Robust market pushes housing projects ahead
March 1, 2017
Last of two parts.
A hot housing market has developers of at least one already-approved apartment project in Glenwood Springs looking to more than double the number of units, and they might not even need a new fee waiver adopted by the city to do it.
The Lofts at Red Mountain, which is part of the larger Glenwood Meadows development, is one of several projects approved or on the table in Glenwood that could take advantage of a new incentive program to waive certain impact fees in trade for some apartments being offered under a 30-year deed restriction to keep rents affordable to middle-income earners.
"We have discussed it, and we are reviewing that," said Dylan Leonoudakis, vice president of development for Realty Capital Management, developers of the planned Lofts project. "We are happy that the city is looking to encourage development of this type of housing."
But a proposal coming before the city to expand from two buildings and 88 apartments, as approved by the city in July 2015, to five buildings and up to 185 units, is being driven by the current housing market, he said. The proposal would serve to build out that portion of the residentially zoned sections of the Meadows.
"We're pretty excited about the market and are looking forward to starting construction in late spring," Leonoudakis said. "There is strong housing demand in Glenwood Springs, as we have known for some time, and we look forward to bringing a quality product that people will enjoy."
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The Lofts, followed shortly by the 116-unit Oasis Creek Apartments on U.S. 6 that also won approval from the city in early 2016, served to spark conversation among city officials about how to provide incentives for developers of smaller residential units, especially rentals.
When the Lofts project won the city's approval, Leonoudakis and his business partner, Richard Myers, were quite vocal about the city's impact fees for such things as water and sewer utilities, parkland dedication, emergency services and schools, being cost prohibitive.
"We are not looking to avoid our fair share of impact fees, but without some relief from the current fee structure there is no way for us to help address the need for quality affordable housing in Glenwood Springs," Leonoudakis wrote in a letter to City Council at the time.
The concerns prompted the city to begin looking at ways to reduce some fees and to provide waivers for any developers who would agree to place deed restrictions on any rental units they proposed to build.
Since then, the city did adjust its water and wastewater system impact fees to encourage construction of smaller units. More recently, City Council also approved a means for developers to qualify for fees to be waived altogether on units that carry a voluntary, 30-year deed restriction holding rents to a level that's attainable for households earning below 120 percent of the Garfield County area median income.
Tenants of those units must also be employed by a business with a physical address within Glenwood's 81601 ZIP code, or have a home business that conforms with city guidelines.
Tyler Richardson of Richmark Companies, developers of the Oasis Creek project, said his group is still working the numbers to see if it makes sense to proceed given current market demand. However, Richardson said the project is not likely to take advantage of the new fee-waiver incentives.
"This is a market-rate project and was always intended to be that," he said.
Another developer who was floating preliminary plans for an apartment project on Midland Avenue, which was ultimately shot down by City Council, had an interesting take when asked if he would make use of the fee waiver incentives. Craig Helm said that, even though rental units in his project might fit the price points for deed restrictions, management of deed-restricted units is a concern.
"It does create a lot of extra work to deal with the administration of that," Helm said, adding that turnover of the units based on the tenant restrictions favoring local workers could be onerous. "Just when you get a good tenant in, they might have to move just because they get a new job outside of Glenwood Springs."
A little over a year after community planners, elected officials, nonprofit leaders and housing experts gathered in Carbondale and El Jebel for a pair of public forums aimed at addressing the shortage of middle-income workforce housing in the Roaring Fork Valley, some progress has been made on the policy front.
In addition to Glenwood Springs' new incentives for developers to consider deed-restricted rental units, as opposed to for-sale homes that carry price restrictions, Carbondale also followed suit by adding rental units to its affordable housing guidelines.
"Up until we put this in place, any affordable housing had to be ownership" rather than rentals, Carbondale Mayor Dan Richardson said of the town's requirement that developers of larger residential projects include deed restrictions on 15 percent of the overall unit mix.
"I think a lot of people now realize that rental housing is part of what needs to happen," Richardson said. "It's important to give developers more tools to broaden our housing availability."
Carbondale has also adopted a new development code that makes it easier for some types of residential projects to be approved. For instance, accessory dwelling units (ADUs), which are residential units tied to a primary home, such as an above-garage apartment, now need only a conditional use permit as opposed to the more-extensive special use permit that was previously required.
"I like that because it's a viable opportunity to provide some senior housing," Richardson said of what are often referred to as "mother-in-law" units. "That's just as much a need in Carbondale as starter housing."
