In reporting the story about the rules and regulations that Grand County is now drafting that will administer projects built under the High-Density Housing Overlay, I have come down with a feeling that, in trying to limit ownership of the units to locals, the county is undermining the original intent of the ordinance that will leave it with a muddled policy that is weaker than its original form.
Of course, Grand County Attorney Christina Sloan would argue that the interpretation of the ordinance that she (and, to be fair, the rest of the county staff and likely commissioners) is looking to implement is the original form. I think that is demonstrably false, but it is her earnest belief nonetheless.
She made this case to the Grand County Planning Commission on Monday, Feb. 8, when she said that discussions between members of the Grand County Commission and the Grand County Community and Economic Development Department revealed that the ordinance was about local ownership of HDHO units, not merely local occupancy.
Digging into those same meetings, exchanges on the proposed ordinance reveal that there had indeed been considerations made for the potential that non-locals could own these units, but Grand County would still benefit because locals would have exclusive access to renting those outsider-owned homes.
In reality, we’re not talking here about a couple in Florida renting out an single-family home in Spanish Valley to a local worker. We’re talking about an investor on the Wasatch Front or in Denver owning a handful of duplexes or four-plexes or potentially an apartment building or two — all units that would have to be rented to local workers, retirees, or business owner, lest the owner face a criminal charge.
The legislative intent behind the High-Density Housing Overlay will matter if (or, if the outcome of all this is not to developers’ liking, when) a case against the county goes before a judge, and that judge determines that the language of the ordinance itself is ambiguous. If the language is unambiguous, the language is to be followed.
However, if the language of the ordinance is ambiguous, then the judge faces a dilemma. How should the code be interpreted if the meaning of the actual words don’t say? But again: That only matters if the language of the ordinance is ambiguous. Here is the passage in question, which Sloan is citing as the county’s authority to limit ownership of HDHO units to locals only:
To me, that does seem unambiguous, but I am awaiting the opinions of actual lawyers who will likely argue the other side of the issue. Obviously, those opinions would not be for the purpose of persuading me; it would be for the purpose of having those opinions on the record.
Ultimately, the legal question will be the most important here because it will determine whether many of the the just over 280 units allocated for construction under the High-Density Housing Overlay are ultimately built.
Given the ability of the Grand County Commission to amend its ordinances and set policy, there is also an important question of what the land use code should say. Should units built after these first 280 be available to purhcase by outside investors? Or should the HDHO market be a walled garden, accessible exclusively to locals?
As much as I might think that the county is undermining the original intent of the ordinance, working toward an end goal that will disadvantage rather than advantage local workers, and presenting an unsound argument in doing so, there is a buidling full of people that believe in what Sloan and Mila Dunbar-Irwin, the director of the planning department, are presenting.
The county is on board for what it’s doing, so everyone might as well understand the argument they are presenting. But I need to offer a note about it, first:
The county is not making the most sound possible argument.
There are a few versions of this argument that range from limiting HDHO ownership to natural persons who live and work in Grand County, meaning no local businesses or nonprofits would be allowed to buy them. There is also a version where those corporate entities are allowed to participate, and that is the argument that the county is presenting.
I find the stricter argument more persuasive because it is more totalizing and coherent, but this is not an exercise in presenting a sound argument that I like. This is about presenting the county’s actual argument and filling in the gaps with the strongest evidence or persuasion possible, in part to challenge my own view, but mostly to set the scene for what is to come in the debate.
Without further ado, here is the logic that county officials are offering in support of their efforts to restrict HDHO ownership to local individuals, businesses, and nonprofits:
The case for reserving HDHO units for local ownership
What Grand County Attorney Christina Sloan thinks
The first version of this argument presented to me came from Sloan. In my naïveté, I believed that she had misunderstood the intent of the High-Density Housing Overlay. I do still think that, to some extent, but she does have a view of the ordinance that is clearly stated. Here were the first points she brought up to me:
- The legislative intent of the HDHO was that only locals qualified to be owners of HDHO units.
- If it were otherwise, enforcement would be “impossible.”
- The program collapses unless the qualification trigger is ownership.
- The language in the Land Use Code is sufficient to enforce this interpretation because it says that it shall be a violation to sell an HDHO unit to anyone other than a qualified household.
I said that I thought that the High-Density Housing Overlay was about occupancy, not ownership. She said that was not the county’s position and repeated the fourth point. Then she said this:
She went on to cite 4.7.11.A, circling the part that says it is illegal “to sell or rent an HDHO lot” to a non-qualified household, and she added this:
We now know where they got “backwards” on this. Grand County Planning and Economic Development staff told developers that they would be in compliance with the code if they had outside investors fund the projects — that the only thing that really mattered was that a local occupied the unit. There is also an argument that developers gained this understanding of the code because it was, in fact, the original intent of the HDHO ordinance.
