The Times-Independent

A new conflict could cost Grand hundreds of new homes

A home is under construction at the Peak View subdivision next to Rim Village. The Grand County Commission will consider rules and regulations at a meeting Tuesday that would solidify an interpretation of the High-Density Housing Overlay that has caught some developers by surprise. Photo by Doug McMurdo

The High-Density Housing Overlay, an ordinance passed by the then-Grand County Council in early 2019 to incentivize construction of affordable housing for the local workforce, has been a wild success.

At least, it has been a wild success insofar as it has led homebuilders to apply to have the ordinance guide their developments. The county temporarily limited how many homes developers could build under the ordinance to 300, and that quota is 94% filled.

But, those roughly 280 homes, for the most part, have not yet been built, and developers say that some may never get built because of proposed rules and regulations that Grand County officials are backing.

The conflict has arisen in the last mile of a marathon that the county and developers have been running for years to build affordable housing for locals. Hundreds of new homes, likely accounting for tens of millions of dollars in local investments, are on the line.

The essential question is this: Who should be allowed to buy these new homes?

What is the disagreement?

For years, many developers that applied for the overlay (commonly referred to by the acronym HDHO) have been working under the assumption that they would have a wide-open market in which to sell. Developers like local couple Courtney Kizer and Steve Evers decided to pursue projects that they would sell to anyone, including both locals and investors outside Moab who had the capital to make it happen.

Selling to outside investors would not necessarily mean the houses would remain empty, unoccupied by local workers, as many vacation homes in Moab do during parts of the year. The High-Density Housing Overlay requires that projects built through the program be occupied by local workers or retirees — it specifies this can be either a local renter or a local owner.

Except in special circumstances, the houses can’t sit empty for extended periods of time as a second home might, and they most definitely cannot be listed for short-term rentals.

At least, that’s what Kizer and Evers thought. But Grand County officials, including County Attorney Christina Sloan, Planning Director Mila Dunbar-Irwin, and a majority of the county’s Planning Commission, don’t see it that way.

“It is the county’s position that the HDHO was intended to create a secondary housing market for locals, not provide an opportunity for outside investors to buy yet another investment property in a town to which they do not contribute financially,” Dunbar-Irwin said in an email last week.

The argument Dunbar-Irwin makes is one about fundamentally changing the market for local homeowners, and she said that allowing outsiders to purchase the homes to rent to locals wouldn’t achieve that goal.

“The opportunities to buy houses right now for anyone making less than a mining wage in Moab are basically zero,” Dunbar-Irwin said, adding that she knows this firsthand because she can’t afford to own any local housing. “If the HDHO doesn’t change the ownership market, then what’s the point? It’s not that hard to find a place to rent … and how does it help locals if even rentals are priced high enough that a project needs outside investors to survive?”

Owners and/or renters

According to Sloan, the meaning of the ordinance at hand does not restrict local property managers from buying up properties that they then rent out to other locals. That could be compatible with the land use code, she said, as long as both the property owner and the renter own or work at a local business or are a local retiree. It was not clear, however, whether local corporations could purchase and rent out the homes or only local individuals.

In explaining her position, Sloan pointed to the portion of Grand County’s land use code about enforcing the High-Density Housing Overlay ordinance.

“Without limiting the generality of the foregoing, it shall also be a Class C misdemeanor for any person, firm, entity, or corporation to sell or rent an HDHO lot or unit to a household not qualified under this section,” the code reads.

For Sloan, this clause means that Kizer and Evers will not be able to sell to outside property managers, even if they and developers like them all thought that they would be able to, and even if those buyers had to rent out the properties to locals.

For Kizer and Evers, as a financial matter, that’s a dealbreaker. Kizer said she has poured her life savings into this project, fully intending all along to have it become housing for locals, and a bar on selling properties to outside investors would cause the project to fail.

Failed projects could mean more second homes for wealthy out-of-towners

For Kizer, a failed project means a huge loss on her investment. She’s not the only one; an attorney representing one developer who is currently using the High-Density Housing Overlay said during a Grand County Planning Commission Meeting on Monday, Feb. 8, that he could file a lawsuit against the county if it finalizes proposed rules and regulations on the matter.

If these projects fail, it would also mean Kizer and her husband would abandon the project they have long dreamt of realizing — one for housing locals at a reasonable price — in favor of converting the property into the only other thing they said would get them a return on the investments they have made: yet more vacation homes that locals can’t afford to buy.

“We really care about this community,” Kizer said as she talked through the possibility, becoming emotional as she did so. “It kills me to even have to think about it.”

For the county, such overt claims of financial losses and all-but-promised litigation put elected officials in a position to tread lightly in their public statements on the matter. In response to a request for comment from three county commissioners involved with the passage of the High-Density Housing Overlay, Sloan asked that they withhold comment until she and Dunbar-Irwin have a chance to brief them at their next regular meeting because doing so “may subject the county to liability.”

Who is this helping?

In her own comments, Dunbar-Irwin said she was skeptical that the policy would work as intended if Kizer’s interpretation of the code — that anyone can buy High-Density Housing Overlay units, as long as the occupant is local — held.

“How does it help locals if even rentals are priced high enough that a project needs outside investors to survive?” Dunbar-Irwin asked rhetorically in an email. “If the intention is to develop a secondary market — then ownership is how that works. Locals can then buy housing for locals as their own rental investment and the purpose of the ordinance is doubly met.”

For Kizer though, the rules and regulations help nobody. She acknowledged county officials’ concerns about enabling outside investment on high-density properties that some claim “burden” locals, but, she argued, the county does not “get any benefit at all if we don’t allow for these outside investors” to enable homebuilding in Moab.

“This is about putting roofs over people’s heads,” Kizer said. “We want a workforce in Moab.”

The planning commission on Tuesday voted to make a favorable recommendation on proposed rules and regulations that county officials have prepared. The Grand County Commission is scheduled to review and possibly vote on the rules and regulations at its regular meeting Tuesday, Feb. 16.

If the rules pass as presented Monday, owners of houses built under the High-Density Housing Overlay must qualify as an “actively employed household,” undermining the plans of Kizer and other developers.