Turning Town Hall into a townhome? Dillon floats workforce housing ideas

Dillon Town Council marked several locations in town for workforce housing potential while reviewing its options to address its workforce housing shortage at Tuesday’s council meeting Sept. 20. Lots along Main Street, LaBonte Street and even Town Hall itself were considered.

“The slate is wide open in terms of trying something,” Town Manager Nathan Johnson said. The town’s workforce housing plans are all in their infancy, with the only closest to reality being its project on County Road 51 in partnership with the U.S. Forest Service. Council entered an executive session Tuesday night to consider its negotiating strategies.

Dillon town staff listed four lots with potential for workforce housing projects. The U.S. Forest Service parcel is already part of negotiations between the town and forest service personnel.
Town of Dillon/Courtesy image

The discussion didn’t dig into the issue, but prompted ideas from council members and staff on how to best proceed. The town broke its options up into three categories: build, buy and assist.

Build includes laying foundations on town-owned property, partnering with another entity and acquiring land for future projects. As likely the most expensive option, according to Mayor Carolyn Skowrya, the council did not expect to pursue such projects.

Buy includes deed restrictions via Summit County’s Housing Helps program, as well as buying real estate on the free market and reselling with deed restrictions or renting long-term to the local workforce. This buy-down option garnered the most discussion at council. Dillon has not pursued any such method to date, Johnson said.

“Breckenridge has been buying tons of stuff,” Skowyra said. “I suspect this is where our attempts might land.”

The town’s housing fund, or 5A funds, generates approximately $1 million per year with a current fund balance of around $5.5 million according to a staff report. The 5A funding was recently extended by the voters for an additional 20 years and will expire in 2046.

As a rough estimate, Dillon Finance Director Carri McDonnell said the average price of a condo in Dillon is somewhere in the ballpark of $800,000 to over $1 million. At that rate, the town could purchase about five units at market price for resale at a decreased price. The town would eat up the difference, and money from the sale would return to the housing fund for more buy-downs, McDonnel. The housing fund is continuously refilled with sales tax revenue.

If the town wanted to employ someone to monitor the real estate market for buy-downs, the town would need to hire a real estate agent, McDonnell said. The town could submit a proposal request for an agent if it wanted to hire one, she said.

The town could buy out of its borders, too, including in Dillon Valley and Summit Cove. although council expressed a desire to keep its efforts within Dillon’s immediate surrounding area.

The third route, assist, means looking at down payment assistance plans for town employees, rental assistance measures and setting up master leases with property owners. Master leases could be deed restricted to town or local employees.

The town’s down payment assistance program has been “very successful,” according to Johnson. Instituted in Sept. 2021, the town will lend up to $25,000 or 10% of purchase price, whichever is less, to town employees to purchase their only home at a 1% interest rate over 20 years. Only two employees had taken advantage of the program between its creation and June of this year, when council approved increasing the loan amount to $75,000 per staff’s recommendation.

A loan of $25,000 represents 5% of a purchase of $500,000. This summer, even one-bedroom units were selling for over $500,000, according to a June 7 staff report.

Staff also provided the council with a map of lots with workforce potential. Included in the map were four locations: Town Hall, the U.S. Forest service plot on County Road 51, three plots along Main Street between Lake Dillon Drive and LaBonte Street, and one plot along the straight section of LaBonte Street connecting to Lake Dillon Drive. The latter lot surrounds the Payne Building, which has been the subject of redevelopment conversations for some time.

“This property is ripe for redevelopment,” Johnson said, speaking about the walls surrounding Town Council at Tuesday’s meeting. Recent developments across the street from Town Hall and upgrades to the Dillon Town Park next door made the location ideal for creating workforce housing with a “community feel,” Johnson said.

The idea is nothing more than a “nebulous” concept at the moment, Skowyra said, adding that moving Town Hall is not part of any specific vision but is merely an idea.

Several lots fell within the town core area, so council recommended any town core development plans on those lots should include — although not necessarily feature — workforce housing.

Following discussion, council members wanted an estimate of the number of Dillon residents in need of workforce housing. Dillon continues to see employees struggle to find secure housing within Summit County, according to a recent staff report. Countywide, the most recent housing report indicates the county is down about 2,800 units, Johnson said. County reports will likely update that number in 2023, he said.

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