“I don’t know if it is the best solution, but I was not voted emperor”

By Kristy Acuff

After discussing the ongoing affordable housing shortage, and hearing heated opposition from those attending the Board of County Commissioners meeting, commissioners voted to approve the request by the Gunnison Valley Regional Housing Authority (GVRHA) to put a property tax increase on the ballot this fall, with the money slated for affordable housing in the county. Commissioners made it clear, however, that they were only supporting the request to put the measure on the ballot, and not necessarily supporting the property tax increase.

“Personally, I do not believe the property tax funding approach is the best approach, but I am not emperor and I have no problem leaving it up to the voters to decide if they want to tax themselves to support affordable housing,” said commissioner John Messner.

GVRHA hopes county voters will approve the property tax increase of 1.5 mils for a period of 10 years. The result would be an increase of $10.80 for every $100,000 of residential property valuation and $43.50 for every $100,000 of commercial property. After 10 years, the mil rate would decrease to 0.5.

“We expect to generate nearly $900,000, which we can leverage two to three times with other funding sources throughout the state,” said GVRHA executive director Jennifer Kermode. “This will give us the annual revenue needed to sustain and expand housing projects.”

The expected $880,000 of annual revenue for a decade would be dedicated to construction, maintenance, managing and operating affordable housing projects throughout the valley.

According to Kermode, the current budget for the GVRHA is $370,775, with $248,750 coming from member contributions and the remainder from property management services and other administrative programs run by the organization.

GVRHA has a pipeline of potential sites for housing projects in all areas of the valley including lots 77 to 80 in Crested Butte, and several lots in the Larkspur, Stallion Park and Buckhorn Ranch subdivisions and possibly the North Village parcel in Mt. Crested Butte if the property tax increase passes this fall.

Gunnison resident and owner of H&H Towing, Navid Navidi, spoke in opposition to putting the tax increase on the ballot. “Everything in Gunnison runs on property taxes but don’t make us pay more than our fair share,” said Navidi. “Putting this on the ballot gives people who don’t own property, who don’t pay property taxes, the ability to vote to raise taxes on those of us who do own property. People who run businesses here can’t compete with prices in Grand Junction or Montrose. How is raising taxes going to help us compete?”

“Even though they don’t own property, people who vote for this will be impacted and as a landlord, I plan to tell my tenants that an increase in my property taxes will be passed down to [them] through rent,” countered commissioner Jonathan Houck. “So even though they don’t own property, a tax increase is going to affect them as well.”

“Yes, but a property tax is the least creative solution for this problem,” said Navidi. “I mean, a five-year old child could come up with this idea, ‘Let’s just tax property again.’”

“We are pursuing solutions to affordable housing on many different fronts,” responded commissioner Phil Chamberland. “Our own developments, developments in Mt. Crested Butte as well as legislation proposed to the state to try to tackle the problem with short-term rentals and VRBOs.”

“The proliferation of short-term rentals is the single biggest contributor to the housing shortage and yet, they are taxed as residential, not commercial, even though many of these are run as businesses. An owner buys a property and then just short-term rents it and makes a killing. These should be taxed as businesses, not residential,” argued audience member and Gunnison resident Peter Gallagher. “If Mr. Navidi has a three-day weekend when he doesn’t tow a car, doesn’t see any business, he still pays commercial taxes year-round. But the short-term rental pays a sales tax and a local marketing district tax only for the nights rented. They should be taxed commercial year-round, not just when they are renting it,” Gallagher continued.

“We are actually proposing legislation to the state to assess short-term rentals not fully as commercial property but somewhere between residential and commercial. We are also proposing a bill to allow counties to levy a short-term rental tax to be dedicated for affordable housing,” said Messner.

In a later interview, Messner explained that Colorado Counties Inc. (CCI), the lobbying group representing counties throughout the state, including Gunnison County, must first approve any proposed legislation before sending it to the state legislature for debate in January.

Currently, short-term rentals pay sales tax and a local marketing district tax (LMD) based on occupancy. The LMD taxes are used to fund the Gunnison Crested Butte Tourism Association, and not for affordable housing.

“Right now, you can only use the sales tax and the LMD tax for marketing,” said Messner. “We want a tax on short-term rentals dedicated for affordable housing.”

In the end, after much discussion, commissioners voted unanimously to approve GVRHA’s request to put a property tax increase on the ballot this fall for affordable housing.

Funding stream could bring in $880K annually for affordable housing

By Cayla Vidmar

The Gunnison Valley Regional Housing Authority (GVRHA) requested support of the Mt. Crested Butte Town Council at the June 19 meeting to put a property tax increase on the November ballot. The measure would generate funding for affordable housing projects valley-wide. The Town Council unanimously approved the request.

According to a 2016 Gunnison Valley Housing Needs Assessment, there is a yearly funding need of $1.6 million, based upon a housing shortfall of more than 900 units in the Gunnison Valley. This housing need is generally considered one of the top issues facing the community over the next five years. The report cites that the lack of housing has affected the workforce, from entry-level positions to top managers at some of the largest organizations in the valley. This has “created a stifling effect on our economic growth potential,” according to the report.

GVRHA executive director Jennifer Kermode addressed the Town Council, saying the funds generated by the proposed 1.5 mill increase to property tax would be used to “leverage with other funding sources to create public/private partnerships for putting homes on the ground and developing other services and programs to keep affordable neighborhoods in the valley.”

