the collaboration of all the government entities and that is why we are getting together to talk strategy.”

That meeting will take place Friday in Mt. Crested Butte.