To:           VVHA Membership and Interested Parties

From:       Jim Lamont

Date:        January 22, 2007

RE:          VVHA Position Statement – Town of Vail Affordable Housing Impact Fees Proposal  

 

The Homeowners Association has concerns regarding the proposed terms and conditions the Town Council is considering to fund the Town of Vail employee and affordable housing program through the imposition of an impact fee.  (See Town of Vail press release below.)  It is concluded upon the following assessment of the proposal that the apportionment and amount of the impact fee is inappropriately excessive.  The Association recommends that the impact fee as proposed be rejected for the following reasons.

 

·         Impact fee must be based on an employee and affordable housing infrastructure and financial master plan.

·         Apportionment formula should be fair and consistent, it should not double count or inflate.

·         Sunset and other limitations are necessary.            

·         Preferential impact fees are inappropriate.

·         Rate of impact fee is damaging to property owners. 

 

Association favors standardized impact fees: The Association favors the imposition of standardized impact fees upon new development so that all classes of property owners are treated in a fair and consistent manner when they share the same or similar circumstances.  The Association believes that impact fees based upon detailed master plans and cost estimates for infrastructure improvements are preferable to the arbitrariness of creating higher densities using Special Development Districts and rezoning.   Arbitrariness causes damage to property owners that would otherwise not occur. 

 

Employee and affordable housing master plan required:  The impact fee is not based upon definitive master plans with associated infrastructure cost estimates and alternative funding sources.  The impact fee should be accompanied by an affordable and employee housing infrastructure plan of how, when and where to spend how much money, on whom and how many.  There is no such plan.

 

Apportionment formulas double counts and inflates:  North West Council of Governments part-time resident study indicates that local and part-time residents are the majority economic driver of the local economy.  The apportionment formulas for Employee and Affordable Housing Impact Fees do not appear to accurately reflect the growth of  the community’s permanent population.  Temporary construction jobs appear to be transformed into an equivalent number of permanent jobs. 

 

The two methods used to calculate the affordable housing impact fee appear to double-count.  The same local and part-time property owners are counted as employment generators in the apportionment formulas for both Inclusionary Zoning and Commercial Employee Generation.   Local and part-time residents are counted both as employment generators as property owners who will live in new or expanded residential construction, as well as customers who benefit from new commercial space. 

 

In theory, the apportionment formulas assume that full and part-time residents create two types of “permanent jobs,” one in “construction” and one in “support” businesses.  This assumption is not correct because construction jobs are “temporary” and jobs for support businesses are “permanent.”   Vail master plans for a “finite” population and land area, therefore its growth is not open ended, nor the need for temporary construction jobs.  As the “surge” in the construction of new buildings is completed, temporary construction jobs will be replaced with permanent jobs, but at a lower ratio.

 

Construction jobs are more labor intensive and of shorter duration than other types of resort community employment.  New construction in Vail will decline. Therefore, employee generation formulas should be based upon the need to provide housing for  “permanent” rather than the “temporary construction” work force.

 

The apportionment formulas also appear to be calculated based upon “regional” job generation in employment rather than “local.”  As “temporary construction job” growth declines in Vail, its job generation formulation should reflect “permanent” job growth rates in its own jurisdiction.

 

Sunset provision and other limitations are necessary:  Applying the proposed impact fee could generate a greater amount of revenue than is necessary to provide housing for the desired level of work force at any one time in the community development.  The Town of Vail has no specific infrastructure master plan or budget as to where and for what segment of the work force the affordable housing impact fee will be spent.  It has not been demonstrated that the amount of housing needed for the community can be built in the community.  Therefore, the stated and intended purpose for the impact fee appears to be misleading.  Without a plan or strategy there should be a sunset provision on the duration and amount of the impact fee. 

 

It may become necessary to required additional checks and balances to avoid spending on affordable and employee housing that inflates the cost of construction through untimely competition in the marketplace. It is suggested an authority be established that is independent of political processes to make decisions as to compliance with authorized master plans and other limitations regarding when and the amount of housing funds released.

 

Preferential impact fees inappropriate:  The proposed impact fee for commercial job generation is lower than the equivalent fee for residential uses.  The justification given is that the Town prefers commercial over residential development because commercial serves the sales tax paying destination guest.  The preference discriminates against the full and part-time residents who comprise more than half of the sales tax revenues for commercial enterprises. The preference disproportionately transfers the assessment burden from commercial to residential uses.  The allocation based upon preference encourages more commercial uses and less residential. 

 

Preferential treatment should be decided upon master planning and zoning, not impact fees.   Preferences for certain type of use and density by necessity must be evaluated in the large context of the community’s growth potential, desired character and infrastructure needs.

 

Proposed housing impact fee damaging to existing property owners.   The inappropriate application of apportionment and the lack of a comprehensive infrastructure plan for employee and affordable housing is causing the impact fee to have an adverse and potentially damaging affect upon the redevelopment and long-term growth of the Vail community. 

 

The amount of the impact fee threatened in the short-term will severely curtail all forms of development and damage the livelihood of full and part-time residents associated with the community’s development economy.  These effects are both inappropriate and unacceptable.  It is urged that the calculation and formulation for the apportionment of the affordable and employee housing impact fee be adjusted to limit its onerous effect, both in the short and long-term, upon development interests and the community-at-large. 

 

Summary:  The foregoing criticisms are the basis for the Association’s recommendation that the Employee and Affordable Housing Impact Fee as presently proposed should be rejected.