Affordable housing helps some, penalizes others

This letter was written by Joe Judd (owner of Judd Fine Homes) as a response to the County Commissioner’s meeting of August 11, 2008. The meeting was to discuss the potential for the County to donate a piece of land at the intersection of Crestone Ave. and Mesa Lane to the Chaffee Housing Trust. The land in question was donated by Chaffee County, and the County Commissioners on August 12, 2008

I would like to address this issue from three different perspectives: as a Builder and Developer, as a neighbor, and as a concerned citizen of Chaffee County (and in the near future, as a citizen of the City of Salida).

As a Builder, I do have a vested interest in the decision to donate this property, as I currently own, and am building on, the neighboring parcel of land.

While I do support the idea of being able to provide affordable housing, I don’t feel as though an appropriate plan has been established at this time. This property is being considered for donation. It will not only benefit the Chaffee Housing Trust. It will also substantially benefit the Developer of this project.

As a Builder who is currently operating in the free market, I feel this project puts me at a tremendous disadvantage. The fact that there may be nine affordable housing units on this property has the potential to seriously affect my ability to sell the four neighboring units which are scheduled to be completed in the next month. I am greatly concerned that a potential buyer will realize that there will be nine affordable housing units built here, and will see that as a negative to the overall flavor of the neighborhood, and the future value of the property. It may be that there will be no negative impact from this project. However, very little can be done to combat the public’s perception, especially given that there is no working plan, or set of standards to be adhered to.

This property in question was sub-divided and zoned R-3 during the past two years. I purchased my property under the assumption that I was in an area zoned R-3. Given the current situation, where there is only one lot next door, I could potentially have three residences as neighbors. If this land is donated, I could have nine residences next door. If the County property were to be sold on the open market, it would still only allow a total of six units on both pieces, spread over both pieces of property.

I see no option being presented to offer this piece of property on the open market. The individuals who developed and sold this property to me had tried in the past to work with the County to purchase the property in question. It is my understanding that the County did not pursue this as an option at that time.

As a local Builder and Developer I have worked within the parameters of the city zoning, as well as the open market, to develop an affordable alternative for housing in the Chaffee county real estate market. I would point to my project at Triangle Court as evidence of success in being able to provide a good, high-quality housing option to buyers in Salida. A total of 10 units were built over a four-year period. Eight of these units sold for $200,000 or less. The initial phase consisted of four units, which listed between $165,000 and $175,000. These units offered high end finishes in every unit, including hardwood floors and granite-tiled counters. This also offered full ownership of each condominium, including the potential for these buyers to realize any gains in the market, thereby providing a measure of financial security for the future.

I feel that the developer of this project would be operating at a tremendous advantage in this situation. She would receive the chance to build this project and make a profit, with the financial guarantee of the Chaffee Housing Trust, and any government entity which supports it. It is my understanding that the Chaffee Housing Trust will guarantee a full return of the land cost, plus any interest, as well as providing a guarantee to the bank for financing needed for construction of the project. I see very little, if any, risk on the part of the Developer in this project.

Shouldn’t there be some sort of due process in the County’s decision to essentially provide a risk-free investment opportunity to only ONE member of our community. I don’t feel that the particulars of this agreement to give away public land (an asset which belongs to ALL the citizens of Chaffee County) were ever given proper public notice. As a Builder myself, I would love to be in the position to have an exclusive opportunity such as this. However, I don’t believe it would be fair.

I would also like to point out what I see as a from of blackmail, which the City and others term an “incentive”. The current discussion of Affordable Housing suggests the following model: When a project developer is willing to donate a percentage of units as Affordable, they may be given some incentives, such as an increase in density, or a fast track on subdivision approval. However, if a Developer does not want to donate land or units to the Chaffee Housing Trust, they will pay a “fee in lieu”. This fee has not yet been determined. However, it certainly appears to me to be a form of blackmail. In other words: “play our way, or pay the price”.

The end result of making a Builder, or Developer pay a higher fee is to increase the cost of the housing units which they build and sell. This will, in turn, drive up the cost of any units that don’t fit the criteria of Affordable Housing. Thereby, increasing the cost of housing for all citizens of our county that don’t meet the criteria for Affordable Housing. This makes it even harder for those who do not meet the parameters of Affordable Housing to afford a home.

The threshold point for when this “fee in lieu” kicks in has not yet been determined. Some have suggested ten units or more. Some have suggested that ANY number of units, on any City lot, be forced to meet this requirement. This would mean that anyone building even a single family home, within the city limits, would be forced to pay a “fee in lieu”. In the end, this amounts to a tax on anyone who builds on a vacant piece of land in the City, and potentially in the entire county. If the City of Salida (or Chaffee County) truly wants the cost of affordable housing to be supported by ALL, the only fair solution is to put a tax issue on the ballot. Of course, it is rare that the citizens will agree to a tax hike. Therefore, the City can simply circumnavigate this by calling it a “fee”.

As a neighbor, I would like to make the following points: I do support the addition of affordable housing to our community. However, I believe it should well thought out and planned. I would like to point to the recent situation on F Street, regarding the construction of a duplex unit, and a triplex unit on two neighboring pieces of land. The citizens of F Street were so infuriated with this plan, that they circulated a petition to have the entire area zoned as an historic district. It is my understanding that the planned buildings could have been built as planned, given the existing zoning. I might also add that I applaud the developers of this project for having the integrity to walk away from the project, in order to not stir the pot and go against the wishes of many neighbors.