Kermode explained the measure, saying it would “increase property taxes at a 1.5 mill increase level for 10 years, and no more than 0.5 mills in perpetuity after that.” Kermode explained that the increase should generate $880,000 annually.

Mayor Todd Barnes asked Kermode to detail what this tax increase would look like for commercial and residential properties per $100,000 of assessed value. Kermode explained for residential properties, taxpayers would see an increase of $10.80 per $100,000 of assessed value annually, and $43.50 for commercial properties per $100,000 of assessed value annually.

Kermode explained via email that there are “several parcels where home-building could get started with a funding stream, such as the property tax.” These parcels are located at the south end of the valley near Gunnison and in the north end in Crested Butte and Mt. Crested Butte.

The motion was approved to be put on the November ballot unanimously in Mt. Crested Butte, Crested Butte and the county, and approved 4 to 1 in Gunnison.

County requests to reduce number of units and change to for-sale affordable housing

By Cayla Vidmar

The Mt. Crested Butte Planning Commission will hold a public hearing on Thursday, July 5 at 4 p.m. regarding a Gunnison County Board of County Commissioners (BOCC) application to reduce the number of units proposed on Pitchfork lot 34 from six to four, and change the use from long-term rentals to for-sale deed-restricted units.

Pitchfork is a tight subdivision with notoriously difficult parking, according to Mt. Crested Butte community development director Carlos Velado, which the alteration to the PUD addresses. Fewer units will allow for garage parking in the four proposed units instead of on-street parking.

The BOCC is proposing a townhouse concept with two three-bedroom units and two two-bedroom units. According to the memorandum submitted to the planning commission from Velado, “Pitchfork is a very dense subdivision at 13 units/acre. The layout of the subdivision coupled with this density has presented several problems, most notably snow removal and parking during our winters.” Based on the memorandum, the proposal is reducing the number of units on the lot, which will allow for those units to have garages, and will theoretically reduce the parking impact in the neighborhood.

The Planning Commission will also be considering the proposal to change the units from long-term rentals to for-sale deed-restricted units. In the memorandum, Velado states, “The Planning Commission shall judge if allowing for the units to be sold to a qualified buyer is in the best interests of the town or if the existing long-term local renter is the better option.”

A public hearing will be held on Thursday, July 5 at 4 p.m. If the Planning Commission makes a recommendation to the Town Council, the council will hold another public hearing and consider the application at a future date.

$3 million project described as a “win-win-win”

By Mark Reaman

A unique three-way deal that will address land protection in the valley and take a significant step toward addressing affordable housing is in the works through the Crested Butte Land Trust (CBLT).

In conjunction with the U.S. Forest Service and the Gunnison Valley Housing Foundation (GVHF), the CBLT is facilitating a land exchange that will fill the coffers for local housing while protecting land around one of the upper valley’s most beloved recreation spots: Long Lake.

Under the proposed exchange that is somewhat complicated, the CBLT would contribute 15 acres of property it owns on Copley Lake to the Forest Service. In addition, the CBLT will also purchase 613 acres of in-holding land in the Fossil Ridge area and give that land to the USFS as well.

In exchange, the Forest Service will give the CBLT 120 acres of property that surround the south and eastern side of Long Lake up Washington Gulch. That Long Lake acreage is essentially a Forest Service inholding surrounded by private property, so this would allow that property to be owned by the CBLT to protect recreational access, wildlife, habitat, its scenic views, and rangeland connectivity.

The housing component of the deal comes from a 2010 agreement between Butch and Judy Clark, the Gunnison Valley Housing Foundation and the Trust For Public Land (TPL). The Clarks wanted to donate a significant piece of land in the Fossil Ridge area to the Housing Foundation at the time. According to GVHF board president Jim Starr, when the original land donation was taking place in 2010, the foundation had not yet acquired its tax-exempt status. To get the deal done, the Clarks went to the TPL and asked the organization to hold the land, which the TPL agreed to do.

So when this final transaction is complete, the Housing Foundation will receive the sales money from the Fossil Ridge property through the TPL. That will net the GVHF about $2.5 million to be used for workforce housing in the county.

An official appraisal came in last week and valued the Fossil Ridge property at $2.915 million. The Long Lake Forest Service property is valued at $3 million. The CBLT has set a fundraising goal of $3.3 million with the additional money to go toward the necessary transaction fees, trailhead infrastructure and a stewardship management endowment.

CBLT executive director Noel Durant said the transaction will not only result in meeting the primary mission of the CBLT but also address another critical issue in the valley: housing.

Lots of winning!

“It is an exciting project and one that touches on different needs for the valley,” Durant said. “Long Lake is incredibly scenic and a well loved recreation area. It is also a critical wildlife habitat, along with being a key component of the ranching landscape, given its connection to the Allen ranch. It hits on the pillars of our land trust mission. On top of that, the deal will address a community need with the affordable housing component. People of all income levels should be able to live up here and enjoy the benefits of the valley. This will help accomplish that. This deal helps keep Crested Butte, Crested Butte.

“When we started this project we looked at this opportunity as a triple win,” Durant continued. “It protects Long Lake, helps make the local national forest more whole and allows this place to be for everyone.”

