Everything you need to know about ballot measure 2C in Glenwood Springs
Glenwood Springs’ proposed lodging tax, or ballot measure 2C, is estimated to create an additional $1.3-$1.6 million to invest in workforce housing development in the city.
Ballots are being mailed out to registered voters this week. Election Day is Tuesday, Nov. 8.
If passed, people would pay an additional 2.5% tax for all short-term stays in Glenwood Springs, making lodgers pay an overall 13.6% tax on their stay in Glenwood Springs.
For example, if one couple stays in Glenwood for two nights for an overall rate of $200, they will pay $27.20 instead of the $23 in overall tax they would currently pay. If a family stays in two rooms for three nights and has a bill of $1,000 they will pay $136 instead of $115 in overall tax.
These strategies are not intended to promote growth.
“These are strategies that create affordable homes for the workforce by preserving existing affordable homes — like mobile-home parks— or by converting existing buildings into affordable homes,” wrote Clark Anderson, the co-founder and executive director along with the campaign representative for 2C in an email. “The program could acquire a home it deems well priced, place a deed restriction on it and then resell it. This is a faster, and often more affordable way to create workforce housing.”
Here’s what the language specifies:
If approved by voters, 2C would levy an additional 2.5% lodging tax in addition to the current 2.5% accommodations tax. The accommodations tax would not be changed through this measure, and the 2.5% collected for workforce housing development would be added to its own fund, according to the implementing ordinance that was addressed in the city council meeting on Oct. 6.
The language also states revenue would be separate from the general fund and cannot be reverted back to the general fund at the end of a fiscal year. Any investments, interest or deposits must remain in the fund.
The fund can only be used for workforce housing development and can only be used by a person working within city limits, or inside of the 81601 zip code. There is also a 20 year sunset.
The city council will be in charge of appropriating the funds, but the Workforce Housing Fund Advisory Board may make recommendations, and all expenditures will be subject to an annual audit that will be made public.
The monies of the fund may be budgeted, appropriated and expended for the benefit of the Glenwood Springs workforce for housing projects and funding opportunities in and adjacent to the city for the following purposes, according to the ordinance:
1. Property Acquisition, including land banking, rehabilitation of existing buildings, hotel or motel conversions, maintaining mobile home parks and other expenses related to maintaining other existing workforce housing.
2. Forming partnerships with private, nonprofit and other public entities to develop workforce housing, including filling financing gaps and leveraging additional resources to create affordable workforce housing.
3. Buy-downs and incentives, including using funds to defray the cost of existing housing stock for the purpose of affordable workforce housing.
4. Down Payment Assistance, including providing a secondary loan to help potential home buyers enter the homeownership market.
Breakdown of what that means:
This refers to the practice of aggregating parcels of land for future development.
“This is a strategy that communities use all the time that have this type of program in place and allows you to do land banking,” Anderson said. “It allows you to acquire a mobile home park and then recreate that as an affordable neighborhood in perpetuity.”
Land banking can be land collected by both private and public entities. It could be collected or donated to the city, or it could be donated from the city to a private company or nonprofit. It can be acquired from foreclosures and also donations. It is a broad term with a lot of avenues in both the private and public sector.
Public Private Partnerships
Another policy likely to be used to create affordable housing in Glenwood Springs is Public Private Partnerships or PPPs.
This is where a public entity (usually government) works with a private or nonprofit developer to build on or redevelop a location. This can include loans, incentives, direct subsidies put into a project, putting land into a project, assisting with debt financing and more.
These are usually larger projects with 30 or more units, but smaller scale partnerships with local developers or investors are an increasingly popular way to incentivize production of affordable homes, according to Glenwood Springs advisory committee draft findings and recommendations.
One example of a smaller scale partnership is incentivizing affordable Accessory Dwelling Units or ADUs.
Another local example is that Glenwood Springs could use funding on properties they own, such as the former Vogelaar Park property or through creative partnerships designed to provide gap financing that makes it possible to create or expand affordability in other local development projects.
“There’s a variety of different strategies used to close the gap between what it takes to build housing and what our workforce can do,” Anderson said. “That can be direct loans and direct subsidies.”
Buy-Downs and Incentives
Using some of the funds to “buy down” the cost of existing housing stock so that it can be repurposed as affordable workforce housing.
Summit and Eagle County both have examples of buy-down programs and how those can be exchanged for deed restrictions.
The Good Deeds program in Eagle County will contribute 5% to 15% of an eligible buyer’s purchase price in return for recording either a “Resident Occupied” or “Price Capped Deed Restriction”—where the residence’s appreciation is capped on a predetermined basis— against the property.
Housing Helps in Summit County will pay owners, buyers, and sellers to put a deed restriction on homes that are currently unrestricted. Recipients may use funds for down payment, home repairs, special assessments or any other purpose. In return, the recipients are required to execute a deed restriction that will ensure the property is used for local housing, according to the website.
Down Payment Assistance
Adding down payment assistance, which is providing a secondary loan to help potential home buyers enter the homeownership market.
This is typically done through a low- or no-interest loan for those in need. These programs provide assistance to people in need, while also ensuring that the resources invested are replenished through repayment to ensure ongoing, long-term benefit, according to the draft findings sheet.
“One goal you’ll see in our recommendations is to use these types of funds to create long-term affordable units that become part of the housing inventory in the community in perpetuity, aka forever,” Anderson wrote.
This is not how the money will be spent, but is an example provided to Glenwood Springs City Council earlier this year of how it could be spent:
- $335,000 for incentives and buy-downs
- $24,000 each for five Accessory Dwelling Units (1 person residence connected to single family home) = 10 people
- $70,000 to “buy down” and add deed restrictions for three “Good Deeds” homes = 10 people
- Hotel/motel conversions
- $500,000 for ownership housing
- $100,000 for funding gap for five homes = 20 people a year.
- $315,000 for workforce housing Gap financing (5%) $8 million, 20-unit workforce rental project = 45 people a year
- $200,000 down payment assistance
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