I would also like to remind the Commission of the recent decisions made regarding the Mira Monte subdivision, which is coincidentally just a few blocks from the project being discussed today. Once again, there was vehement disagreement among the citizens concerning the density being allowed. Despite the objections of many citizens, annexation was granted. The net gain in affordable housing for Salida was seven units, which are to be built as “mother-in-law” units, above detached garages. I feel, as do many I know, that the developers of Mira Monte dangled a small carrot of a few affordable housing units, to achieve a much larger project. Rather than listen to the citizens, I feel that the city caved into a large out-of-town developer, to gain revenue from tap fees and other revenue sources. The developer of Mira Monte had no given right to annexation. Had annexation to the City not been granted, the project could not have been built.

My point in bringing up these recent issues, is to remind the Commissioner’s of the powerful feelings of existing neighbors and citizens, when local government makes decisions to help a few, at the cost of the many, especially when the many are themselves citizens and voters. How can the citizens of the City and County protect their rights, regarding the value of their property, if there is not some sort of due process given?

Inclusionary Zoning, as discussed in a previous round-table discussion, seems to offer every advantage to a developer who is willing to work with the Chaffee Housing Trust, at the expense of existing homeowners. Keep in mind, for most people, owning their own home and the resulting financial security that comes with it, is the single biggest opportunity for most Americans to achieve financial security. This is true for those seeking affordable housing. But, it is also true for those who currently own or hope to own a home, but don’t qualify for a government sponsored program.

My understanding is that this project on Crestone Avenue will comprise nine units, eight of which are intended as affordable housing. From attending the discussion of affordable housing in the last week, it is also my understanding that the desire is to provide a MIX of housing in a given development. This project is in no way representative of that. I am much more in favor of an appropriate mix of housing. For the same reason that Housing Projects in big cities tend keep people in a lower socio-economic status, I feel there is a potential for an affordable housing project in Chaffee County to fail in the same ways, if not properly implemented.

Finally, as a Citizen, I have the following concerns: I feel that this project will set a precedent for how all future projects will be done regarding the ability to offer affordable housing in Chaffee county. It is VITAL that this project be done right. I don’t feel it is fair to the citizens to look at each project on individual merit and decide on an approval accordingly. Just as there are zoning codes and building codes, there should be established parameters for future affordable housing projects. This should extend from land issues, such as this discussion to donate County land (which is currently an asset of the citizens of the county), to zoning and Building Department issues. The potential that I see in this situation is to provide Affordable Housing to a few, at the cost and detriment of the existing citizens.

The county seems to be entering into an agreement on this project to donate land, without any clear vision of what is to be built. I believe that the citizens of the county should know exactly what to expect in return for this donation. Providing cheap housing fits the definition of affordable housing. But, I don’t believe anyone wants to live in, or subsidize cheap housing. Any affordable housing should be thoughtfully constructed, from the quality of finishes to the aesthetic appearance. And probably most important, the overall efficiency in operating and maintenance costs over the lifetime of the building need to be considered.

By bringing up these points, I don’t mean to insinuate that I believe the standards will be lower in this project, or in any future affordable housing projects. I just believe that if the citizens are asked to support these decisions, they have every right to know what they are getting for their money. This also should include a list of home prices, and perhaps an estimated operating cost. Transparency in the entire process is essential.

Finally, I would like to point out what I see as an incredible irony in the entire affordable housing debate in Chaffee county. When someone wants to build a home in this county, everyone is very quick to jump on the band wagon of adding fees for this and that. Tap fees have risen over $8,000 in the last 4 years in the City of Salida. Building permits have gone up. Fees have been added to building permits to benefit the school system. “Let growth pay its way!” they say. “These new people can afford it!”, they say. This is precisely what drives up the cost of homes in our county. To be sure, there are other forces at work, including the free market. But, in the end, every subsidy provided to one group must come at the expense of another group. Realize that the ones paying the extra fees may well be the ones who can afford it the least, as well as those that can.

Each subsidy given to Affordable Housing cannot come at the expense of those in the rest of the market. If the middle end of the market gets priced out, then we have exactly what every one fears in this county. We have a situation just like Aspen, or Vail, or Summit County. The upper end can afford to pay whatever they have to, and the lower and middle sectors move somewhere more affordable, along with everyone else. In the end, this is the most destructive thing we can do to both the housing market, and the quality of life which we all love and strive for in Chaffee County.

Please, consider carefully your decision on this matter and its implications on all future discussions regarding affordable housing in our community. It should be fair to those striving for home ownership, as well as protecting those who are already homeowners, as well as citizens and local businessmen.

Joe Judd
Owner, Judd Fine Homes

The Citizen is happy to provide a forum for comments and discussion. Please be civil, truthful, and relevant. Please suggest removal of comments that violate these standards. Real names are appreciated.

3 Responses to “Affordable housing helps some, penalizes others”

  1. lee hart

    i was at that hearing on the 11th and was disturbed by the commissioners' lack of substance in response to your questions and concerns. To make a decision to donate publicly owned land but leave until later the resolution of all-important details of how the land will be developed is irresponsible administration of a publicly owned asset. Affordable housing is a vital, high-profile and emotionally-charged issue. As such it is incumbent upon our local elected leaders to have a well-researched countywide plan that addresses the affordable housing issue from both an economic development standpoint as well as within the planning and zoning context.

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  2. Trey

    Good point, Walt. This letter was written by Joe Judd and posted before we changed the format of "letters" to eliminate bylines in favor of more-conventional signature blocks.

    This is our oversight and I'll fix it. Thanks for pointing it out.

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