USFS Gunnison Ranger District ranger Matt McCombs has the same enthusiasm for the project. “From my perspective, the proposed exchange is a model win, win, win,” he said. “A big challenge in land management can be dealing with inholdings, be they public lands surrounded by private property or vice versa. Just like with your neighbors at home, conflict can mount when access, land use or development issues arise. The proposed Fossil Ridge II exchange reduces the potential for these types of challenges by realigning ownership of the parcels to entities better suited to managing them for the overall benefit of the public, over the long term.”

Housing Foundation board president Jim Starr said this is the quintessential “win-win” project for the community.

“We couldn’t ask for a better exchange to come along,” Starr said. “It is really great, given the fact Long Lake has been used for so long, especially by the young people in the Crested Butte and Mt. Crested Butte communities. To work with the land trust is great. It has always been my concern that as we worked to conserve more and more open space we take away places for people to live and make land more expensive. This project addresses that conundrum by funding the housing foundation.”

Starr said the board has not talked about how to utilize the housing funds that will be accumulated through the project. He said some general discussion about possibly purchasing land for future workforce housing is one possibility. “Land banking is critical as prices rise,” he said. “We have always worked with other entities to help projects along. We’ve participated in Anthracite Place, the RMBL/CBMR seasonal housing project, the four duplexes being built by the town of Crested Butte, and the Lot 22 project next to Rock Creek in Gunnison. We’ve also assisted with some Habitat for Humanity projects. We will likely continue to follow that practice of helping other entities with their projects. We also need an endowment to make sure the Housing Foundation can continue to work on housing into the future. Our challenge is to balance putting up housing now without running out of funds to continue our work in the next three to five years. But we have not talked specifics at all.”

Long-term stewardship part of the plan

Durant explained that an official parking lot by the Meridian Lake Dam and old tennis courts off Washington Gulch Road will be used as the main public trailhead. Hikers and bikers will be able to access the lake over the dam. Signage will be installed and parking infrastructure constructed. That is where some of the additional funds will be spent.

“Long-term stewardship of the property is important to the project. So is working well with all the neighbors who have felt the impact of increased recreation. The Allen ranching family has been incredibly generous in allowing public access across their property to the lake,” he said.

McCombs said that as a public lands manager, he is confident the CBLT will bring good management practices to Long Lake.

“The Crested Butte Land Trust has a demonstrated track record of sustaining and broadening recreation opportunities on the lands they manage and I’m pleased this approach will be taken for the proposed future management of Long Lake as well,” said McCombs. “Factor the unique nexus with one of the Gunnison Valley’s toughest issues, affordable housing, and again—win, win, win.”

“The land exchange to protect Long Lake is a critical investment to protect our quality of life at this end of the valley,” concluded Durant. “People can continue to enjoy Long Lake and there will be active management to protect recreation, wildlife and grazing … all those things make Crested Butte what it is. The reinvestment for affordable housing is another core challenge the valley is facing where we need people of all income levels to live in our valley. That’s another critical issue addressed with this project.”

Starr encouraged everyone to consider donating to this Crested Butte Land Trust project. The CBLT plans to immediately begin a fundraising campaign to raise the $3.3 million, with the intention of completing the transaction by this time next year.

Duplexes will be ready in just over a year

By Mark Reaman

The next project for affordable housing construction in Crested Butte was okayed by the Town Council on Monday, May 21 with approval to spend more than $2 million for eight deed-restricted affordable housing duplexes in town. The project should break ground within the next few weeks.

The town will purchase one of the duplexes. Another of the duplexes will be sold to the Gunnison school district for an employee rental. The remaining units will go to local resident lottery winners who meet income restrictions. The duplexes range in size from a one-bedroom unit that is 650 square feet to a three-bedroom unit that is 1,300 square feet. Mountain High Concepts is working with the town to construct the units.

The total cost for the units will come in at about $2,062,500. According to the town community development department figures, that means the cost per unit is $257,812. “This is below the target affordability range for people in the 120 percent AMI [area median income] category. The units will be priced according to square footage and size,” explained community development director Michael Yerman.

The town will spend $520,000 on one of the completed duplexes for a rental to be used by town employees. Yerman said the town would recoup the remaining $1,543,000 through sales of the remaining six units, which will replenish the general fund reserves used to construct the units. The duplexes should be ready for occupancy by August 2019.

“It is a great project that will serve the community,” noted town Council member Kent Cowherd. The rest of the council agreed, voting unanimously to spend the money and get the project in the ground.

The development team for the Corner at Brush Creek seems to be making a push for public support before the next public hearing on the matter, scheduled at the county courthouse for May 4. Local residents are getting inundated with a slick ad campaign through the U.S. mail and social media. Spending time and money on high-end, glossy countywide mailings and Facebook and Instagram messaging for a project that we understand has little financial profit margin built in is…interesting. The question being raised on the street right now is, ‘Is the project about the money, the fight or the cause?’ It could be some of each. And frankly, the support being sought in this campaign is one that 99 percent of the people in the county can get behind. Yes, Gunnison County needs more housing. The debate is beyond that question and now centers on how and where.

A group of locals is again publicly asking the owners of a couple of accessory dwelling units (ADUs) to realize the potential end result of their lawsuit against Crested Butte  if they win their appeal (see their letter on page 5). While we were a bit surprised the town won the first round of court rulings on pretty much every point, I too have pointed out the ramifications of what could happen if the ADU owners prevail. It could hollow out a major core of workforce housing that keeps people living in town. We won’t like it and frankly, I don’t think the ADU owners will like it either when there is no one around to take their dinner order or weed the garden. As usual, the law of unintended consequences comes into play.

