Housing mitigation

The new Cowboy Coffee near Maverik at Broadway and South Park Loop includes employee housing, a requirement of new commercial development in the valley.

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.”

Contact Tim Woods at 732-5911 or town@jhnewsandguide.com.

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(3) comments

TERRENCE MILAN

This is a good rule if you are looking at a seasonal business that relies on transients to fill in its workforce. It provides housing to the seasonal workforce, tied to their employment. It doesn't detract from the year round housing stock. This creates a factory town atmosphere for year-round workers when their housing is tied directly to their employer. Considering finding a better opportunity means possibly losing your home. In the end, it holds back wage growth and could lead to workers becoming indentured. Large housing projects should be offering a certain percentage of affordable homes to offset their high-end luxury units. From what I read in the article, the regulation fails to consider the type of business and the type of employee that they hire.

Greg Epstein

I wrote this in 2018, but it is applicable to the decision made regarding cutting the mitigation rates by 50%. In 2018 I was opposed to the over-correction of the mitigation rates to such a high percentage and I supported cutting the rates last Tuesday.

In my opinion, one of the biggest news stories of 2018 that went virtually unmentioned, has to do with the unintended consequences of the new grossly increased mitigation rates for physical development in the Town of Jackson and Teton County. It is my concern that because of the newly increased rates that smart growth will be unattainable because of the punitive costs and our community will fall into a deeper no-growth cycle. While there are many in our county who would love to see heavily reduced or no growth moving forward, this isn’t really practical when we consider the community holistically. These high mitigation rates on development will make it difficult for entrepreneurs, local business owners, and employers for a handful of reasons. Regarding entrepreneurs, trying to start up a business in an environment where it is very costly to obtain or renovate office space/ workspace for your needs will cause these people to look for other more welcoming communities. As far as current small business owners, the organic growth of your business will be limited to the size of the physical development you can afford and not the market demands. Additionally, most small businesses in Teton County currently have labor issues, and cost-effective stable housing is primarily the root of the problem. Unfortunately, because of the ever-increasing costs of construction in conjunction with the excessive commercial mitigation rates, new development and most redevelopment is completely cost-prohibitive for a majority of employers therefore reducing necessary potential workforce housing opportunities. Ultimately, local businesses are part of the fabric of our community and many of these employers are trying to do the right thing by paying more livable year-round wages and providing some level of housing. Unfortunately, if we continue down our current path our local mom and pop businesses will be priced out of the market and only the incredibly well-capitalized businesses who depend on service and seasonal workers will survive this overcorrection leading to a resort first, community second reality.

#votegregepstein

Don Frank

I voted against the enormous commercial mitigation increase of 2018 citing the failure of Town - County planners to link arbitrary increase magnitude with real world economic impacts on our fellow citizens. Mr. Newcomb’s comment is inverse. Because the 2018 increase was ideologically motivated rather than empirically vetted the Council and Commission rushed to a poorly understood rate increase. Having watched the current council and commission fail to deliver workforce housing EX: Cheney Lane, Raines, Munger, Kelly St (suboptimal) and now hobbling Gil generosity many may conclude that some of these elected persons campaign on housing solutions but lack the courage to actually deliver on those hollow promises. I am not surprised that Cheyenne questions our methods. We have the land, the regulatory tools and the wealthiest community in America, an “embarrassment of riches” but we cannot reach actionable consensus on solutions. The gang that just cannot quite saddle up.

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