County commissioners officially agreed Monday to raise rents at the county’s employee housing units up to “fair market rates,” per U.S. Department of Housing and Urban Development standards.
“If we unmoor from fair market rents, it gets into a pretty challenging discussion to really find a consistent handrail we can use year in and year out,” Commissioner Mark Newcomb said.
County Administrator Alyssa Watkins said Teton County rules have dictated that rents should be based on comparable market rates since the county’s worker housing program began in 2008. Commissioners reaffirmed that policy in August 2018.
But rents have mostly remained the same since then, she said, resulting in rates below market standards.
In July housing officials told tenants of seven county-owned employee housing units that rent would increase to comparable market rents. On top of a gradual rent increase, those tenants would also have to begin paying utilities, which they estimate is an extra $146 a month.
Watkins said the shift will avoid tax liabilities in the future. A rent subsidy could be considered a “taxable benefit,” meaning employee tenants would owe taxes on the difference between market rent and rent charged by the county.
Watkins said the taxable benefit would be a lower cost to the employee than the rent increase.
The town of Jackson is working toward using Housing and Urban Development rates to set its rents, Watkins said. St. John’s Medical Center regularly performs a third-party fair market value assessment of its workforce housing units, spokesperson Karen Connelly said. Historically the hospital’s rental rates were set at roughly 15% below market rate.
“This practice has tax implications, and therefore we currently aim to tie our rental rates to the market rate,” Connelly said in an email.
At the county units, rents are increasing from $685 a month to $1,056 a month for one-bedrooms, from $830 a month to $1,209 for two-bedrooms and from $750 or $1,200 to $1,699 a month for three-bedrooms, housing manager Stacy Stoker said. Those increases will be phased in gradually over four years.
“Four years is a reasonable time to adjust these rents,” Commissioner Mark Barron said. “It’s going to seem like they’re very high simply because they’ve been very, very low.”
Sheriff Matt Carr was disappointed with the change. He said the below-market units offer an important opportunity to maintain emergency and law enforcement workers living in Teton County and give them a chance to save up to buy a home. Two deputies will likely have to leave the community following the rent increases, Carr said.
“The decision by the Board of County Commissioners exemplifies the need for our electeds to take a hard look at reforming our county housing policies,” Carr said. “Our current county policies are forcing much-needed emergency personnel out of our community. It is a broken system.”
Several commissioners suggested staff could come up with a more nuanced rental rate based on the location and condition of individual units. For example, one three-bedroom unit is sandwiched between a juvenile detention center and an animal shelter.
“Operating within the framework of fair market value, I think we have significant flexibility based on the site characteristics that we should use,” Commissioner Luther Propst said.
Teton County’s budget for the fiscal year includes $2 million for amassing additional housing for county employees.
– Emily Mieure contributed to this story.