A discussion during last week’s Gunnison Valley Regional Housing Authority was basically a tortoise and hare debate over how to potentially spend public affordable housing funds that might be raised if voters approve a ballot measure this November.

Crested Butte community development director Michael Yerman advocated asking the voters for a reasonable amount of money that won’t push business property taxes over the cliff. He then suggested strategically using the money to slowly and deliberately set up projects that attract housing. For him, that primarily meant addressing what he called “horizontal” costs. Those are things like roads, easements and utilities. Those items are the infrastructure that every housing project needs but that no one truly appreciates.

There was some support for his direction but a few people on that board felt if voters are going to choose to raise their taxes, then it is best to end up with a finished project that puts workers in houses quickly.

The problem is that at a new 1.5 mill levy, the tax would bring in about $880,000 a year and that’s not enough to end up with a ton of actual housing right away. A block of infrastructure runs between $600,000 and $800,000.

Yerman argued that it would be best to knock off a project every year and set up the infrastructure to attract a stream of other projects. He said as a planner he could look years into the future and taking the deliberate road would pay off over the long haul. Going for the “big splash” may be sexy but it is not always the most productive.

Case in point: The “big splash” project two miles south of Crested Butte feels more like a belly flop right now unless things continue to change. And they could change more. Think about it: If the developer is being forthright and needs the big density to pay for the infrastructure costs, that issue could be eliminated if public money goes toward that infrastructure. Then an affordable housing project at that location that works for the entire community could actually be accomplished in a strong public-private partnership. It goes back to taking that time-out I keep harping on. The county commissioners can step back and take the time to figure that one out and then attack the infrastructure for the 17 acres in Mt. Crested Butte and then do the same for a plot of land in Gunnison.

The town of Crested Butte has slowly made inroads into affordable housing and over the years it has paid off with the best program in the valley that combines incentives, regulations, taxes and a variety of opportunities from private and public rentals to deed-restricted ownership. That did not happen overnight but instead has taken literally decades.

The Housing Authority board will be depending on the valley’s Housing Foundation to “sell” the proposed tax measure. Being able to “sell” the tax measure will take more than a slick PR campaign. Those sometimes backfire with people. Getting an affordable housing tax approved will take a real plan with attainable outcomes. The status of Brush Creek is also a legitimate question that will be on voters’ minds when it comes to pulling the lever in the voting booth.

So, overall, taking a time-out to figure out the win-win with the Brush Creek parcel and then taking a solid but deliberate approach to potential workforce housing projects throughout the valley seems to be the best road right now to make a difference for the future.

—Mark Reaman

Mill levy would bring in about $880K for a decade

By Mark Reaman

The Gunnison Valley Regional Housing Authority board of directors has decided to pursue a tax measure this November. The board agreed to ask voters to approve a 1.5 mill property tax increase on the fall ballot. The board members decided to “sunset” or stop, most of the tax after ten years but keep a half mill in perpetuity to be able to fund maintenance and administration of future projects in the valley. The 1.5 mills would be expected to bring in about $880,000 annually.

The money would be used to fund different elements of affordable housing in the valley and provide a source of funding for the Housing Authority not reliant on the local governments. It could be used to help fund infrastructure on property or subsidize actual housing units. It could be used for Housing Authority administrative purposes or to match grant money used for housing projects.

“After the sunset I would like to see a half mill remain to retain the ability to manage projects,” said Gunnison mayor Jim Gelwicks at the April 18 Housing Authority board meeting. “I think the Housing Authority needs an independent source of revenue separate from the county and municipalities to keep the organization going during changing economic and political climates.”

Gelwicks said, realistically, a property or sales tax constituted the only two options currently available to tackle funding for the Housing Authority. “Honestly, for the most part, none of the options are very palatable at this point for the city council in Gunnison,” he said. “It is not something people are eager to do. But for me personally, I’d rather see something on the ballot than not. It is a tough question down there. There are splits about this in our community. The need is there but there is a feeling that housing is starting to see some traction already.”

“I see the horizontal infrastructure costs as a big issue,” said Crested Butte community development director Michael Yerman. “To me if you eliminate the horizontal costs you can attain price levels that work for affordable housing. Would the Housing Authority look at using the tax money strategically for horizontal costs like roads, streets, easements, water and sewer? I think if you target the funds toward that it would help a lot of the projects around the valley.”

Gelwicks said it was his belief that such a move could encourage more workforce housing in Gunnison.

“Infrastructure is certainly a big hurdle in Gunnison,” agreed Housing Authority board chair Kelly McKinnis.

“Asking people to support a tax for infrastructure seems like a hard sell,” said board member Ellen Harriman. “It is hard with nothing in the ground right away. That visual is tough.”

“The reality is that any project will take two or three years from concept to units,” said Yerman.

“We need to do both to the best of our ability,” said Gelwicks, referring to addressing both infrastructure and actual building.

Mt. Crested Butte mayor Todd Barnes agreed infrastructure is important. “Those costs can be a headache,” he said. “The 17 acres we have in the North Village near the town hall has the same situation as everyone else. What is the easiest way to get infrastructure to it?”

