A divided Jackson Town Council and Teton County Board of County Commissioners voted Tuesday on the first step to cut their respective housing mitigation rates by 50% for commercial development.
Simply put, mitigation rates are the amount of housing that commercial and residential developers must provide — or an associated fee to build such housing — based on the number of jobs their development will generate and the expected level of pay for those new employees. Altering mitigation rates has been a tool elected officials have tried to use to balance demand for workforce housing with supply.
Though councilors and commissioners were divided on how much to reduce the rates, they were unified in acknowledging that if they didn’t lower the rates, they risked losing the tool altogether after opponents of the increased rates asked state lawmakers in Cheyenne to intervene. One lawmaker floated a bill, which failed, to block local elected officials from asking for any housing mitigation.
With the possibility of such a bill resurfacing when the Legislature reconvenes, the town and county voted Tuesday to reduce the rate. The split votes — both narrowly passed 3-2 — came after more than two hours of deliberations that at times were heated and pithy.
A number of options were put before the group, starting with two proposals, a 75% reduction or a 50% one, presented by Jackson Community Development Director Tyler Sinclair. In the end, suggesting that their hands were tied and they had to make a move to appease the Legislature, the two elected bodies each landed on a 50% reduction.
The new rules, approved in 2018, dramatically shook up Teton County’s development landscape by requiring developers to pay for or provide affordable housing for a portion of the full-time, year-round employees generated by a development. That increased costs for developers of some types of projects, like offices or restaurants, and decreased requirements for multifamily residential development. The aim was to balance job growth with housing supply. Since 2012 jobs have averaged an annual growth rate of 3.5%, compared with 1.1% growth in housing.
The 2018 rules, for example, meant a 90-unit apartment complex would have to provide 2.4 units of affordable housing, instead of 20. An office in town, however, would have to provide 4.9 units instead of 0.2. Tuesday’s decision reduces by 50% the rate applied to commercial developments like offices.
In an interview Tuesday afternoon, Councilor Arne Jorgensen said it’s important that people understand the move is an interim step — he said he expects the rates to be revisited after a monthslong Nexus study is completed and the council and commissioners can examine solid data — and the matter will now go to the town’s and county’s planning commissions for recommendations. The Nexus study estimates how many jobs various enterprises will generate, in order to calculate the required mitigation.
After getting the Planning Commission recommendations, the council and commissioners will vote on final approval, with the town requiring three readings, so final approval isn’t expected until near the end of the year. Jorgensen said it would be ideal to have the process completed by then, because the council will have a different makeup after Jan. 1, as could the county commission.
With the move coming just two years after changing the rates, Commissioner Mark Newcomb warned against knee-jerk actions.
“I think what’s worse than mediocre policy is whiplashes in policy,” he said. “Some steadfastness is more important sometimes than trying to react every couple of years to a new criticism, to a new special interest.”
Newcomb joined Commissioner Luther Propst as the county’s two “nay” votes, while Councilors Jonathan Schechter and Jim Stanford were the town’s two “nay” votes. Schechter had pushed for the reduction to be lower, such as 37.5%.
Jackson Hole stakeholders met the vote with mixed reactions.
“We’re disappointed that a few local landowners and developers used the threat of state legislation to strong-arm our elected representatives into reducing housing mitigation,” said Skye Schell, executive director of the Jackson Hole Conservation Alliance. “This summer made it even more clear that commercial development needs to offset and mitigate its impacts — on housing, on traffic congestion, and on our one-of-a-kind ecosystem. This vote was a step in the wrong direction, but honestly, I don’t fault the council and commission for bowing to political pressure from Cheyenne.”
Jackson Hole Chamber of Commerce President Anna Olson supported Tuesday’s decision, even though it fell short of the chamber’s desire for “Option 1” to reduce the rates by 75%.
“Two years ago, we made public comment, along with others, that we felt the rise in mitigation was too much,” Olson said.
“Today’s answer, I feel, is a good resolution to the interim situation that our town and county are in. We are very publicly working toward a new Nexus study, which is a good thing.”