Affordable Housing in Crested Butte - 2010

2010 Affordable Housing Task Force

Name RepresentingReed Betz Town CouncilJohn Wirsing Town Council, AH resident, contactorRandy Swift HomebuilderDavid Owen Housing Authority & RealtorJohn Sale Housing Authority & CBMRHeli Mae Peterson Small business, AH residentJeff Buehler BankerMargot Levy Citizen

John Hess Planning Dept.Bob Gillie Building Dept.Melanie Rees AH Strategic Planner

The Problem

“In Crested Butte and similar communities where land is expensive

and housing demand is fueled by wealth from outside the region, the private

market tends to supply housing that is priced beyond the reach of most local

employees.”

Town of Crested Butte Affordable Housing Strategy Support Study, March 2010

2000 to 2009

• median price of homes grew over 200%

• median income grew 45%.

1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090

200,000

400,000

600,000

800,000

1,000,000

1,200,000

SFR Median Sales Price and Income (Family of 4 AMI)

Median Family Income, Gunnison County Median SFR Sales Price, Crested Butte (on top of income)

2009 – Crested Butte

• $ 60,000 - Median income • $802,500 - Median price of all units

(listed for sale – in May 2009 - SFR & condos),

• $228,540 - annual income needed for $802,500 home.

• $283,000 - needed to afford the median priced SFR.

2010 – Crested Butte

• $ 60,000 – Median income • $795,000 - Median price of all units

(listed for sale – in Oct. 2010 - SFR & condos)

• $226,600 - annual income needed for $795,000 home

(with $40,000 down payment (5%))

• $230,024 - Annual income needed to afford median priced SFR (with $42,000 down payment (5%). ($849,450 SFR )

What can we afford?

• $60,000 x 30% x 80% = $14,400 • / 12 = $1,200 / mo. • = $200,000 loan @ 6% for 30 years • + 5% down = $210,250

Change in Occupied Units

1995 2000 2005 20090%

10%

20%

30%

40%

50%

60%

70%

80%

59% of the Crested Butte

“Needs Assessment” responders feel that housing is:

• the most serious, or • a critical problem

in the community.

Crested Butte Affordable Housing Strategy Support Study, March 2010

Why should we care?

• Ensure there is housing for essential jobs: – fire fighters – police officers – teachers – medical practitioners – snow plow drivers

• Employees are forced to commute long distances, in sometimes dangerous conditions, to find homes in less expensive communities.

What are we doing about this?

• 1,063 residential units in Crested Butte - 2008

• 187 units (17.6%) deed restricted. • 48.1% (average) new units built since

2000 have been deed restricted.

What are we doing about this?

• Red Lady Estates - 10 mobile homes• Town Ranch house - 3 apartments• Poverty Gulch - 10 condos• Paradise Park

What are we doing about this?

• Paradise Park– 10 Mutual Self help Build– 1 Town Manager’s house and acc. dwelling– 1 Habitat for Humanity– 4 SFR homes– 3 Town built duplexes

What are we doing about this?

• Required deed restricted units in Annexations – Kapushion - 5 – Verzuh - 8, plus land for Paradise Park

What are we doing about this?

• Incentives– 2/3 reduction in tap fees for deed restricted units

• 65 Accessory Dwellings• 43 in commercial buildings• 13 MFR• 15 SFR

What are we doing about this?

• Additional (bonus) square footage if the square footage is deed restricted residential– 8 units in B1 zone

How much has Town spent ?Expenses Revenues

• Poverty Gulch Infrastructure $ 31,710Tap fee reductions 70,000

• Paradise Park Infrastructure 680,102 Lot Sales $565,210 Duplex construction (6) 753,734Duplex sales (4) 479,160Manager’s house & acc 397,343Tap fees 566,094USDA grant 21,761Energy Impact grant 224,026

• Payment-in-lieu fees 2004-2009 464,770

Total $2,698,668 $1,754,927Paid by other town sources $943,741

Payment-in-Lieu

$464,770 - collected to since 2004 $ 382 - median per sq. ft. cost for

residential 1,217 - # sq. ft. fee could build at market

rates

$ 150 - average cost / sq. ft. for AH 3,098 - # sq. ft. fee could build at AH rate900-1,000 sq. ft. - average size AH unit built

by town

Jobs projected since 2004

174.9 jobs projected, given AH fees collected(Using current jobs generated / sq. ft. built (residential and commercial))

137 people (after applying 1.28 jobs / person)

