Dillon Town Council approved water and tap fee reimbursements Tuesday for deed-restricted accessory dwelling units, potentially worth upwards of $10,000 per unit. The goal of the program is to incentivize the creation of more workforce housing in Dillon.

Working in tandem with the incentive program, the council also conducted its second reading of an ordinance to amend parts of the municipal code. The amendment would expand the allowed size of cottage-style units and prevent homes from having two kitchens without an approved accessory dwelling unit.

As an example of potential incentives, a two-bedroom, one-bathroom accessory dwelling unit would receive $11,852 for water and sewer tap fees paid, according to a staff report and Dillon Finance Director Carri McDonnel. The money will come out of the town’s 5A funds, the staff report states.

“This puts some real teeth into it,” council member Brad Bailey said.

The incentive program will allow new accessory dwelling units in single family or duplex homes to apply for a reimbursement of the water and sewer tap fees if the homeowners sign a deed restriction for the accessory dwelling unit. All renters would need to work more than 30 hours a week in Summit County.

“I really hope this works,” Mayor Carolyn Skowyra said.

McDonnel said one owner already expressed interest. She said the owner already rents long-term, but the program would deed-restrict the property in perpetuity according to the staff summary.

Both owners of accessory dwelling units and prospective owners of unbuilt accessory dwelling units can apply, so long as the unit rents for periods longer than six months. The owner will be required to sign an agreement with the town. The owners will also be required to sign a deed restriction on their property with the Summit County Clerk’s Office.

New owners of recently built units would need to seek standard approval for their accessory dwelling unit within one year of joining the incentive program.

As stated in the agreement form, the town would pay into the water and sewer enterprise funds on the owner’s behalf once the deed restriction is recorded by the town.

The resolution passed just one vote shy of unanimous approval. Council member Kyle Hendriks offered the lone vote against the measure.

Hendriks also indicated some hesitancy to the proposed municipal code changes.

“Short-term rentals are always going to be a problem for our community, Hendriks said. “So if we can make it easier for someone to rent out their place long term, we need to be open to that idea because more housing is not becoming available or affordable anytime soon.”

“I agree with you Kyle,” Skowyra said, but the amendment had more to with keeping folks safe, she added. It’s important that people have kitchens that have been inspected and approved.

The amendment will prevent homes from having two full kitchens without one connected to an accessory dwelling unit. Appliances like a stove determine whether an area constitutes a kitchen, Town Attorney Nick Cotton said based on the town code. Wet bars and kitchenettes can generally avoid the classification, although usage also determines classification. If someone uses an area as a full kitchen, then it counts as one, Senior Planner Ned West said.

“What about ones that already exist?” councilor Renee Imamura asked about existing multi-kitchen residences.

“We’ve kicked that can down the road,” Mayor Carolyn Skowyra said.

McDonnel confirmed Skowyra’s statement, saying its too complicated to deal with right now, but the town is working on solutions. The issue will come before the council in an upcoming work session, McDonnel said.

Cotton added there are building and zoning concerns, and the proposed amendment primarily addresses zoning concerns.

Based on a Planning and Zoning Commission recommendation, the square footage of cottage-style dwelling units would increase from 600 square feet to 900 square feet.