Affordable Housing Fee in Lieu

As Jackson real estate prices continue to rise, so too do the housing fees in-lieu, which are designed to mitigate the impact of new developments. Last week, the Town Council approved increases of up to 8 percent for 2017.

When a developer’s housing requirement is less than an entire unit or when a developer can demonstrate that constructing a unit is impractical, a fee-in-lieu may be paid to the town’s affordable housing account to fund affordable housing projects.

“The fees-in-lieu are very important,” said Stacy Stoker, housing manager for the Jackson/Teton County Affordable Housing Department. “We’ve built a lot of affordable housing using that money.”

Teton County has $2.9 million in the affordable housing fund. The town has $1.2 million. With an increasingly high price for land, $4.1 million between the town and county doesn’t go far. The Jackson Hole Community Housing Trust, for example, received a $4.05 million subsidy to build 26 units for the Redmond Street Rentals.

The county updates its fee structure every year using data from the Department of Housing and Urban Development and International Code Council. The council updates every two years.

For residential developments, excluding single-family homes in town, developers must include a certain amount of category 1, 2, and 3 units depending on height and density.

If a developer opts to pay a fee-in-lieu, the Affordable Housing Department gathers the average price for one-, two-, and three-bedroom condos from “The Hole Report,” and the maximum sales prices for categories 1, 2, and 3 homes.

The maximum sale price is then compared to the average one-bedroom condo price, the difference of which is called the “affordability gap.” The “affordability gap” for each unit type is then averaged to get to the fee.

For example, the maximum selling price for a one-bedroom Category 1 home, according to the Department of Housing and Urban Development, is $139,200, or 30 percent of a category 1 family’s median household income. That number is compared to the average one-bedroom condo price in Jackson of $365,108. The difference, $224,908, is the subsidy needed to build a category 1 one-bedroom unit, also known as the “affordability gap.” The gap for each unit type in each category is then averaged to get to the fee-in-lieu for each category.

According to housing officials, in-lieu fees for residential development jumped this year due, in large part, to a red-hot local real estate market.

Calculating fees-in-lieu for commercial developments is more complicated, but it essentially works out to be the difference between the cost of constructing housing per person housed and the ability of an average seasonal employee to pay for that housing.

Teton County imposes affordable housing fees-in-lieu separate from the town. The Board of Commissioners approved an increase in county fees-in-lieu in May, but last week the fees were updated again to remedy an error. The county fees-in-lieu for next year are $196,421 for category 1, $162,671 for category 2, and $128,938 for category 3.

Contact John Spina at 732-5911, or @JHNGtown.

Cody Cottier covers town and state government. He grew up with a view of the Olympic Mountains, and after graduating Washington State University he traded it for a view of the Tetons. Odds are the mountains are where you’ll find him when not on deadline.

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