Transfer fee added to affordable housing funding mix
SUMMIT COUNTY If the idea of a voluntary affordable housing transfer fee catches on, it could provide funding for the program far beyond the 10-year lifespan of the .125 percent sales tax bump and graduated development impact fee approved by voters last November.That could be an important step in tackling a problem that needs to be seen in a long-term context, said County Commissioner Thomas Davidson, who is being credited with promoting the transfer fee as an alternative to the mandatory development impact fees.”You hang a carrot out there,” Davidson said. “You’re doing future generations a big favor,” he added, explaining that, over time, the voluntary .33 percent fee (as adopted by Summit County) could generate more revenue for affordable housing than the one-time impact fee.Housing authority director Bonnie Osborn updated the county commissioners on the status of those discussions at a BOCC work session this week. She said Frisco and Breckenridge are considering the adoption of such a fee, already approved by the county. Silverthorne and Dillon have not taken any steps in that direction, she added.The voluntary fee is meant to provide an alternative for builders. Instead of paying the graduated impact fee, they could choose put a deed restriction on the property that would stipulate the ongoing transfer fee. The first transaction would be exempt, but every subsequent sale of the property would be subject to the fee, Osborn explained.Several recent residential developments, including Buck Ridge, near Summit Cove, have already adopted a similar measure. County building inspector Larry Renfroe said that, based on preliminary indications, there could be a significant number of developers who would choose the voluntary transfer fee over the square-footage based development impact tax.Trade off?”There’s an upside and a downside,” said Summit Builders Association president Dave Koons. “The upside is, it gives you an option. The downside is that it tags your house with a perpetual deed restriction,” he said, characterizing it a choice between “the lesser of two evils.” The transfer fee is voluntary for the developer, but it would become a mandatory tax on any subsequent transaction, he explained.
“Some buyers out there could look at that and say they’re not interested in anything with that kind of a deed restriction,” Koons said. The question of who is going to pay the fee (the buyer or seller) could also become another point of contention in during real estate negotiations, Koons added.”This is so much more, so different from anything the voters ratified,” Koons said, adding that he’s not sure yet if he would choose the voluntary fee for one of his custom-home projects. “I’d have to do the math and really look at it,” he said.Davidson said county planners have done some early number crunching to look at how such a voluntary fee could affect revenue for the housing authority. The sales tax boost and the impact fees together are projected to generate about $32 million during the next 10 years. If a significant number of builders choose the voluntary fee, it would definitely reduce the revenue stream during the first few years. But that is worth it for the long-term trade off, said both Osborn and Davidson. Discussions about a transfer fee were included in discussions about affordable housing funding from the early stages, Davidson said. But the county and towns couldn’t pursue voter approval of a mandatory transfer tax because of TABOR restrictions, he explained. That’s why the ballot measure ultimately was based on sales tax and impact fees.”At some point the county is going to be built out,” Davidson said. After that, impact fees would only be levied in redevelopment, with exemptions for existing footprints. That would obviously affect revenue from the impact fee stream, while funding from a transfer fee would continue in perpetuity.Bob Berwyn can be reached at (970) 331-5996, or at email@example.com.Grant to fund housing needs assessmentSUMMIT COUNTY A $20,000 federal grant, administered via state channels, should help local officials pinpoint housing needs throughout Summit County, said housing authority director Bonnie Osborn.
The grant was awarded under the auspices of the Colorado Governor’s Smart Growth office. Boulder-based RRC Associates has already started working on the study. Osborn said she expects results in about two months.The goal is to find specific information on the desired number and configuration of affordable housing units and where they where they needed.The regional housing demand study will explore the trade-offs households may be willing to make (or not make) when choosing a residence, such as living in an attached unit rather than a single-family home of they could choose to live in their first location.Another goal is to understand the demand for future housing, known as keep-up demand, based on expected demographic changes and other factors like changes in employment patterns.Household and commuter surveys will be among the primary tools used to garner some of the needed data, RRC planner Wendy Sullivan explained in a letter to the housing authority. What’s your take?Is a voluntary real estate transfer fee a good alternative to development impact fees? Would you buy a house with a .33 transfer fee deed-restricted into the title? Click on the “comment” link above and let us know what you think.
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.