Rani Derasary responds to three housing questions

The Times-Independent asked each of the ten remaining candidates for Moab City Council three questions regarding housing and taxation. Seven of the candidates responded, two of them after press time. Here is a link to the full story.

Rani Derasary

How do you plan to close the gap between rents and incomes in Moab? Is the right approach to raise incomes, lower rents, or both? How would you do either of those things?

First, we need to understand that this is a multi-faceted issue that is not new. The community has had a gap between wages and housing prices for some time. Factors contributing to the “affordability gap” (ie, the difference between wages and housing costs) include a combination of low wages, low housing supply, and the role overnight rentals and second homes play in driving up housing and rental prices. In terms of the City Council, let’s focus on what things the City can and can’t do:

Many people have asked me why the City doesn’t set a living wage, but unlike in some other states, it’s been my understanding that Moab can’t set a minimum wage of $xx that all employers in town must abide by. Rather, the Utah Legislature holds the power to raise the State’s minimum wage. For years, legislators have tried to garner support from colleagues for an increase. For example, House Minority Leader Brian King in 2018 advocated for legislation to raise Utah’s baseline salary from $7.25 to $12/hour (by July 2022), but the effort lacked adequate support. Though prior attempts have failed, I do think increases are something residents should continue to push our State representatives and senators for. If residents let us know they are passionate about this issue, the Council can make this issue one of our lobbying priorities for the 2019 interim/2020 legislative sessions.

What the City can also do, is set an example for other employers in the community to follow by virtue of what we pay City staff. Along those lines, the City hired a consultant to do a comprehensive salary survey for us in 2016, something that hadn’t been done in 19 years. Goals included generating a uniform and equitable pay plan consisting of minimum and maximum pay rates for positions. Staff were invited to participate, and a 12-employee salary survey committee was formed with representatives from each department; jobs were weighted based on Job Knowledge, Responsibility, Difficulty and Work Environment; and wages for comparable work in other parts of Utah were reviewed. Consultant Personnel Systems, Inc in turn presented their findings and recommendations to Council in detail at year’s end. One big takeaway was that many of our entry level pay rates were below market. The Council voted for recommended increases, which placed our lowest starting wage at $15.61/hour. Since this time monies have also been made available to the police department for recruitment and retention challenges related to our housing costs.

The City also lacks the statutory authority to decree what rent levels property owners charge. An exception would be if a property fell under the PAD or Assured Housing ordinances, which guide the construction of a set number of affordable units based on AMI (average median income) levels. The City can control rents at any rental property we own, such as Walnut Lane, and I am an advocate for the long-term deed restrictions that will retain low rents there.

The Council is constantly seeking out examples from other communities that we can learn from and replicate. Recently the Vail InDEED program and Good Landlord programs have been noted, and I’ve had discussions with some of you about programs that help folks in specific professions (eg educators, health care workers etc) rent to own housing. I’m hoping we’ll have more staff resources to advance these ideas moving forward and urge anyone interested to contact us with other ideas since our breadth of knowledge is only so large.

While it is ultimately up to individual employers – should someone like the Chamber of Commerce, Moab Business Resource Center, County Economic Development office or even individual Council members want to take this on – I could see the value in facilitated discussion between local employers and employees to network and: 1) help employees understand the cost of running a business and how wages play into that – to help them understand the upper limit of wages; 2) help employers understand how competitors are offering to pay higher wages and benefits to staff, and how they might learn from each other; 3) discuss how staff and employers can work together to raise wages in town in the most sustainable manner for all over the long-term.

Finally, we often note as a Council that in Moab “housing is economic development,” how economic development is limited by housing challenges, and how sufficiently compensating staff helps with retention and recruitment. There is an aspect of personal responsibility here for all of us to consider. Every one of us can choose to support or change the status quo with our personal spending: we each have the option to focus spending our dollars at those businesses who do a good job supporting their employees.