Barnes told the board he was confident his council and the citizens of Mt. Crested Butte would support a tax increase for affordable housing. “It sounds like the problem could be getting the majority of people in Gunnison to do so,” he said.

“The infrastructure issue would need to be understood by the public and it seems that the two main areas where it would be needed most are Gunnison and Mt. Crested Butte,” said county commissioner John Messner.

“Our town would welcome that infrastructure,” said Barnes. “We can handle dense growth up there. That acreage could take several hundred units. Mt. Crested Butte is where the jobs are. It is close to trails. It is a good location for workforce housing.”

Messner noted that last year’s discussion about a housing tax proposal centered on bringing in about $800,000 annually. “That was not enough to meet what we determined was necessary to tackle the housing problem in our strategic plan,” said Messner.

“It doesn’t meet the needs of the housing needs study,” added Gelwicks.

“Even at the $800,000 or $880,000 level, it is something. The fact is, we will need more money than we can realistically ask for,” said Yerman. “We have to be aware of the impacts on our commercial properties that get hit the hardest with such a property tax increase. But my strategy is to take what we can get and pick off one project at a time. Maybe it is a LIHTC [low income housing tax credit] project in Gunnison. Maybe it is infrastructure in Mt. Crested Butte. But doing something incremental year after year works. It won’t be the big splash that everyone wants but as a planner I can look out 15 or 20 years and see significant progress. That will put us in a better place than trying to use the money for one big splash.”

“If you don’t start somewhere, then you are losing ground,” agreed Barnes. “This issue is not just in the Gunnison Valley. It is everywhere. Denver, L.A., other resorts are all feeling it. I think the 1.5 mill request is a good place to start.”

Barnes said Mt. Crested Butte might also consider floating a short-term rental tax similar to the one recently passed by Crested Butte. “As for the property tax, I think workforce housing is a hot topic and I don’t think it will be a hard sell. Everyone ultimately benefits. It is something we need to solve together, not apart.”

“The reality is that the property taxes in our area are very low,” said McKinnis. “Some other district will go after the tax opportunity at some point and I’d like to see it go for housing.”

“Residential property taxes may be low but that doesn’t matter when people get their tax bills,” said Messner. “When that happens the county phone rings off the hook. There is a perception that the county would be raising taxes. In that respect, the county would like the municipalities to take a lead on this initiative and the county will stay in the back seat. That also makes sense since the municipalities have clearly indicated that they feel affordable housing density should be located within town limits.”

“Whether the mill levy is 1 or 1.5, the fact is it is money we are not generating now,” said Crested Butte mayor Jim Schmidt. “Plus it can be leveraged against other grants. We need to start somewhere.”

Housing Authority executive director Jennifer Kermode said the tax money could probably be leveraged three or four times through grants.

Schmidt noted that the “elephant in the room” about the success of a fall ballot issue is the controversial Corner at Brush Creek affordable housing proposal, currently in the county sketch plan review process.

“I think it needs to reach a conclusion one way or the other quickly,” Schmidt said. “It will be tough for voters to make a decision with that hanging out there.”

“It has to be addressed in the messaging,” said Kermode.

Gunnison Valley Housing Foundation executive director Darren Higgins said that group has already formed a political action committee (PAC) to help educate the public on the affordable housing issue. “But we would rather start that education process now and not in August,” he told the Housing Authority board. “We just need to know what we’re selling.”

Housing Foundation board chair Jim Starr informed the board in a letter that he favored trying to pass a workforce housing tax this year despite higher property valuations that impacted property taxes. Part of his rationale is the anticipated demographics of voters. “[T]he election survey found last year that Democrats supported the tax by 66 percent to 34 percent for Republicans,” he wrote. “I believe this year’s election will see a greater percentage of Democrats and similar-leaning Independents voting than Republicans, so the odds are good.”

Overall, the Housing Authority board agreed that bonding against the tax would not be a good idea. They will work to determine project priorities but agreed setting hard projects would be difficult since things can be in flux quickly. “We need people to understand there are opportunities and not promises for a specific project,” noted Kermode.

The board wants the community to understand that public-private partnerships are important with future housing projects.

The Housing Authority board will draft ballot language that will be taken to the county and municipalities for support. That ballot language is expected to be fairly open and non-specific.

If approved by voters, the tax would cost a $1 million commercial property about $430, while a $1 million residence would be responsible for about $100.

School board will vote in March

By Aimee Eaton

When Gunnison Watershed School District administrators talk about the housing crisis in the upper valley, they often place emphasis on the community aspect of the Crested Butte Community School. As in, “Our teachers should be able to live in the community.”

With this in mind, the school district has been in conversations with the town of Crested Butte about collaborating on the construction and purchase of local housing to be used as rentals for district employees.

At the February 26 school board work session, Crested Butte community development director Michael Yerman, town manager Dara MacDonald and Gunnison Valley Regional Housing Authority (GVRHA) executive director Jennifer Kermode presented an opportunity for the school district to purchase part of a duplex, or an entire duplex, at a reduced rate for district employee housing. The unit is part of a build by the town that, when finished, will place either four or five duplexes (eight or 10 units) into the town’s affordable housing pool.

“Last year the Town Council made a commitment to provide housing for the school district,” Yerman told the school board. “We’re planning on breaking ground on this project on May 1. We’d like to know if the school district wants to be involved.”

