Commissioners Corner: A semimonthly column from your board of county commissioners
Twice a month your Grand County Board of County Commissioners, including Merit Linke, Richard Cimino and Randy George, will sound off on important issues affecting the 1,870 square miles the residents of Winter Park, Fraser, Tabernash, Granby, Grand Lake, Hot Sulphur Springs and Kremmling call home. In their first-ever column today, they take on restrictive covenants and affordable housing transfer fees, which the Housing Authority Board waives when certain exemptions are met. The commissioners’ shared goal is to educate Grand County on topics that might otherwise be difficult to dissect. They welcome questions and feedback.
Like many mountain resort communities, here in Grand County, we’ve grappled with balancing the needs of our communities and an economy driven primarily by tourism. Our business owners have struggled to fill open positions, and many of us know individuals and families who were forced to abandon jobs here because they couldn’t find housing.
As commissioners, we’re frequently asked by our constituents why the Housing Authority Board approves waiving affordable housing transfer fees that could help fund workforce housing initiatives. The short answer is the restrictive covenants allow for exemptions. If all of the conditions are met, the Housing Authority Board must approve waiving the transfer fee.
Restrictive covenants and deed restrictions — also known as inclusionary zoning — have been used by communities for decades as a way to help maintain housing inventory for the local workforce. Simply put, restrictive covenants are voluntary agreements between the developer and the housing authority that place certain restrictions on housing developments.
Until recently, Grand County’s housing authority board couldn’t require developers to provide restrictive covenants. A few landowners voluntarily entered into restrictive covenants for the benefit of the Grand County Housing Authority, including Ranches at Devil’s Thumb and Coyote Creek at Winter Park.
The restrictive covenants impose transfer fees payable to the housing authority for its housing programs to benefit Grand County residents. When a developer purchases a homesite or unit located on one of these properties, a transfer fee of 0.5% of the purchase price is assessed on behalf of the housing authority, however, the transfer may be exempt from paying the transfer fee. The restrictive covenant determines when a transfer is exempted from the transfer fee.
In order to receive the fee exemption, the developer must file an exemption application with the housing authority, which then must be approved by the Housing Authority Board. If the applicant is qualified (meaning they meet a transfer fee exemption set forth in the restrictive covenant), then the Housing Authority Board can’t deny the request.
As long as the qualifications in the restrictive covenants are met, the transfer fee is waived for every ownership transfer until the first residential homebuyer purchases the property. (For example, many of the undeveloped Coyote Creek units have changed hands multiple times to date, with the new developer qualifying for the transfer fee to be waived.) Currently, 92 out of 120 units in Coyote Creek can be exempted from the affordable housing transfer fee. The Ranches at Devil’s Thumb were re-platted in 2021; currently 14 out of 15 homesites could be exempt from the transfer fee.
Right now, very little revenue is generated from transfer fees. Over the last five years, the housing authority has received $4,110 in transfer fees from the Ranches at Devil’s Thumb, and $46,117.21 from Coyote Creek. These funds were deposited into the Housing Authority’s General Fund to help cover the administrative costs of managing the covenants; applications for exemptions are processed and managed by the housing authoruity.
In the future, as more fees are collected (when the properties transfer from developer to homeowner and no longer qualify for exemptions), funds will be used for affordable housing programs. The hope with these restrictive covenants is that — over time — the transfer fees will be significant enough to have a true impact to affordable housing programs.
In 2021, Colorado’s legislature passed HB21-1117, to allow local government the authority to promote affordable housing units. The act clarifies that local governments may regulate the development and use of land within their jurisdictions in order to promote the new development or redevelopment of affordable housing units. Commissioners have asked that discussion on HB21-1117 be included in an upcoming meeting. While HB21-1117 isn’t an immediate solution, it opens the door to towns and counties having more tools at their disposal to promote building affordable housing, and increase the number of workforce housing units over time.
BOCC meeting agendas are posted on the County’s website co.grand.co.us on Fridays ahead of regular Tuesday meetings. If you’re not able to attend live or via WebEx, audio and transcripts of meetings are typically posted by the end of the week. We welcome thoughts and feedback from all members of our community.
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