The results of the assured housing Nexus study commissioned by Moab City and Grand County are out. The study examined the maximum justifiable assured housing fees that various types of developments might pay under a yet-to-be written assured housing policy.
Assured housing policies, also known as inclusionary housing policies, require certain developers to contribute to affordable housing to offset the demands that their developments or businesses place on the local housing supply.
The first phase of the study looked at fee rates with regard to different types of development and profit margins. The second phase, which was presented at the June 19 joint meeting of the Grand County and Moab City councils, examined what level of fees would be justifiable given a development’s impact on the economy and the need for below-market-value housing that it creates. BAE Urban Economics carried out the study.
The city considered an assured housing policy last year but when they ran it by the county, county legal advisors said that such a policy would need to be backed up by a Nexus study. To be legally defensible, an assured housing policy must be justifiable based on the impact that a development has on the need for below-market-rate housing in the community.
Now, both the county and the city are considering the assured housing policy. Both entities passed ordinances giving developers notice that they may be subject to an assured housing policy.
The study found that $15.57 per square foot was the highest legally justifiable fee the county or city could impose on hotels. For residential developments, including those used for overnight rentals, the study found that a fee ranging from $1.13 to $8.77 per square foot was justifiable, depending on the type of development and on whether it was intended for short-term rentals.
Matt Kowta of BAE Urban Economics recommended that any policy maintain a certain amount of flexibility. That is, if it becomes less profitable to build, the fees could be amended or waived.
“Many jurisdictions try to build in language in their policies to allow for variations in market conditions ... things could change so you want to have some flexibility to allow for that kind of fluctuation,” Kowta said.
City Council Member Karen Guzman-Newton asked what the “temperature” of the room was in terms of the council’s sentiments.
“I’m hot,” said City Council Member Kalen Jones, expressing his enthusiasm for moving forward on the assured housing policy. Other city council members agreed.
“I am grateful that both councils have passed a resolution basically saying, ‘let’s see what this says and then let’s take the right action based on the recommendations. I’m incredibly grateful that we did that step and that we’ve done that together and so now I’m encouraging that we work together to have a unified ... approach as we develop these policies. I’d like to include San Juan County in this conversation as well,” said Mayor Emily Niehaus.
“We have accumulated and acquired some good data but really I think the proof’s in the pudding and exactly how we dial in the policy,” said County Council Vice Chair Curtis Wells. “In the event that the commercial development...because of the formula or how it’s set forth in the policy, if they don’t build the housing and they make that payment in lieu of development, what does that look like? How do we see the city and the county utilizing that capital to get units in the inventory, because there’s a lot of ways that can go.”
The joint councils instructed their respective staffs to begin studying possible assured housing ordinances. The topic is likely to come back up at a tentatively planned Aug. 14 joint meeting of the city and county councils.
County hears rezone
On Tuesday evening June 19, the Grand County Council held a public hearing on a proposed ordinance approving the rezone of 1.35 acres of land located at 1146 S. Hwy 191 from rural residential to highway commercial.
The Grand County Planning Commission previously voted three to two against the proposal, passing on an unfavorable recommendation to the county council. County staff, however, recommended approval of the rezone. The county council will vote on the issue at a future date.
Approximately one-third of the property is zoned rural residential, while the rest is highway commercial. The impetus for the request to rezone the former as highway commercial is due to a building in the rural residential that the owner, Joyce Robertson, would like to use as a short-term rental.
“There is a commercial character to the area,” said County Council Vice Chair Curtis Wells. “You couldn’t add more housing to that parcel in that area right now. The only way development would increase in that area is if zoning densities change.”
There were also two public hearings for a two percent cost of living adjustment for elected officials and county council members retroactive to January. The COLA mirrors that which was passed for county staff on June 5. There was no public comment.
The public hearings will remain open until Wednesday, June 27 at 5 p.m. Comments can be emailed to email@example.com or mailed to Grand County Council, 125 E. Center St., Moab, UT 84532.