Yerman explained that the town is subsidizing the cost of the buildings, but in order to get the construction financing nailed down, it had to be able to show the bank that there were interested parties. He also explained that if the district were interested in purchasing a whole duplex, the town would likely add a fifth structure to its plan—a decision that would continue to move town toward its goal of increasing affordable housing. The cost of a single side of a duplex is estimated to be about $250,000.

School board member Marilyn Krill said she and many members of the board had reservations about joining the property management game as landlords, to which Kermode responded that the GVRHA could fill that role for the district for a small fee.

“It would give you some separation from the whole rental process,” said Kermode.

In the 2017-18 budget, the school district assigned about $326,000 for workforce housing, and it has consistently said it is committed to exploring housing solutions for teachers and staff.

While the school board did not jump at the town’s offer to purchase a unit, they did commit to discussing the option further and voting on whether to proceed at the next school board meeting, to be held March 12.

“We’d like to know as soon as possible whether the school district wants to be involved,” MacDonald told the board.

“It’s not unusual to float your AMI around”

By Toni Todd

The Gunnison County Planning Commission, and what has become an especially large audience at meetings concerning The Corner at Brush Creek development proposal, heard presentations from the Gunnison Valley Regional Housing Authority (GVRHA) and Gatesco, Inc. last Friday. The morning was an opportunity to learn several possible approaches and strategies to the workforce housing challenge generally. It was also a time to hear what’s still being sorted out regarding how deed restrictions will work at the proposed project at Brush Creek Road and Highway 135 near Crested Butte.

GVRHA executive director Jennifer Kermode presented a slide show explaining three different workforce housing models, how deed restrictions work with both rentals and homes for purchase, and how Area Median Income (AMI) relates to rental rates. She called her presentation Workforce Housing 101.

The goal, said Kermode, is to create housing that costs no more than one third of a tenant’s gross income. That cost should include additional expenses associated with housing, such as utilities.

She listed forces at work in our community impacting the availability and affordability of housing in the Gunnison Valley: inadequate supply; low wages and a high cost of living; pressure from second homeowners/vacationers driving up costs; high construction and labor costs; loss of long-term rentals (due to proliferation of short-term rentals, or STRs); people retiring in place; and regulatory barriers.

“But we also want to preserve community character, open space, view corridors, and quality of experience to guests, find sustainable solutions and keep locals local,” Kermode said, implying a tall order in the face of formidable obstacles.

Kermode showed the gap between the need for housing and its availability in Gunnison County, as measured in the county’s 2016 Housing Needs Assessment. She noted 39 jobs posted in last week’s paper for the north valley and just five ads for rentals with the prices advertised. “Wages have not gone up from 2016 enough to make these rents affordable,” she said.

Ways to address the need

Three models of housing were presented as options to address housing needs in the valley.

Model 1, the Habitat for Humanity model, calls for prospective owners to help build their own homes, alongside contractors who provide guidance and who donate time and materials. Kermode said Habitat typically builds a home or two every couple of years.

Model 2, the community land trust model, involves public ownership of property designated for workforce housing. For example, “The community owns 40 acres or so,” Kermode suggested “and they build homes on that land. Buyers buy the house and lease the land under the house.”

Model 3 is the deed restriction model. Deed restriction controls who can rent or buy homes based on income and employment status, among other criteria, and also controls appreciation of the property in the event of a deed restriction that allows for home ownership.

“If someone makes 100 percent of AMI, does that mean they shouldn’t be a target of workforce housing?” asked Gunnison County community development director Cathie Pagano.

“The question is, if you’re making $55,000 a year, can you afford to buy a house in Crested Butte or Gunnison?” responded Kermode.

The AMI for one person in Gunnison County is $49,600. For a family of two, it’s $56,700 and for a family of four, $75,000. Kermode insisted it’s important to target a range of AMI. Workforce housing may be targeted at renters or owners up to 180 percent of AMI. Of course, it’s always more difficult, the lower a worker falls on the pay scale.

Kermode said some people feel that appreciation on deed-restricted homes for purchase should not be capped, but she disagrees. “I am of the mindset that if you are investing public dollars into a public asset, you need to stretch those dollars as far as possible. You want to make it a reasonable amount of appreciation for the current homeowner, but you also want to keep it affordable for the next owner.”

To qualify for deed-restricted housing, Kermode said, “People should be employed.”

Kermode suggested it’s also important to look at someone’s liquid assets, and whether deed restrictions might prohibit ownership of other properties.

“What happens when people want to retire in their deed-restricted property?” Kermode asked. “Do we force them to sell their home?” One idea is to allow someone who’s been part of the local workforce for many years to stay, but it’s also important to deter folks from moving into a deed-restricted unit and immediately retiring.

Rental concerns at Brush Creek

Referring to The Corner at Brush Creek proposal, commissioner Molly Mugglestone asked, “Is the housing authority involved as the deed restriction authority or is the county?”

“We’ve been working on establishing roles and responsibilities,” said Pagano. “That’s one of the things we might ask the housing authority to do.” The crafting of the deed restrictions in the case of The Corner at Brush Creek, Pagano added, will likely be a collaborative effort between the county and the GVRHA.

How do other resort towns 

handle it?

Kermode described several workforce housing projects in other resort communities. Shandoka, in Telluride, has 134 apartments on 10.25 acres. It’s 100 percent income and employment restricted, with 12-month leases and a long waiting list.

