Overviewing the HDHO appeals and responses
Case numbers
Grand County Attorney Christina Sloan said that these are administrative rather than judicial appeals, so I don’t see why there are case numbers, but there are.
- Murphy Flats: 210700024
- Sandstone Cottages: 210700025
- Peak View: None
Filed documents
The response documents are new as of yesterday.
Appeal hearing dates
- Sandstone Cottages
- Monday, May 3 at 1:00 p.m.
- Peak View
- Tuesday, May 4 at 9:00 a.m.
- Murphy Flats
- Thursday, May 6 at 9:00 a.m.
Some quotes from the appeals and responses
The County’s interpretation that the Enforcement Provision justifies the Ownership Requirement is isolated and out of harmony with the rest of the ordinance.
While the legislative history includes much discussion about economics, there is nothing in the legislative intent or language that made it into the HDHO Ordinance that affirmatively
Price caps and income qualifications were unnecessary because, by deed restricting the ownership and rentals of the HDHO units and lots for the County’s essential workforce only, home prices would deflate to what locals could afford.
On January 26, 2021, Developer created an online Facebook event in which it gave locals only 8 days to purchase HDHO units in Murphy Flats before it “open[ed] them on Zillow and Facebook to notify the masses” and encouraged “locals” to “get ‘em while you can!” See [link].
As a result of the Facebook event, citizens and commissioners filed complaints with the Commission Administrator’s and County Attorney’s offices regarding Developer’s anticipated breach of Ordinance No. 600.01 and LUC Section 4.7.
The High Density Housing Ordinance, contained within the County Land Use Code, contains no such restriction on ownership and contemplates by its plain language that only residents need to be qualified individuals, and owners may be separate entities.
“We anticipate these units to be more affordable than unrestricted market-rate units. Buyers and renters of restricted HDHO lots or units will not have to compete with the spending power of non-residents,” said Levine, meaning that, at least in theory, the selling prices of those units will be limited by the incomes of Grand County residents.
There is not, however, Levine noted, an explicit income-based component to the deed restriction required in the HDHO . . . “While we suspect the restricted HDHO units will be cheaper than unrestricted market-rate units, due to the elimination of competition with second homeowners and non-residents and overnight lodging units, we don’t know for certain if, or how much, cheaper they will be,” Levine noted.
See Rachel Fixen, Closing the Gap: New Developments May Aid Median-Income Homebuyers (Feb. 6, 2020), [link].
The Johnsons (whose project is Peak View) said that the rules and regulations are administrative rule changes that “materially amend” the ordinance.
They liken this to a case where the Utah Division of Occupational and Professional Licensing adopted a rule that candidates for psychologist licensing have a degree whose content was primarily psychological. The court held that this was an invalid rule that “engrafted” onto the law that specified that the doctoral degree specifically be in psychology.
In the Peak View case, the Johnsons claimed that the new rules constitute an “attempt to engraft additional requirements” onto the existing HDHO rules. They cite the part of the code that reads as follows:
HDHO lots and units may be owner-occupied or renter-occupied as long as the residents meet the occupancy and active employment requirements of this subsection A.
Grand County Land Use Code, Section 4.7.4(A)
But then, they get to the heart of the matter:
The County Improperly Relies on the Enforcement Section of the HDHO Ordinance in its Interpretation of the Land Use Code because such an interpretation is out of harmony with (i) the plain language and (ii) the context of the HDHO Ordinance.
This feels like it’s really addressing the core thing here. The enforcement section is at odds with the rest of the ordinance insofar as the county is able to (at least try to) exploit it to reach a legislative end administratively.
If the county is able to convince the appeal officer (and, possibly later, a judge) that this was an administrative rather than legislative decision, then the change doesn’t violate any kind of vested interest by the developers.
If not, the developers have a vested right to be able to sell their units to outside investors, and the new rules and regulations can only be applied to HDHO developments that are accepted in 2021 or later.
The rest appears to be subordinate issues. Some of it is throwing stuff at the wall to see what sticks; other parts are completing the argument that follow if they can prove the hardest part: that the rules and regulations were a legislative rather than administrative change.
The key is whether the appeal officer will let Sloan talk long enough to badger him (it’s a him; I just can’t remember his name) into believing that this was the HDHO intent all along (even though the thing reads to clearly indicate otherwise).
How the defense is busted
Now, the Appellant ( “Developer “), rich in density after County approval of its zoning map amendment and with much money to gain, seeks to invalidate the Rules and Regulations in an attempt to undermine the effectiveness of the HDHO Ordinance, the County’s award-winning workforce housing legislation.