At the very least, though, Sloan acknowledges that developers may have gotten bad advice. But, she added, the county is not legally liable for its staff’s interpretation of code, so even if staff misrepresented the meaning of the code, that ultimately is not the county’s legal problem.
What Grand County Planning Director Mila Dunbar-Irwin thinks
The next part that is important to acknowledge is Dunbar-Irwin’s version of the argument, which she provided to me in an email. Again, 4.7.11.A is pivotal in the matter, and she agreed that the intent of the HDHO was to enable local homeownership, and allowing outside investors to buy up the units would be antithetical to that.
One of the novel parts of the argument she presented dug into the enforcement piece that Sloan touched on:
She then elaborated on the market effects playing out in Moab. She said that prices for rent can “easily go beyond what people should be paying” when there is a squeeze in the rental market, which she implied Moab had.
She went on about “unlimited” supply of locals and limited housing opportunities, which drives up prices. She also added what reads to me as a critique of the HDHO itself:
Of course, it was by design that the High-Density Housing Overlay did not include price controls. The City of Moab’s Planned Affordable Development ordinance, which passed soon after HDHO as a response to the county’s efforts (to signal that the city was also trying to do something), does include price controls. Perhaps not coincidentally, it has not been adopted.
To the point about people moving here, paying too much for rent, then leaving, Dunbar-Irwin made a compelling case that such does not and effectively cannot uccur in the ownership market.
The very next thing she said, I think, is at the core of the county’s argument about this:
Dunbar-Irwin is arguing that the purpose of the High-Density Housing Overlay is to create a second market for homeownership — a walled garden where only locals can play. She says that this will push prices down, which would happen because sellers want to sell, and if the only people elligible to buy are couples with service industry jobs, the prices are going to be very low compared to what a person might pay for a second home or overnight rental property.
She’s right. Such a program would lower prices. The Vail InDEED program in Vail, Colorado works this way; units deed restricted under the program may only be owned — owned — by a natural person with a job in Vail. Locally based corporations can’t buy the homes; the owner can rent it out to another local, but it must at all times be occupied by a local. It has driven prices down on houses deed restricted through the program, and it has reserved a pool of housing guaranteed to be occupied by locals.
But, not even Sloan believes that the end goal of the HDHO is to restrict ownership to natural persons working in Grand County.
Synthesizing the arguments
Sloan said in a text when we were first talking about this disagreement that, by her reading of the HDHO, local businesses qualified to purchase HDHO units.
Sloan is not saying directly there that Bynum’s business or Wong’s business could be the buyer, but it is implicit in the statement because it just is not feasible that Mike Bynum personally would own and manage rental properties. He would have his company do that.
On top of that, when I asked later about whether 4.7.11.A actually allows a local coporation to purchase an HDHO unit, she basically said it did, and the county is now working on revising the rules and regulations to clarify that, yes, local businesses and nonprofits qualify to purchase HDHO units, as long as they then rent them out to local workers.
This might also be Dunbar-Irwin’s view, as well, but it’s not totally clear to me. Here’s something she said that gets at this point:
To be charitable
With all of this in mind, I want to close by saying that I think the most sound version of the argument that county staff are making is about limiting ownership to local, natural persons. Opening the market to a corporation whose primary place of business is Moab, to me, seems to open up the possibility of local companies signing agreements with outside investors so that it is ultimately outside investors that control local units.
A more totalizing theory of the case here would be that the Vail InDEED program has the right idea. Make owners be locals, and make them be individuals. This creates a market that radically improves the prospects of many locals to purchase a home. However, that policy might also leave behind low-wage workers who would be unable to afford any kind of reasonable mortgage.
How do these low-wage workers find housing? How do we ensure that Grand County builds enough housing of all forms — apartments and multi-family units, in particular — to accomodate our working poor?
The answer would seem to be: Enable higher density development, which is explicitly what the High-Density Housing Overlay aims to do. While developers argue that the only economical way to make those projects happen is to go to a wide open market for financing because no local couple is going to buy a four-plex.
Let me revise: There might be a local couple in Moab willing and able to buy a four-plex, but there aren’t enough such couples or wealthy enough couples to finance multiple multi-family units.
On the other hand, if Grand wants developers to sell units to individuals even in the case of multi-family units, the condominium model might be worthwile to consider. Rather than trying to sell multi-family units to a local corporation, perhaps developers can divvy the units themselves and sell them to locals.
But that is a very naiscent idea. I have no idea whether it’s feasible. Perhaps I’ll ask the developers.