How will “housing mitigation” help us?

Housing mitigation is a key piece in the puzzle of how to make it possible for us to live here. It means that new development has to build (or pay for) workforce housing, instead of making things worse. The town and county have asked for public input on a series of questions as part of their Engage2017 planning work. The ShelterJH policy team dug deep into the questions and wrote the following letter to our elected representatives. We hope it helps explain what mitigation is and how it can help. Make sure to share your ideas with the Town Council and County Commission! Contact us with any questions at info@shelterjh.org, and please become a member and build our power today!

Re: Housing Mitigation Policies

Dear Mayor Muldoon, Town Councilors, and County Commissioners:

Thank you for the opportunity to comment on your housing mitigation policies. ShelterJH is a membership organization that works to ensure that all who work in Jackson can have a home here.

As you know, our housing crisis is getting worse. We’re losing affordable homes every year to rent increases, vacation rentals, and gentrification. Every day we lose more of our essential workers to surrounding communities. More teachers, nurses, cooks, dishwashers, and police (and everyone else) are commuting from places where they can afford the rent or, if they are lucky, buy their own homes. When people commute, we lose critical service providers on-site, and we lose volunteers and active members of our community. Therefore, as we consider changes to housing mitigation polices, we should always ask what the changes will do for our workers and community – especially our community members in the most vulnerable situations.

One of the main reasons we have a sizable stock of affordable/workforce housing is that developers have provided homes as part of their developments. Lacking this tool, we would be in a far worse situation. And, it has become increasingly clear that even our current requirements are too low – our housing need keeps increasing as our overheated tourism industry continues to create new low-paying jobs.

We believe the policy questions, as written, are difficult to understand – even for housing industry veterans – so we hope that you will forgive any misunderstandings as we attempt to answer them. We recommend that you establish a housing expert task force – different from a “stakeholder’s group” – to provide clear guidance on these policies after you receive public input.

1. What segments of the workforce should housing mitigation be for?

1B: housing mitigation should cover both year-round and peak seasonal employees.

Note: existing residential inclusionary zoning is a completely different policy from mitigation, so the status quo is actually that commercial mitigation only covers peak seasonal employees.  Lumping these two separate and distinct policies together (inclusionary zoning and commercial mitigation) is confusing, and we should clearly distinguish their purposes and use. See questions 3/4/5 below.

2. What portion of the workforce generated by development should be housed through mitigation? (the rest will be housed through other tools, or commute)

2A, with a caveat: we should mitigate for 65% of all workers, because that is our housing goal. It is important to mitigate for workers of all income levels that can’t find free market options, which includes people earning up to 200% area median income (AMI). We do not believe it is legal to require mitigation for more than 65% of our workers, as that is the level we need to “keep up” with our goal. The community will need to use other tools to “catch up” to our existing need, such as SPET measures and incentive zoning.

3/4/5. How should the housing mitigation requirement be imposed?

3/4/5C: All housing mitigation should be done through employee generation mitigation requirements. Inclusionary zoning is a different tool that exists to prevent exclusionary zoning (whether by policy or de facto) and should be used with any annexations or complete neighborhood expansions. Mitigation requires a nexus, which is what your Employee Generation Study provides. This is probably the most important aspect of your mitigation policies, and we offer the following recommendations:

Require commercial mitigation for all employees generated. Currently, commercial mitigation only applies to the peak seasonal employees generated.  This leaves out all the year-round employees that the new business generates.  All employees have an impact, not just peak summer and winter season employees. New commercial development should be mitigating for all of them.  A mechanism to provide reductions from this standard for small businesses could be incorporated, such as the one used in Aspen that scales the requirement based on number of employees generated.

Increase mitigation on commercial development with commensurate density bonus. The current mitigation rate only requires a small portion of the employees generated to be housed, which transfers the burden to the community to create this housing.  Requiring a higher mitigation rate in conjunction with an increase in FAR allows a developer to create the required housing on-site which can remain an asset for the success of the new business long-term and provides housing options for more of the employees generated.

Reduce mitigation categories & use average rates. Currently, there are many categories for commercial mitigation – office, retail, restaurant/bar, lodging, etc. We recommend combining and averaging some uses that currently trigger change of use fees. Categories may include: residential, lodging / short-term-rental, nonresidential, institutional/public/semi-public.

Eliminate change of use mitigation with existing structures. When a use changes within an existing structure, it may trigger a mitigation fee.  This impacts existing businesses and discourages new restaurants, which have a much higher mitigation rate compared to office or retail use.  It is also complex and resource-intensive to manage.  Instead, average the mitigation rates and assess at time of development to eliminate the change of use fees.

Require mitigation on market-rate residential development. Market-rate ownership product is out of reach for all but a few local employees and more often provides an option for part-time or seasonal residents. These transient occupants generate more service employees than a home occupied by a full-time resident. Mitigation rates should reflect the increased impacts from market rate residential development. A mechanism to provide reductions from this standard for local occupancy could be incorporated, such as a recorded document used in Summit County, Colorado.