Grand County’s response to Peak View
Piece by piece:
rich in density after County approval of its zoning map amendment
How generous of the county to allow developers to do their job of building housing. I’m sure that additional (and certainly not “rich”) density doesn’t benefit the county at all.
and with much money to gain
Does Sloan realize that the county also gains when developers gain? Property tax!
seeks to invalidate the Rules and Regulation
What they’re actually seeking to do is reverse the new part of the rules that prohibit them from selling to outside investors.
in an attempt to undermine the effectiveness of the HDHO Ordinance
I’m sure those evil developers really are hoping to undermine the ordinance that enabled their development. That for sure seems plausible.
the County’s award-winning workforce housing legislation.
The department that won that award is against the current county commission on this matter.
Over a period of years predating the HDHO drafting process, County staff and elected officials had considered a number of legislative strategies for incentivizing workforce housing. Most affordable housing programs in comparable Western tourism economies, such as Aspen, Vail, and Jackson Hole, require sales price caps and income qualifications which are effective but administratively costly to the local government to implement and enforce. Accordingly, the Commission zeroed in on a simpler, progressive model - one that relied on a local ownership requirement to repress prices to levels supported by local wages.
Grand County’s response to Peak View (emphasis added)
The commission didn’t really zero in on anything. They voted down the HDHO at first but brought it back with amendments; they certainly didn’t discuss this ownership versus occupancy issue during that interim period.
Based on the discussions I’ve reviewed, that point only ever came up when Grand County Council Member Evan Clapper asked Affordable Housing and Economic Development Coordinator JD McClanahan about it, and it was before the first vote.
That exchange was on June 5, 2018. It was perhaps the only occasions in which the subject of an outside owner renting to locals was explicitly mentioned.
The question came amid a discussion between county staff and the county council about the core mechanics of the HDHO: Using deed restrictions rather than price caps or appreciation caps to achieve affordability.
Clapper asked McClanahan, “If the homeowner doesn’t live here, but they’re renting it out, would that qualify? “
In response, McClanahan said, “Yeah, as long as it’s not short-term rentals. As long as the people they’re renting it out to are there for at least six months.”
A brief pause followed, and then-Council Member Curtis Wells changed the topic with a comment about his concern that owners of long-term rentals could try to skirt the land use code and operate an HDHO unit as a short-term rental, defeating the purpose of the ordinance.
Disappointingly, only Murphy Flats includes this exchange in their written appeal.
Regardless, should legislative intent play a part in this appeal, there are numerous statements in the legislative history that support the plain language interpretation of the HDHO Ordinance set forth above. These statements were also included in Appellant’s comments to the County Commission and include, from the June 2018 Meeting:
- Clapper: “if the home owner does not live here, but they’re renting it out, would that qualify?” Staff member JD: “yeah…”
The truth of this matter is that it basically never came up before or after in public meetings.
The county staff had a clear idea in their head of how they wanted the ordinance to look; the commission did not in clear terms express a clear preference one way or the other on the matter — as much as Sloan insists their words mean something other than what they said.
One example of Sloan stretching the meaning of a discussion is with respect to a discussion cited in the response from June 5, 2018 (though it actually happened during the same June 8 meeting previously mentioned). She misquotes it in the response, so here’s what it actually went:
How confident are you at this point that after that minimum, the economic viability is still intact for development in those areas? It just seems, back of the napkin, that’s a lot of units.
Grand County Council Member Curtis Wells
Yeah. I mean, in theory, it’s not going to be capped to affordability. All of these markets can be developed to market rate. So ultimately, it’s up to the developer or the Realtor to sell those units. We totally remove the affordability aspect of this and said, “As long as you’re not selling it to second homeowners or—”
We’re still trying to figure out some of the legal aspects of the deed restriction and what defines primary residency—
Community and Economic Development Specialist Kaitlin Myers
So you’re not going to cap the value of the unit with a deed restriction?
Wells
No, so we are totally giving it out to— the market will kind of do what it does.
Myers
So, you’re deed restricting it to certain criteria.
Wells
Right, so right now, we are only planning on deed restricting to primary residency.
Myers
I see. Okay.
Wells
And in the policy right now, that means homeowners need to be here nine months minimum out of the year and renters have to rent for at least six months.
McClanahan
Guess what followed that interaction? Here’s a hint: Sloan has never quoted the following interaction in public.
If the homeowner doesn’t live here, but they’re renting it out, would that qualify?
Clapper
Yeah, as long as it’s not short-term rentals. As long as the people they’re renting it out to are there for at least six months.
McClanahan
This should highlight just how dishonest Sloan’s representation of the factual matters are. The attorneys for the HDHO developers have stretched their legal arguments and some facts, but they at least are telling the truth about the legislative intent and discussions about the matter.