Council resumes utility impact fee discussion
A proposed change in the way water and sewer impact fees are assessed, aimed at cutting costs for developers to build smaller, multi-family residential projects, goes before Glenwood Springs City Council tonight.
Last month, council voted 4-1 to lower the overall rate charged to developers. Those fees are meant to help pay for future water and wastewater system improvements.
While the sewer impact fee increased by about $900 per residential unit, or equivalent (EQR), the fee for water system impacts went down some $2,255 per unit.
Council also revised the definition of EQR for purposes of assessing the fee, lowering it to 350 gallons of water or wastewater per day.
How that EQR rate gets applied to different size residential units within a development is what’s now before council as it looks for ways to encourage more multi-family, and particularly development of smaller rental units, that could be more attainable for middle-income workers in the area.
The fees discussion has been going on for several month now, sparking a broader conversation about what role, if any, the city could play to address the shortage of affordable and attainable housing in Glenwood Springs.
“Council seeks to incentivize the immediate construction of multi-family residential housing,” acting city manager Andrew Gorgey explained in a memo outlining the question on the table for tonight’s meeting.
“It is possible that modifications to the EQR schedule, together with the changes to water and sewer impact fees, may produce the incentive,” he said in framing the discussion.
The city’s only formal “affordable housing” program involves the requirement of deed-restricted units geared toward specific income levels as a percentage of a larger residential development, called “inclusionary zoning.” Since its adoption, though, only seven affordable housing units have been built in city limits.
That provision of the city’s development code has been suspended going on five years now, in an effort to spur more residential development in town. But it’s been to little avail, prompting City Council to take a look at impact fees instead.
“The most successful project to provide affordable housing in the last 20 years was not the product of inclusionary zoning,” Gorgey notes in his memo.
That was the 60-unit Glenwood Green Apartments at Glenwood Meadows, which offers income-restricted units for rent using federal tax credits under HUD guidelines.
Those units are reserved for households making between 40 percent and 60 percent of the area median income. The city did waive certain impact fees to help make that project a reality.
But council would now like to see more free-market rental units built that can be marketed to middle-income earners.
Some council members have argued, however, that without a requirement that rental units be maintained within a certain price range, developers should not be receiving breaks on fees.
As proposed, the new EQR rate would be applied differently to smaller units up to 1,000 square feet in size, with a separate ratio for units between 1,000 and 1,500 square feet.
“A provision has also been added to provide a 50 percent reduction in the EQR schedule when secondary raw water is used for irrigation,” according to the proposal on the table for council to consider.
Only five of the seven City Council member will be allowed to participate and vote on the issue, however, after conflict-of-interest questions arose earlier during the fees discussion. Council members Todd Leahy and Leo McKinney, who both own residential properties that may be developed in the near future, were advised to step down from the discussion.
The regular City Council meeting begins at 7 p.m. tonight at City Hall, 101 W. Eighth St.
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