City passes PAD but excludes R-2 zone

An aerial view of housing developments near Markham, Ontario.
Photo courtesy of IDuke/Wikipedia

In a vote that surprised city officials including Mayor Emily Niehaus and City Manager Joel Linares, the Moab City Council voted 3-2 on Wednesday, May 15 to approve a scaled-down version of its Planned Affordable Development ordinance, a project years in the making.

Council members who approved the plan said they wanted to see how well the ordinance fared in incentivizing the development of affordable housing around Moab before possibly expanding its scope to the R-2 zone, by far the largest housing zone within city limits.

In its latest iteration, PAD came before the Moab City Council from the city’s planning commission in a more ambitious form than what was passed Wednesday. Notably, that version of the plan included the R-2 zone and did not specify a minimum size for housing units.

Niehaus said during the meeting that “five or six” developers had already expressed interest in using the PAD to construct housing developments in town.

Due to technical problems, the PAD ordinance uploaded by city staff to its website did not show certain changes to the document the council had requested. Because of this, Rani Derasary voted against passing it Wednesday. Kalen Jones also voted no, citing complaints with the process of the ordinance’s passage.

How PAD works

PAD gives housing developers an opportunity to build higher-density housing, such as apartments or townhomes, in areas where they would not normally be allowed. What this higher density means for developers is higher rent and purchase prices relative to construction costs, yielding higher profits.

In exchange for greater profit opportunities, developers who utilize the PAD are required to hold 70% of units to be “affordable,” giving persons with lower incomes in Moab more housing opportunities.

Affordable units in PAD developments must be reserved for people in the lower half of Grand County’s income bracket. People looking to live in affordable units are required to qualify by applying through the property owner. For rented units, monthly rent will be, at maximum, 30% of the area’s median monthly income minus a “reasonable utility allowance,” according to the ordinance. This rent is to be adjusted proportionately using the unit’s size and the income of the persons occupying the unit.

Developers will also have the opportunity to sell affordable units to qualifying buyers; the sales price is determined by calculations outlined in PAD.

R-2 excluded

While reviewing the PAD previously, the city council opted to remove R-2 from the ordinance after receiving complaints from residents who live in the zone. Niehaus has said that she would have been okay with including the zone, but the majority of council members disagree.

The primary concern from residents was that the council might approve higher-density housing developments, such as apartment complexes, in a zone that is ordinarily reserved for single- or double-family homes.

Indeed, residential development density currently allowed in R-2 is second-lowest inside city limits. However, excluding the zone will give developers interested in using the PAD fewer options for where they can build.

Employment requirements

One option for being eligible to rent or own an affordable unit in a PAD development is that a person may be retired and over the age of 60 while also having been “a full-time employee of an entity located within Grand County for at least five continuous years immediately preceding his or her retirement,” according to the ordinance.

This employment requirement in the retirement clause had caused trouble for Grand County as it developed its High Density Housing Overlay, which it passed earlier this year.

According to Community and Economic Development Specialist Kaitlin Myers, language about previous employment prior to retirement was not included in the HDH overlay at the advice of legal consultants. “We received a legal opinion from Parr Brown Gee & Loveless that suggested it would not be legal to discriminate based on the durational residency requirements of the clause (i.e. the five-year full-time employment requirement) because it places a burden on the constitutional right to travel,” Myers said.

According to the legal opinion, if the HDH overlay had disqualified retirees who hadn’t lived in Grand County for as long as other retirees who did qualify, the requirement would “burden the constitutional right to travel” by discouraging non-local retirees who need affordable housing from moving to Grand County.

“This would function to prevent retirees from moving to Grand County in the first place, which would be an impermissible burden on the retirees’ right to travel, unless the restriction can pass strict scrutiny,” Parr Brown Gee & Loveless said in the legal opinion.

Minimum unit size

The council also previously added a minimum unit size requirement for PAD developments. The rule would have originally forced developers to create units no smaller than 400 square feet, about the size of a two-car garage, but the final version allows units as small as 275 square feet.

The change came after the council reviewed proposed plans for its Walnut Lane development, in which 275 square feet was specified as the minimum footprint of a unit.

Had the PAD passed with the higher square footage requirement, the city would have needed to approve a variance for its own development. Council decided after reviewing the plans to reduce the requirement in PAD.