Glenwood trims fees to boost housing
Besides approving a new 116-unit apartment project Thursday night with some major design concessions, Glenwood Springs City Council also took another step to try to spur development of more multifamily housing in town by reducing impact fees.
Council finalized its nearly year-long, detailed review of water and sewer impact fees, ultimately agreeing 5-0 to approve a new fee schedule that it believes will help lower costs for developers to build smaller types of residential units.
Earlier this year, council agreed to lower the overall single-family home or equivalent rate (EQR) charged to developers for long-term water and wastewater system improvements. It also revised the definition of water usage for each EQR for purposes of assessing the fee, lowering it from 490 to 350 gallons per day.
Council has since been wrestling with how to apply that rate to smaller units in multifamily projects — typically studio, one- and two-bedroom units of 1,000 square feet or less — to better reflect actual water usage for units those sizes.
The idea is to charge a system impact fee that’s more directly tied to average use for those types of units. Mayor Mike Gamba who, as a professional engineer with some knowledge on the subject, ran some numbers and came up with a proposal that was accepted by the other council members.
Compared with a typical single-family, detached home, “smaller multifamily units are going to use different amounts of water,” he said.
Gamba said he researched four years of use based on meter readings at six apartment complexes in Glenwood Springs and found the average use ranged from a low of 61 gallons per day at the newer Glenwood Green Apartments to 344 gallons per day at the much-older Machbeuf Apartments in West Glenwood.
The vast difference is likely due to the fact that newer construction has more efficient plumbing fixtures, he said.
Looking at the data on a per-bedroom basis, use ranged from 44 to 119 gallons per bedroom, he explained to council members during a pre-meeting work session Thursday.
Using that information, he proposed that the city’s EQR rate for those size units “should probably be above the average, but it shouldn’t be at the maximum,” Gamba said, suggesting a rate of 0.25 EQR per bedroom. The equates to an average daily use of about 87.5 gallons of water/wastewater, he said.
Councilor Stephen Bershenyi had objected to the initial overall fee reduction. He went along with the revised rate schedule, but offered a word of caution, as did Louis Meyer, the city’s engineering consultant who prepared the latest fees analysis.
“At some point these fees are what help pay for infrastructure improvements,” Bershenyi said. “My fear is, if we drive the fees too low, we put ourselves in a position where we’re faced with a big infrastructure bill that we won’t be able to pay.”
Meyer said municipal water providers across Colorado are wrestling with the “true cost of water.” His analysis was based on peak demands, rather than average daily usage.
“I don’t know how you pay for future infrastructure if you’re not funding 100 percent of your depreciation,” Meyer said.
One developer said the fee reduction for multifamily units should be even lower than what the city ended up approving.
“We’re very excited about starting construction,” said Dylan Leonoudakis, vice president of development for Realty Capital, developer of the approved 88-unit Lofts at Red Mountain mixed-use project at Glenwood Meadows.
“But before we can do that, we have to be able to raise the funds and get costs in line with the market,” he said.
The Lofts developers first proposed a 60 percent across-the-board reduction in all impact fees, including those assessed for fire protection and other emergency services, as well as for public school impacts. They said the project was not financially feasible to build with the fee reductions.
Gamba said the flip side of encouraging development of more residential units is that it will bring more water and sewer users into the system who will pay the regular utility rate for usage. That should help offset the impact fee reduction, he said.
City Council, in two weeks, will delve into fire department impact fees. A similar analysis of those fees has determined an increase may be needed to pay for future system improvements, including new equipment, station upgrades and water system upgrades for firefighting purposes.
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