The High-Density Housing Overlay, an ordinance passed by the Grand County Council (it was a council back then) in early 2019 to incentivize construction of affordable housing for the local workforce, has been a wild success.
At least, it has been a success insofar as it has led homebuilders to apply to have the ordinance apply to their developments. The homes, for the most part, have not yet been built.
It is at this critical moment, as the checks are about to start clearing to send construction crews into the valley to start building, that a conflict over the housing ordinance has arisen. The essential question is this: Who should be allowed to buy these new homes?
For months — years, in some cases — developers that applied for the overlay (commonly referred to by its initials HDHO) have been working under the assumption that they would have a wide open market to which to sell. Developers like couple Courtney Kaiser and Steve Evers, who live in Moab, decided to pursue projects that they would eventually sell to investors outside Moab who had the capital to take them on.
Selling to outside investors would not necessarily mean the houses would remain empty, unoccupied by local workers, as many vacation homes in Moab do. Indeed, the High-Density Housing Overlay requires that projects built through the program be occupied by local workers or retirees. They can’t sit empty for extended periods of time, with nobody occupying them, and they most definitely cannot be listed on Airbnb or Vrbo for short-term rentals.
At least, that’s what Kaiser and Evers thought. But Grand County Attorney Christina Sloan and Planning Director Mila Dunbar-Irwin don’t see it that way.
“It is the county’s position that the HDHO was intended to create a secondary housing market for locals, not provide an opportunity for outside investors to buy yet another investment property in a town to which they do not contribute financially,” Dunbar-Irwin said.
The argument Dunbar-Irwin makes is one about changing the market for local homeowners, not merely to reserve housing units for locals to rent.
“The opportunities to buy houses right now for anyone making less than a mining wage in Moab are basically zero,” Dunbar-Irwin said, adding that she knows this first-hand because she can’t afford to buy any local homes herself. “If the HDHO doesn’t change the ownership market, then what’s the point?”
However, according to Sloan, the meaning of the ordinance at hand does not restrict local property managers from buying up properties that they then rent out to locals. That could be compatible with the land use code, she said, as long as both the property owner and the renter own or work at a local business, or are a local retiree.
In justifying her position, Sloan pointed to the portion of Grand County’s land use code about enforcing the High-Density Housing Overlay ordinance, which reads in part:
For Sloan, this clause means that Kaiser and Evers will not be able to sell to Salt Lake City-based property managers, even if they and developers like them all thought that they would be able to, and even if those buyers fully intended to rent out the properties to locals. This is presumably because such a firm would satisfy the definition of “a household not qualified under this section.”
For Kaiser and Evers, that’s a deal-breaker — as a practical matter, not one of principle. Kaiser said she has poured her life savings into this project, fully intending all along to have it become housing for locals, and a bar on selling properties to outside investors would cause the project to fail.
For Sloan, that claim means potential litigation against the county. She has requested that members of the county commission withhold comment on the matter until she and Dunbar-Irwin have a chance to brief them at their next regular meeting.
For Kaiser, a failed project means a huge loss on her investment. It could also mean abandoning the project she and her husband have been dreaming of building — one for housing locals at a reasonable price — in favor of converting the property into something much more lucrative: yet more vacation homes that locals can’t afford to buy.
“We really care about this community,” Kaiser said as she talked through the possibility, tearing up as she did so. “It kills me to even have to think about it.”
Ideally — and, as she has been planning for years now — Kaiser said she would like to sell some of those yet-built units to locals. Not all, but some. Most of the rest, she said she and Evers would have to sell to outside property managers to make the project pencil out — though, Kaiser thought, even those properties would become housing for locals in the form of affordable rentals.
Dunbar-Irwin, however, said she is skeptical that the policy would not work as intended if Kaiser’s interpretation were the true, legal meaning of the code.
“It’s not that hard to find a place to rent,” Dunbar-Irwin said, adding that and it would become easier to find rentals as units like Kaiser’s came online. “How does it help locals if even rentals are priced high enough that a project needs outside investors to survive?”
She went on to say that, in her experience working in the Teton Valley in Idaho and in Jackson, Wyoming, “people come for a little while, pay rent that’s too high, realize they’ll never get ahead, and leave town.” The reason she said that happens is that rent prices do not track with local wages the way that ownership costs do. Specifically, this happens “with a squeeze in a rental market,” meaning a lack of available rentals, which could contradict her statement that it’s “not hard to find a place to rent” in Moab.
Dunbar-Irwin and the Grand County Planning Commission are set to discuss the matter at the body’s next regular meeting on Feb. 8. After Kaiser and Evers brought their case before the Grand County Commission this week during public comment, the chair of the commission, Mary McGann, said that she planned to attend the Feb. 8 meeting as well to be briefed on the matter.
McGann, after Evers and Kaiser spoke, also said that she wanted to see their project “come to fruition.”
“I think it’s a good project, and they’ve put much time and effort into it, so I hope that can happen,” McGann said.