79.94 housing units needed (after applying 1.71 employees / household)

Commercial Job Generation Rates

Gunnison County Merged DatabaseJobs/1,000 sq ft N Jobs/1,000 sq ft N

Bar/restaurant 7.95 7 8.15 213Construction 12.50 5 6.67 165Education 2.11 6 1.67 45Office 3.18 18 3.64 395Government 3.67 4 2.44 79Real Estate/prop. Manage. 1.46 2 5.00 116Retail sales 2.06 24 3.28 421Service 1.46 10 3.94 124Rec./attractions/amusements 2.00 13 4.38 69Other 2.69 11 3.33 233Overall Median 2.20 100 4.00 1,860

Residential Job Generation Rates by Size

Finished Sq Ft Gunnison County Merged Database<1,000 s.f. .16 jobs 0.10 jobs1,000 - 1,999 .17 0.142,000 - 2,999 .29 0.193,000 - 3,999 .45 0.264,000 - 4,999 .64 0.345,000 - 5,999 .41 0.466,000 - 6,999 n/a 0.637,000 - 7,999 .46 0.858,000+ 1.41 1.14Number of Cases 80 3,362

What is recommended?

• Goal:Maintain a diverse and enduring community by providing dispersed housing for people of all economic levels, employees, and people who contribute to the community, in a manner that is consistent with the historic character of the Town.

What is recommended?

• Policy 2: Construction of AH units should outpace the development of free-market homes.

• Policy 4: Those who create the need for AH should build AH to meet the housing needs of the people who will work in the new commercial, lodge, or residential spaces. ************Payment of fees-in-lieu of units should only be used for fractions of units.

What is recommended?

• Policy 6: The percentage of occupied housing units (owner occupied or long-term rentals) in annexations should be increased to 70%.

• Policy 10: Disperse AH throughout Town.

• Policy 11: Acquire land for AH.

What is recommended?

• Policy 12: Provide a variety of housing types…to accommodate the desired population diversity and maintain a mix of housing types similar to that found in Crested Butte today.

What is recommended?

• Policy 13: Housing design should be compatible with design in the vicinity of AH and quality should be sufficient for long-term livability and energy efficiency.

What is recommended?

• Policy 21: Focus on year-round residents, not seasonal workers.

• Policy 23: The current mix of incomes is as follows, and affordable housing should be designed to serve Categories 1 through 4:

Categories1 low income 40% < 80% AMI 2 moderate/middle income 23% 81% to 120% AMI 3 upper- middle income 16% 121% to 160% AMI4 upper income 10% 161% to 200% AMI 5 high income 11% >200% AMI

AMI Distribution

0 - 30%31 - 50%51 – 80%81 – 100%100% - 120%121% - 150%151% - 200%>200%

What is recommended?

• Policy 30: …affordable housing requirements should vary by size of the home.

• Policy 31: …occupants of units that get a tap fee reduction should earn at least 80% of their income in Gunnison County.

What is Recommended?

• Establish a permanent Affordable Housing committee to:– guide affordable housing projects, and – make Town policy recommendations to the Town

Council.

What is recommended?

• Residential: Stepped up rate as unit size grows:

< 1,999 sq. ft. 20% mitigation rate: .016 AH units or $2.85 per sq. ft. of free market residential unit built.

2,000 to 2,999 sq. ft. 30% mitigation rate: .033 AH units or $3.50 per sq. ft.

>3,000 sq. ft. 40% mitigation rate: .061 AH units or $4.50 per sq. ft.

What is recommended?

• Commercial:mitigation rate for construction of new commercial space: 25% of the housing demand it generates.

eg. for each 2,200 sq. ft. of new commercial, 1 new deed restricted unit should be

built.

Commercial Example

Sq. Ft. to be built 2,200jobs/1,000 SF 4 medianJobs generated 8.8Employees per household 1.7Jobs per employee 1.28Housing demand (units) 4.0Mitigation Rate 25%DR units Produced 1.01

Commercial payment-in-lieu

• For fractions of a unit, only• 1% mitigation rate = $ 3.73 / new sq. ft.• 10% 37.34• 20% 74.68• 25% 93.35• 30% 112.03• 40% 149.37• 50% 186.71

Housing units – needed for employees @ Majestic Plaza (20,000 sq. ft.)

9 provided• 1% mitigation rate 1 housing units needed• 10% 4 • 20% 8• 25% 9.14• 30% 11• 40% 15• 50% 19