Other ideas that came out of the February 2016 housing forum are also starting to take shape, including a state grant proposal for Carbondale to be designated a Space to Create community, a program that aims to develop affordable housing and/or workspace for people in the creative industries.
Glenwood Springs is also in the process of updating its land-use code, working to streamline the process for development reviews and making it easier for some types of projects to get approved in a more timely manner. And ADUs were also brought up in the context of Glenwood's new rental housing incentives, the idea being to allow deed restrictions to be added to some of the illegal units that exist in exchange for waiving fees.
And, more recently, talks have begun about forming a multi-jurisdictional housing development authority and going to voters within an as-yet-undefined region to secure tax or impact fee funding for purchase of land to build workforce housing.
New building boom?
In the meantime, from Glenwood Springs to Basalt, numerous free-market housing developments and projects with a mix of deed-restricted units are in various stages of actual construction or gathering necessary land-use approvals in order to proceed.
Besides the Lofts at Red Mountain and Oasis Creek projects in Glenwood, developer Peter Waller has approvals for the Cardiff Mesa/Silver Sage project near the Midland Avenue/Four Mile Road intersection. It would bring 55 townhouse and duplex units on line, a dozen of which in the Cardiff Mesa section are to be sold to the Roaring Fork School District as part of its teacher housing program that was approved with a $122 million bond issue.
Glenwood's City Council this week also hears conceptual plans for a 105-unit multifamily project near 27th Street and Blake Avenue, and an eight-unit apartment building in the 1000 block of Cooper Avenue.
South of Glenwood Springs, construction is underway on new homes at Ironbridge, including six deed-restricted teacher rental units that are also part of the school district's program. Approvals are also in place for the 54-unit Buffalo Valley Apartments project and the 366-home River Edge subdivision at Cattle Creek, although those projects have been stalled for more than two years now for various reasons.
Carbondale recently saw the conversion of some of the commercial spaces at the Lines Plaza on West Main Street into residential units. Also, the 27-home Thompson Park project behind the new Ross Montessori School is gearing up for construction, including four deed-restricted for-sale units.
And the school district is preparing new plans for an 18-unit teacher housing project on school-owned land along Third Street in Carbondale.
In the midvalley, 50 apartments being built under Basalt's affordable housing program at the Willits Town Center are expected to be completed and ready to rent later this month. Among those are another 17 deed-restricted teacher housing units that the school district secured. The remaining units are being purchased by the town of Basalt and the Basalt Fire Department for local employees.
Construction is also underway on the 56-unit Roaring Fork Apartments next to Stubbies bar in Basalt, which involves a partnership between developer RealAmerica LLC and the Aspen Pitkin County Housing Authority to provide housing for middle-income earners.
An expansion of the El Jebel Mobile Home Park produced five new modular homes that were occupied this winter, and infrastructure work is progressing to install another 41 units this summer.
Approvals are also in place, though construction has yet to start, on the 156-home Stott's Mill project on the south side of Basalt, 30 units of which would be offered under the town's affordable housing guidelines.
On the planning table yet in Basalt and the Eagle County portion of the midvalley are the 340-home Tree Farm project, a plan for up to 110 new homes near the intersection of Colorado 82 and Valley Road, and Habitat for Humanity of the Roaring Fork Valley's proposal for 27 teacher and workforce housing units behind Basalt High School.
Habitat and other nonprofit developers from outside the area could end up being major players in the future as the next logical step in addressing the valley's housing needs turns to the possible formation of a regional housing development authority.
"The benefits of a regional approach is that we can combine resources among local governments to find optimal locations for housing, wherever that might be in the valley," said land-use attorney Dave Myler, a supporter of the housing authority idea who is helping to lead the effort.
"We have to start thinking of the valley as one community, instead of individual communities that have their own agendas when it comes to housing development," he said.
KT Gazunis, who heads the Garfield County Housing Authority, said her board was also receptive to the regional development authority idea.
The Garfield authority doesn't engage in development and only manages a couple of senior housing properties on the western end of the county. It primarily administers the federal Section 8 rental assistance program and administers deed-restricted units in Garfield County and a few other communities in the region.
It could play a role if a regional housing development authority is formed, Gazunis said.
"We're standing by and will issue whatever support they may need from us whenever they are ready to move forward," Gazunis said of the latest efforts.
She has also been involved in the area mayors and managers meetings, which for the past year have focused discussions around housing policies. One objective that has come out of those meetings is for area governments to commission a regional housing needs assessment.
That's also one of the necessary steps before putting together a regional housing authority proposal, Myler said.
Scott Condon of The Aspen Times contributed to this story.