Pinewood at Breckenridge is workforce townhomes for sale. Their first priority, said Kermode, was to sell to people who work within the town limits of Breckenridge. Once those units were sold, folks working outside the town limits but still in the county were included. “When you’re restricting by location of employment, you do it only at the time of purchase,” Kermode said. Pinewood also has a waiting list.

Buffalo Ridge at Avon/Eagle Vail was cited as the worst approach to resort-area workforce housing. Kermode described the complex as 176 units on 11.85 acres, separated by many miles from where these folks worked, and from basic town infrastructure, like shopping and schools. Most of the units—80 percent—are income restricted to 50 percent to 60 percent of AMI. Kermode described it as isolated and noisy. It’s located right off I-70 and overlooks the freeway, with no amenities nearby and no bus stop. “But it’s full,” Kermode said, “with a waiting list of 70.”

“This is an example of what not to do,” added Pagano.

“Has anybody figured it out and completely solved the housing challenge?” asked Kermode. “No. Places where people love to go, beautiful places, the pressures are still there and they continue.”

“We’ve heard from many that [The Corner at Brush Creek] is an attempt to solve the entire affordable housing problem,” added Pagano. “This is not the silver bullet that solves all of our problems, but this is one piece, and there are efforts going on in several places in addition to this.”

Pagano noted opportunities being explored at Larkspur and Buckhorn in Mt. Crested Butte, the Lazy K and Rock Creek in Gunnison.

“Communities are prioritizing based on what parcels are most ready for development,” said Kermode. Rock Creek in Gunnison, for example, is essentially ready to build, with utilities in place.

Kermode explained the difference between Brush Creek and Anthracite Place. Anthracite was built with tax credits that covered 70 percent of construction costs, she said, which made it possible to offer 100 percent of the units as deed-restricted and target a lower AMI.

“That’s not the case here,” Kermode said. An opportunity like Anthracite Place isn’t likely to come around again anytime soon. “There are only so many tax credits in the state of Colorado. They try to spread them out across the state,” Kermode said.

Making the numbers work

“There’s just no way for a developer to build a project in a high-cost place like this without some way to offset the cost of the affordable units,” said Kermode. That, she explained, is why 35 percent of the units at Brush Creek will be rented at market rate.

“The housing assessment is now a year old. How much progress have we made?” asked planning commissioner Jack Diani.

“We’re moving the needle now,” said Kermode. “It’s taking some time. The town of Crested Butte has taken some action.”

Working to alleviate regulatory barriers is another effort under way, added Kermode, along with finding ways to bank some land for future projects.

“The city of Gunnison has been working with a housing consultant out of Portland,” added Pagano. “He comes in and looks at zoning regulations and determines whether they make sense.”

Attorney Kendal Bergemeister spoke on behalf of Gatesco. He began by emphasizing the need, today and in the not-too-distant future. “Gunnison County is projected to have a population of 22,728 by 2050,” he said. “This isn’t just Crested Butte. This is a microcosm of a population boom statewide.”

The 2016 Housing Needs Assessment determined that the county needs 171 new, workforce housing units by 2020. “A couple of units a year is not going to get us to that 171 units,” said Bergemeister. “There’s a whole other need for for-sale units that’s not even addressed here. Look at what’s been proposed for Phase I of the project, compared to the demand in 2020. That’s 128 units as part of the 171. The proposal does not oversupply what is needed, either in aggregate, or at either of the various income levels.”

Bergemeister said Brush Creek would be available to tenants who qualify at various AMI:

—30 units at less than 80 percent

—64 units at less than 120 percent

—84 units at less than 180 percent

The idea, he said, is to provide some assurance that there could be units available to folks with low income, but also have some flexibility to accommodate a range of AMI.

Bergemeister explained that units would not be specifically designated for AMI ranges. Rather, any unit available could be rented to anyone within one of the ranges targeted, depending on need.

“There isn’t a specific physical space that’s designated to a specific AMI. Rather, as a renter grows, that unit grows into another AMI range,” said Bergemeister.

Who enforces the restrictions?

There was extensive discussion on how the deed restrictions would be managed and enforced if necessary.

“Having us manage it and submit a report is probably the best way to handle that,” responded Bergemeister. “We also thought that at the initial lease-up, maybe [the county] would play a more direct role, and then we handle it more on an ongoing basis. It’s a conversation we’re having.

“There’s been a misconception that we are going to charge everyone 30 percent of their income,” he added. “The 30 percent of household income is a cap. If you’re above 100 percent of AMI, that doesn’t mean much, because you can afford the market rate. So, the question related to those incomes isn’t the price; it’s the supply.”

“It’s not unusual to float your AMI around,” clarified Kermode.

Discussion evolved to the wide variety of housing needs in the valley. Planning commissioners wondered about the AMI of a pair of teachers to understand how this would apply to middle-income residents. They figured two teachers would land at 120 percent of AMI.

“If you make $50,000 a year, you’ll pay rent of $1,250, with utilities included,” said Bergemeister. “The current market rate for a two-bedroom unit on the open market is $1,250 to $2,400 per month.”

The shortage impacts a wider range of locals than one might imagine, said Kermode. “Dr. Tarr said they’re trying to recruit physicians [at the hospital] and they cannot find housing,” she said. “So, it ranges from service workers to professionals.”