A significant reason the city has unaffordable rents is low-density housing. Much of the city is zoned for single-family houses, which are unaffordable for most residents. The zones for apartment complexes and other high-density housing options are severely limited. Do you view this as a problem? How would you address it?

First, it oversimplifies our situation to draw such a strong correlation between density and unaffordable rents. We’re dealing with the free market, so nothing guarantees that just because you build more rental units, that they will be cheaper. Yes, theoretically, prices tend to decrease as supply increases, but we have such a backlog in supply and such a large number of low-paying jobs, I’m not sure you can assume you’ll automatically see lower rents, or low enough rents that free people from being cost-burdened. Review the Affordable Housing Plan or BAE information on what local residents can afford without being cost-burdened. Will market-rate builders be willing to rent at those rates?

Furhtermore, as long as people with relatively high outside incomes continue to move to or invest in Moab, many will be able to afford more for units than our average wage earner. My point is, to get lower rates, you likely need provisions to limit the sale/rental to local residents, as will be the case under the PAD ordinance. Additionally, as you increase supply, unless you deed-restrict units based on affordability, you won’t significantly help reverse our affordable housng supply problem long-term.

Also, we’ve spoken for ages about of the lack of long-term vision in Moab – of “Moab not knowing what it wants to be.” Committing City resources to a community-driven vision could help us revamp our zoning maps to better reflect what land uses fit best where moving forward, all of course within water supply limitations and with respect for property rights. This would help us discuss the best way to fold density in. Most folks would agree there’s demand for more apartments in Moab, but we also have demand for other sizes/forms of housing. This is why Walnut Lane redevelopment and Moab Area Community Land Trust ideas contemplate multiple types of housing size and style. The Moab Affordable Housing Plan, likewise, calls on us to consider the transitions a Missing Middle can provide. No one wants folks commuting to Thompson or La Sal. I think you’ll find we’re all looking for ways to house more people in the valley, with walkability, bikeability and transit in mind. Finally, I think you can’t have a frank conversation about density and future apartment provisions without asking why at least one such development the City approved years ago still hasn’t been built.

The City of Moab does not directly benefit from increasing property values because it does not levy a property tax, making it largely dependent on tourism for tax revenue. Should the city levy a property tax? Explain.

I believe it is time to have an educational discussion about this between the Council, staff and community for multiple reasons: a) it’s always deemed wiser to diversify your income stream; 2) we learned recently that the City could qualify for better rates for certain loans if we had a property tax – than without one; and 3) starting with last winter’s 2019 legislative session, the City was confronted with numerous unknowns about how upcoming decisions at the State level may impact City sales tax revenues as we know them. Some of the changes discussed over the winter would have resulted in dire cutbacks for the City given our reliance on sales tax in the absence of a property tax. (All Grand County residents – including those in City bounds – indeed pay a property tax to the County, but in most municipalities in Utah you also pay property tax to the City. In Moab we don’t do that.)

There are a few things that need to happen to help us decide whether to levy a City property tax: we all need more information; Council and staff need to participate in discussions at the legislature about options for sales tax changes so legislators clearly understand which options devastate us, which are neutral, and which are beneficial; residents need to learn more about the City’s current income stream, how current taxes (like transient room tax, resort community tax, etc) benefit them, and pending sales tax changes (the City will be providing more information on this topic for the public shortly); and, after all that, we need to have public meetings to help us all understand the pros and cons of sticking with no City property tax, adding a tiny one to start, or considering something larger. This would be the most responsible and transparent process moving forward in my opinion given the information I have thus far. It will serve us all best in the long run to have these conversations starting now, as opposed to scrambling at the last moment should the State make changes harmful to us.

I urge anyone interested in the issue of these sales tax changes to attend the Saturday, July 20 public meeting which the Utah Tax Restructuring and Equalization Task Force is planning at the Grand Center (open house 1:00pm; town hall 2:00pm). Look for additional details in local newspapers and on the City Facebook and web pages in advance of that.