Glenwood to offer fee waivers for affordable rentals
January 6, 2017
Developers will be eligible for certain fee waivers if they build deed-restricted rental housing for middle-income earners who work primarily in the Glenwood Springs area, under a new ordinance finalized Thursday by City Council.
The move is aimed at providing an incentive to help the city achieve its oft-stated goal to encourage projects that provide a better mix of affordable housing types, including filling the need for dedicated, long-term rental housing.
Any units for which a developer voluntarily places a 30-year deed restriction holding rents to a rate affordable to those earning 120 percent of the Garfield County Area Median Income (AMI), depending on household size, would qualify.
Developers taking advantage of the program would be eligible to have fees waived for water and sewer taps and system improvements, as well as impact fees for schools and fire/emergency services.
“My concern is, at what point do we start giving away revenue streams that we need. It begins to look like we are financing part of a private project with public funds.Stephen BershenyiCity Councilor
A project could be completely deed-restricted, or a certain percentage of units within a larger, free-market development could qualify as well.
"I like that this is a volunteer program, which makes sense," Councilor Todd Leahy said before the unanimous vote to adopt the new ordinance.
"If someone wants to build free-market units and doesn't want to participate, they can do that," he said. "This is just an incentive to hopefully get some rental apartments here."
Mayor Michael Gamba said the elimination of or reductions in impact fees is one of the main tools being discussed in area municipalities to try to address the shortage of affordable rental housing.
"This is a step in the right direction, but we still have a long way to go," Gamba said, adding the ordinance can always be revisited if it's not working, or if the fee waivers prove to be a financial burden on the city.
"Hopefully, it will be a net positive for the city," he said.
The possibility of leaving the Fire Department or the water and sewer utilities short of money needed to pay for system upgrades is a concern.
"My concern is, at what point do we start giving away revenue streams that we need," Councilor Stephen Bershenyi said. "It begins to look like we are financing part of a private project with public funds."
He and Councilor Leo McKinney ultimately voted in favor of the new ordinance. However, both cautioned future councils to closely monitor the fee-waiver program to make sure it's not having an adverse impact on the city's ability to make system improvements and keep up with service demands.
In order to qualify for one of the rental units, in addition to meeting the income guidelines, tenants must work at a place of business that has a physical location within the Glenwood Springs' 81601 ZIP code. Tenants can also have certain types of home businesses as allowed by the city.
If a tenant changes jobs to one based outside the Glenwood area, they can remain through the term of the lease, but they could not extend the lease. The primary tenant can have roommates who are not employed within the city, under the ordinance.
Owners of deed-restricted rental units can apply to convert the units to free market but would have to pay any applicable fees that had been waived before they could be converted.
The rental option could also be used by developers of larger free-market housing projects to satisfy the city's existing community housing ordinance requiring that 15 percent of total units offered for sale be deed restricted to target certain income categories. That ordinance has been suspended for the past several years in an effort to spur new housing development.
Councilor Steve Davis said he would also like to see both existing and future accessory dwelling units, or so-called "mother-in-law" units, associated with single-family homes, be allowed to take advantage of the fee waivers by adding deed restrictions. Council is expected to address that issue with a follow-up ordinance at a future meeting.