Bergemeister said Gatesco is working on proposed lease terms. “We had initially proposed a minimum lease term of six months on a deed-restricted unit and a three-month lease on a market unit, to be sure to make it clear this is not a VRBO option. But we wanted to have some flexibility to accommodate seasonal workers,” Bergemeister said. “One concept we’re looking at now is deed-restricted units leased for one year, but maybe a small percentage of them could be leased at six months to a year. For free-market units, 80 to 90 percent would have to be six months or greater, but a small percentage could be leased out at three to six months.”

“Would that be in coordination with their employers?” asked Diani.

“Yes,” said Bergemeister. “If you’re going to have anything that’s less than a year, it’s got to be pursuant to an agreement with an employer.” Bergemeister suggested a master lease agreement with major employers to negotiate shorter leases, adding, “but someone who works with a smaller employer could get shut out of that option.”

“One of the difficulties for people moving into the area is the idea of first, last and security deposit,” said planning commissioner Vince Rogalski.

“Master lease agreements could be a way of addressing that, too,” said Bergemeister. “Perhaps they have some master security deposit that allows tenants to move in without that. That’s a detail we could certainly get into.”

December site visit scheduled

The next meeting to discuss The Corner at Brush Creek is scheduled for December 1. Planning commissioners will leave Gunnison at 10 a.m., arriving at the site about half an hour later, to conduct a second site visit, where they plan to walk the neighborhood and get an idea how the proposal might look, taking into account proposed building heights and other structural considerations. They’ll return to the commissioners’ meeting room at the Gunnison County Courthouse for a work session and further discussion at 1:30 p.m. that day.

Gatesco attorney fires back

By Mark Reaman

The primary author of the 2016 Gunnison Valley Housing Needs Assessment document thinks there are some major flaws with the Gatesco Brush Creek affordable housing sketch plan proposal that is currently before the Gunnison County Planning Commission. The report by Melanie Rees was commissioned by the town of Crested Butte and her conclusions drew the wrath of Gatesco’s attorney, Kendall Burgemeister of Law of the Rockies, who wrote a scathing rebuttal of her report.

Crested Butte community development director Michael Yerman highlighted key points of Rees’ “Key Metrics Comparison between The Corner at Brush Creek and the 2016 Gunnison Valley Housing Needs Assessment” for the council at the Monday, November 6 council meeting.

Rees’ report to the Town stated, “Overall, the proposed Brush Creek development proposes too many units relative to need and the proposed income targeting is not aligned with the housing needs… As proposed, the project would provide nearly four times the number of rental units needed for the middle-to-upper income households.”

The report was submitted to the town last week and shared with Gatesco. Gatesco attorney Burgemeister responded Monday. “The Rees report, and consequently the staff report, includes numerous erroneous conclusions based on material misrepresentations of certain key facets of the Brush Creek development proposal,” Burgemeister wrote. He said Rees’ conclusion that all rent would be set at 30 percent of gross income was not true; rather, that would be the maximum rent allowed on deed-restricted units.

The Burgemeister response said Rees had made a “fundamental mischaracterization” of the development proposal. He called portions of her analysis “faulty,” “fatally flawed and utterly useless.” He said some of her conclusions were “invalid” and “misguided conjecture lacking any factual basis.” He characterized her analysis as coming from “an imaginary world.”

“Ms. Rees’ analysis so severely misrepresented the actual Brush Creek development proposal that it appears that the Rees report was not intended to provide an objective assessment but rather a biased talking points memo in opposition of the project,” Burgemeister’s conclusion stated.

“A lot of voices were making statements about the Needs Assessment so the town was trying to get an opinion from Melanie as the author of the assessment,” Yerman explained.

The attorney’s rebuttal did not sit well with the Town Council.

“We went to the original author to see if the Brush Creek proposal addressed the ailments identified in the Needs Assessment,” explained Crested Butte mayor Glenn Michel. “We are trying to close an information gap. I think the report is timely. We plan to submit this to the county to help inform both the county and the town.”

“Given the accusations from Law of the Rockies, is Rees a credible authority, a reliable source on this?” councilman Chris Ladoulis asked Yerman.

“It is unfortunate that Gatesco took the stance they did,” said Yerman. “They used the Needs Assessment for data supporting their proposal. Melanie lives and breathes affordable housing and has for many years. She put the Needs Assessment together. She’s a professional. So, yes, I think she is a reliable source.”

“I have full respect for Melanie as a professional,” said Michel. “All the parties in the county were on board to hire her to compile the assessment.”

“I hope the Planning Commission takes into consideration the tone of the [Gatesco] letter in their proceedings,” suggested councilman Jackson Petito.

“I found the letter from Gatesco offensive,” said councilman Jim Schmidt. “[Rees] does this sort of work for resort communities all over the West. I’m not sure why Gatesco decided on a personal attack on someone reviewing their work. It was a hostile attack and unfortunate. I hope that doesn’t set the tone of discussion with Gatesco in the future.”

“We want to take the high road,” agreed Michel.

“Melanie is considered the expert in affordable housing issues in mountain communities,” added town attorney Barbara Green. “I would recommend she attend the Planning Commission meeting on November 17 when they are talking about housing if it is within the town budget. I am sure Law of the Rockies will have representation there.”

Council voted unanimously to submit Rees’ report analysis to the Gunnison County Planning Commission.