President - Alan Kosloff     Secretary - Ellie Caulkins    Treasurer - Patrick Gramm    Executive Director  -  Jim Lamont

Directors:  Judith Berkowitz  -  Dolph Bridgewater  -  Richard Conn  -  Gail Ellis  -  Eugene Mercy 

Bill Morton  -  Trygve Myhren  -  Gretta Parks  -  Emeritus: Bob Galvin



To:       Alan Kosloff, Board of Directors and Membership

From:   Jim Lamont

Date:    February 22, 2007

RE:       Status Report - Affordable Housing Impact Fee Proceedings 


Last week's PEC meeting was contentious.  At their meeting, in late January, they had asked for more information, including an affordable housing plan.  Most of their requests parallel those we had raised in our January VVHA report that had been presented to them.  The staff returned with a rhetorical reply containing no factual data or plan.  The PEC was not happy and insisted that their request be met.   


The staff put the idea before them, that the Inclusionary Housing and Commercial Linkage impact fees should only be imposed in the higher density mixed residential/commercial zone districts.  They also discussed the pros and cons of increasing property taxes or redistributing RETT (Real Estate Transfer Tax) to fund affordable housing.


The PEC made no decision on the affordable housing impact fee, due to lack of adequate information.  VVHA has taken the same stance.  Until sufficient information is available, we cannot make a final recommendation. We are also awaiting a technical analysis by representatives of the local development industry to evaluate the economic impact of the proposed fees. 


A draft ordinance will be before the PEC at their next meeting.  Council is intent on adopting a final ordinance in April.   


I spoke at the PEC meeting on the historical issues, how previous plans had been adopted by the Town Council, only to be thrown out by their successors or the electorate.  If the affordable housing impact fees are unworkable, but adopted by Council, it most likely will become a major issue in the November Council election.   Also raised, was the issue of part-time residents' substantial contribution to the local economy and the disproportionate impact fee being considered for residential rather than commercial uses.  We pointed out the political weakness of going for a property tax increase and that RETT has already been reallocated for the purpose of environmental clean up projects.  It has been reported that Eagle County will most likely go for a property tax increase to fund affordable housing this year.


PEC members seemed more attuned to the part-time residents significant contribution to the local economy (as per local Council of Governments study) than some of the members of the Economic Advisory Council, whose meeting we attended.  At that meeting, it was clear that the social engineering strategy proposed by Councilmen Moffet and Gordon to provide housing for professional class families would not go down easy with the business community.  The businesses represented at the meeting appear to prefer affordable housing for low-wage transient workers. 


The key point to note is once the Inclusionary and Commercial Linkage impact fees are imposed on large scale developments, the Council will be back, using an Residential Linkage impact fee, to collect from all other residential owners, including all new construction in single family to medium density residential zone districts.  Currently, they have backed off on imposing an impact fee on these zone districts because of the political furor their Inclusionary Impact Fee caused from local homeowners and small residential developers.


This is important to note because there is growing concern that there are few places to put a large amount of affordable housing.  There is growing support to put more of the housing on-site in high-density mixed use (commercial/residential) zone districts.  As a consequence, developers will house their own people in the housing they are required to provide.  This probability leaves no money for the TOV to spend on affordable housing, unless they collect it through a "pay-in-lieu" impact fee.  Already developers are looking for more height and density (GRFA). The Council does not appear ready to make increases to any great extent.  The Council will most likely hold the line on increases because they want the pay-in-lieu fee so the Town of Vail itself can buy up existing residential units in Vail and elsewhere.


Where they are going to find housing in the immediate region is again problematic.  Figures presented by the TOV staff, indicate that to provide housing for foreseeable employment demand in Eagle County, there is the need to build the equivalent of several new towns of 5,000 population each.  There is limited land to accomplish this feat.  Timber Ridge even when redeveloped at twice its current capacity will probably for the most part serve current demand from Lionshead projects already under construction.  Similarly, Vailís desire to house 30% of the workforce amounting to 1400 employees.  The primary challenge is where to physically locate the housing for this many employees in the community.  Additional housing and services will be required because to some degree these employees will have non-working dependents that must be accommodated.  In the long run the policies and impact fees under debate will bring major change to the character and political life of the Vail community. 


In forming the foregoing observations and conclusions, consultations have been conducted with a variety of sources involved with this and related issues.