Require 1-for-1 replacement of any existing workforce housing units. Our housing mitigation rules should require 1-for-1 replacement of any workforce units destroyed during development. This is different from, and additional to, mitigating the workforce generation of the new development. Some new development both knocks down existing affordable/workforce housing and builds new high-end homes or commercial use that require mitigation. For example, the Marriott hotel knocked down a number of de-facto-affordable mobile homes. For easier explanation, imagine a simpler project: a developer buys a single lot with one mobile home. They knock down that home and build 4 new homes. One of the new units has to be affordable based on mitigation – but that just keeps up with the 3 new market-rate homes. But before this development, that parcel was net positive +1 workforce home. After the development, our community is worse off than before. As a result, we should require that developers replace any workforce units. The way to define which units count as workforce units is to use the same list as in the “exempt workforce housing uses” shown below in question #8.  

6. What type of housing should be provided through housing mitigation requirements?

6C: All mitigation housing should have minimum and maximum standards. All units should have access to kitchens and bathrooms (even if shared such as in a dormitory building). Allow the developer flexibility in the provision of unit types and tenancy (ownership or rental) to enable the required units to better meet the needs of the business long-term.

The methodology to calculate the requirement and the resulting mitigation should be square footage based instead of bedroom/occupant based. To simplify the code for development professionals and the public, the town and county regulations should be the same.

7. What methods for providing required housing mitigation will be allowed and preferred?

7C: Prioritize new on-site units for developments in complete neighborhoods. Our biggest challenge in creating new housing options for local workers is the availability of land in complete neighborhoods. Allowing units to be built off-site results in fewer locations to meet our workforce housing goals. Fee-in lieu and the purchase of “credits” should be prioritized for developments outside of complete neighborhoods to enable construction of units in appropriate locations and consistent with comprehensive plan goals.

Establish a “credit” system which allows developers that are not accessing public funds to build additional workforce housing in their project and allows them to sell “credits” for these additional units to other developers to meet their housing requirements. This encourage developers to build more workforce housing in their projects similar to the program used with Powderhorn Employee Housing. Set stringent standards for the use of existing housing stock to ensure a net gain in the supply and quality of workforce housing inventory.

8. What types of development should be exempt from housing mitigation requirements and why?

8B: Exemptions to encourage the private sector to produce workforce housing have been successful and should remain.  This includes housing units restricted for the workforce in some way, even though they are not restricted for affordability, such as accessory residential units, any housing bonus incentive, mobile home parks, rental apartments of a certain size, and alternate restrictions used by non-profit housing organizations and businesses.  These exemptions act as incentives to encourage the type of development that creates housing options for local workers.  Unless an appropriate deed restriction is added, these alternative approaches should not be allowed to meet the housing requirements of the new development or another development.

Please eliminate exemptions that do not provide workforce housing. Current exemptions that should be eliminated include live-work, one lot split of a residential lot into two lots, and the first 2,500 square feet of single-family dwellings. A mechanism to provide relief from this standard for local occupancy could be incorporated, such as that used in Summit County, Colorado. Additionally, Institutional Uses should not be exempt from the housing standards as currently is the case.

Please eliminate the “credit” in redevelopment for existing residential unless it can be shown that the new residential use will be similar to the old residential use. Compliance with the “rough proportionality” standard is important. However, the exemption for existing uses prior to the adoption of the requirements should be amended to reflect the true impact of replacing existing residential (that houses local workers) with new residential (that targets part-time residents). This is to stop actions such as what happened with the Marriott knocking down affordable trailers and somehow counting those affordable trailers as “credits” against their housing requirements. The new residential built no longer houses local workers and instead 1-bedroom penthouse condominiums are listed between $1,200,000 and $1,602,000. These units are obviously not targeting local workers, and the employees generated from non-local tenancy condominiums is higher than local resident single-family. Therefore, impacts can be assessed and mitigated while preserving the “rough proportionality” standard.

9. What type of relief from the housing mitigation requirements should be allowed?

9A: “Relief” should only be allowed inasmuch as it is legally required. Consultants can always provide an “independent calculation” showing that their project is unique and should provide less than normal mitigation. We should discourage this as much as possible and require some form of long-term assurance that the actual impact is commensurate with the “independent calculation.” Also, the term “relief” makes it sound like housing mitigation is a bad thing, when in fact it is a positive policy that we need to keep Jackson the place we know and love.

10. How should the updated mitigation requirements be applied to approved, but not yet built, development?

10B: If a project has not been built after many years, new requirements should apply. Additionally, out-of-date masterplans should be updated with new housing requirements when possible (at any time of re-negotiation).

Thank you for your consideration on these extremely complex issues. Again, we respectfully recommend that you form a housing expert task force, and we offer our participation. Please be in touch with any questions.

Sincerely,

Christine Walker

Policy Team Chair

ShelterJH