THE BUZZ 3: Incentive or Subsidy?

By on July 12, 2016

Disagreement persists as town passes short-term rentals in downtown Jackson.

160713Buzz3_origJACKSON HOLE, WY – A last minute “tweak” has turned into a full-time haggle as the mayor and town council try to incentivize workforce housing in the downtown core. Even as the town moves forward, opposition continues.

At its July 5 meeting, the Jackson Town Council voted unanimously to allow short-term rentals in the downtown core as a bonus to developers for building workforce housing. The ordinance was amended to include a cap that will limit the amount of development possible—for the time being, in the small downtown core.

“We are trying to respond to those pleas for some kind of policy that makes sense in terms of generating year-round affordable housing for working families,” Mayor Sara Flitner said. “We want this to be a conversation that’s transparent and that you [the public] help drive.”

Planning director Tyler Sinclair clarified the issue at hand. “We are talking about the workforce housing incentive program where a property owner would be allowed to build two square feet of market rate square footage in exchange for one square foot of deed restricted square footage.” Sinclair said. “The goal of the tool is to have the market help us address our workforce housing shortage.”

The cap, or governor, would limit the use of the short-term rentals bonus to up to 100,000 square feet. Councilman Jim Stanford, who had originally been against short-term rentals, voted for the ordinance, he said, because of the added cap. “It takes away some of my worries about ending up with a glut of high-end condos,” he explained.

However, Stanford noted the ordinance would make only the slightest dent in the valley’s housing emergency. “I am under no delusion that we are going to produce a wealth of truly affordable housing in the downtown core,” he said.

Instead the short-term rental bonus in a small 15-block section of downtown allows the town to test how the tool works, and what the pitfalls and benefits are. The mayor will create a stakeholder group to monitor the tool’s efficacy. Presumably short-term rentals could be used as a similar incentive to developers in other town zones.

“This allows the tool to be tested,” Sinclair said. “It allows the market to try to react.”

Flitner said the goal is to create housing. Affordable, however, is a relative term in Jackson Hole. While the workforce housing in question would be deed-restricted to people employed in Teton County, the costs of the unit could be around $600,000.

Mayoral candidate Pete Muldoon spoke during the public comment period and said the short-term rental bonus was flawed because it will not help the folks who need housing assistance most right now. “The kind of workforce housing this is going to create is not for people with low-income jobs,” he said.

Muldoon is one of several individuals who had sharp criticism of the short-term rental incentive. Another is certified financial planner Richard Bloom who noted in a letter to town planning staff, “I am still opposed to even this revision as each approved project will end in a net housing versus job production deficit.”

“The deed restricted units will go to the white collar workers,” Bloom wrote, “while the jobs produced by the condo short-term rentals will be in the accommodations employee income category.”

Several individuals voiced questions about the ordinance at the July 5 meeting, including lawyer Brenda Wylie, whosays she would like the bonus to be applied equally throughout downtown districts. “I feel like everything in the lodging overlay should be treated equally,” Wylie said.

As public comment continued, it became clear that the community is divided along philosophical lines. Some fundamentally question the ability of the market to solve housing problems, while others say it’s the last hope. This explains why those questioning the efficacy and trustworthiness of the market question the incentive tool all together.

Artist and activist Aaron Wallis even quoted Marxist theorist David Harvey:

“’Since small groups are likely to be more influential in the political decision making process, we can also infer that most of the decisions will disproportionately reflect the desires of small pressure groups as opposed to the mass of the population. Since these groups rarely act from altruism, we can expect these decisions to provide direct and indirect benefits to the members of the group rather than to members of other groups.’”

Jackson resident Kathy Tompkins echoed concern about the people benefitting most from the short-term rental ordinance. “With these short term rentals, I believe that between them and the bonus FAR, it is more subsidies to the bigger developers,” she said.

County commissioner Hank Phibbs said that growth of any kind was not going to solve the housing crisis. “We can’t grow our way out of it,” Phibbs said. “I think you have to adopt what you had previously prepared.”

S.R. Mills of Bear Development, who authored the study that inspired the short-term rental incentive, deems the bonus pragmatic. “While the specific construction costs can be debated, our study confirmed our belief that the [FAR bonus] tool won’t be used if short term rentals are not included.”

Accessory thoughts

On July 6, the tenor in town council chambers was much more relaxed. No political theory debates, no little guy shaking his fist at The Man. Instead, the planning commission held its regular meeting, and on the agenda was review of an amendment to current land development regulations to allow Accessory Rental Units (ARUs) in some town districts.

Planners held several public workshops in June to educate Jackson residents about accessory rental units and to get public feedback. Planners then drafted the amendment incorporating public input.

“We had significant public input,” lead planner Regan Kolhardt said. “A large majority of residents were in favor of ARUs in town.”

They developed the following criteria. The accessory unit can be a maximum of 800 square feet, the homeowner must retain existing LDR physical development standards, and the ARU must have one parking space.

Commissioners discussed various aspects of the proposed amendment and made one overall change. They determined that detached ARUs should be allowed in all zones, whereas staff planners had recommended one zone be attached-only. The amendment passed with the added condition of detached availability in all zones.

The amendment goes before town council on July 18. PJH

About Meg Daly

Meg Daly is a freelance writer and arts instigator. She grew up in Jackson in the 1970s and 80s, when there were fewer fences, but less culture. Follow Meg on Twitter @MegDaly1

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