Basalt ponders easing affordable housing requirements
September 29, 2015
Basalt town government is considering substantially decreasing the amount of affordable housing it requires developers of new projects to provide.
The Basalt Town Council is scheduled to vote tonight on a recommendation to reduce the affordable-housing requirement from 35 percent of a project's total residential floor area to 25 percent. For commercial projects, it will consider lowering the affordable-housing requirement from 25 percent of employees generated to 15 percent.
The stricter requirements were in place throughout the recession. The town is considering less strict rules as development activity is heating up throughout the valley. The impetus is a recommendation from a consultant hired to update the town's housing-needs assessment.
The consultant, Economic and Planning Systems Inc., concluded in a March 5 report that the town needed to provide at least 200 affordable-housing units over the next five years to keep up with demand.
The study found that 75 percent of workers at the town's five largest employers didn't live in Basalt. Of those employees, 85 percent would move to Basalt if it were more affordable, according to a survey.
One step to spur construction of affordable housing advised by the Denver consultant was lowering the affordable-housing requirements on developers. The report raised a red flag over Eagle County having lower affordable-housing requirements than Basalt.
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"While set-aside requirements range in resort settings between 20 and even 60 percent, typical set-asides generally fall between 10 and 30 percent for most municipalities with such a policy," the study said. "Misalignments within single markets, such as the town's 35 percent set-aside and the county's 25 percent, can create market distortions that lead to development choosing not to do business with the town."
Economic and Planning Systems also advised Basalt to target sale and rental affordable housing to a wider range of residents, including those with lower incomes. The town currently uses a target income range of 120 percent of the area median income to set its affordable-housing sales and rental rates.
The consultant advised using 100 to 140 percent of area meridian income to establish sales prices of between $200,000 and $320,000. It advised drastically reducing the rental rates to 50 to 100 percent of area median income. That would result in rents between $800 and $1,600 per month, according to the report. That would be the biggest benefit for the town's expanding number of low-wage workers, the study said.
The town staff isn't recommending such a drastic change in the target income range. It is advising the council to approve an ordinance that would use 100 percent of area median income as the basis for sales prices and rents. The staff memo didn't say why the consultant's broader recommendation wasn't followed.
To get at least 200 units of affordable housing constructed, the town staff is advising the council to offer incentives for projects. The council should consider waiving development review fees, building-permit fees or water-tank surcharges, the staff memo said.
The Town Council meeting starts at 6 p.m. at Town Hall. The review of the affordable-housing requirements is scheduled to begin at 7:10 p.m.