Grand County staff and elected officials spent many hours in research, meetings, and discussions in the months leading up to the passing of the High Density Housing Overlay in January 2019. The overlay is designed to allow higher housing density on included lots than the underlying zoning areas, provided that 80% of the housing units are deed-restricted for Grand County primary residents and employees.

The deed-restriction was intended to prevent housing from going to second home-buyers or overnight rentals and pricing out local residents in need of housing.

However, differing interpretations of the policy are causing conflict between county staff and some developers in the HDHO process. Does the deed restriction mean the property owner must be a Grand County resident, or could the unit be owned by a nonresident so long as it is occupied by a resident? Some developers say their project financing hinges on the answer. The topic dominated the Feb. 16 Grand County Commission meeting.

Background

Affordable housing availability has been an issue nationwide and in Grand County for years. Elected officials and nonprofits have, in response, been working for years to create solutions to narrow the gap between income and rent and home prices. [See “Closing the gap,” Feb. 6 edition. -ed.]

The high density housing overlay was intended to be one of those solutions, with the goal of increasing access to housing for Grand County workers and residents. Part of the appeal of this approach for community leaders is that there are no explicit income thresholds or price caps for administrators to track and enforce.

Instead, by narrowing the market for these units to buyers who earn an income in Grand County, the price would naturally be dictated by what Grand County earners can afford. Developers responded enthusiastically to the incentive and nearly all of the 300 units allowed under the ordinance have been applied for by prospective builders.

However, some developers remain confused about whether it’s ownership or occupancy that dictates if a project is meeting HDHO standards.

County staff drafted a Rules and Regulations document clarifying that the owners, not just the occupants, of HDHO units must meet the qualifications of residency and employment laid out in the ordinance. This document went before the commission on Feb 16.

Some developers have claimed this is a policy change to their previous agreements, but County Attorney Christina Sloan told the commission that the regulations clarify, but do not change, existing policies.

“This is not an amendment to the use code,” she said. “This is not a legislative action, this is not law. All we're doing here is clarifying the provisions that are already in our code.”

Contention

Steve Evers, one of the owners of the 34-unit Murphy Flats development approved under the HDHO, spoke at the Feb. 2 commission meeting to ask the body not to approve the rules and regulations document.

“We determined the financial viability of this project with the understanding that nonresidents can purchase units, so long as a resident occupied it,” Evers said, speaking of Murphy Flats. He believes the county land-use code supports this understanding. “Some nonresident buyers will be needed to fund this project,” he told the commission.

Kaitlin Myers currently works for Moab City as a senior projects manager, but in her previous position with the Grand County Community and Economic Development Department, she was deeply involved in the development of the HDHO.

Myers joined the Feb. 16 Zoom meeting as a private citizen. She said that in her view, developers should be able to sell homes developed under the HDHO to nonresident buyers, as long as the home’s occupants are Grand County residents.

“Our intent as staff when developing this ordinance was to restrict the occupancy or the use of the units to primary residents in active employment, not to restrict HDHO units and lots to be exclusively owned by actively employed households,” Myers told the commission. She said that staff had assured developers that this was the case.

David Hirschi of the legal firm Hirschi Baer & Clayton represents the owners of the Peak View development.

“Our position is that these proposed rules constitute a legislative amendment to the land-use code without due process,” Hirschi told the commission, and in a letter implied that if the rules were adopted a legal challenge was likely.

The HDHO process happened before Sloan was elected as county attorney. She stated that she had reviewed hours of meetings recorded in 2018 and 2019 to get a clear idea of the drafting process.

“Ownership is emphasized throughout,” Sloan said. In one instance, a cap on home prices was determined to be unnecessary because the homeownership requirement would deflate prices to what local workers can afford.

“Without the ownership requirement, that entire concept implodes, and then these units become just like every other housing unit we have,” said Sloan.

Sloan warned the commission that regardless of what action the body takes, litigation is a real possibility from either developers or Grand County residents in rural residential zones, who could sue the county if nonresident buyers are allowed to purchase HDHO units. She announced that the city had been served with a lawsuit from opponents of the recently approved Creekside Estates PUD amendment. [See “Just what is ‘rural character?’” Feb. 11, 2020 edition. -ed.]

However, she considers the county to be in a defensible position regarding the original HDHO language.

“What we've got to do first is look at the plain language of that statute, and I think that's enough,” she said.

Grand County Planning Commission Chair Emily Campbell described the HDHO as a path to ownership for young, stable families to plant roots and invest in the community, rather than provide more rentals for seasonal workers who must live communally to afford the rent.

“People can have four or five roommates and live in a house—that's not an affordable situation,” said Campbell. “The fact that somebody can make it work isn't the same thing as actually creating attainable housing for people who live and work in Grand County—and who want to stay and live and work in Grand County.”

Commission Chair Mary McGann expressed dismay that after so much work had been put in to designing the overlay, such a consequential issue could come up “at the 11th hour.” She specifically acknowledged that the Murphy Flats and Peak View developers, all residents of Grand County, had been deeply engaged in the process.

McGann moved to table the discussion.

“I would like more time,” she said. “I don't think it will hurt.”

The commission voted unanimously to table the document.

However, commissioners did indicate support for passing the rules and regulations clarifying that the HDHO designation requires both ownership and tenancy of Grand County residents, based on Sloan’s analysis.

“I want to reiterate: This burden has been put on rural residential residents,” noted Commissioner Trisha Hedin. “I think those residents are more than willing to provide workforce housing, but not second homes and not, you know, Airbnbs.”