Housing Working Group Meeting #2

Strategies & Implementation Planning

Thursday, September 4, 2025

Part 1: Strategies 1-3

Morning Session

Policies & Incentives
Existing Stock
Development

Part 2: Strategy 4

Afternoon Session

Revenue Feasibility
Financial Deep Dive

Working Lunch: Continue discussions while we eat
Today's Focus: Evaluate strategies, identify priorities, and shape implementation

Today's Objectives

Review Strategies

Evaluate four core housing strategies and their associated actions

Discuss Trade-offs

Consider feasibility, community support, and resource requirements

Deep Dive Revenue

Analyze sustainable funding options with detailed financial feasibility

Set Priorities

Identify which strategies to pursue first based on impact and capacity

Quick Recap: Our Housing Goals

"To provide housing opportunities across all life stages"

40 Housing Units
33+ rental units
6-8 ownership opportunities
Plus strategic land banking
Tenure Balance
Move toward 70/30 owner/rental
From current 80/20 split
Year-Round Focus
Increase to 35% year-round
From current 28%
Income Targets
50% below 80% AMI
Focus on workforce needs

Four Core Strategies

1. Policies & Incentives

Remove barriers, generate revenue, realign development

Low Cost

2. Optimize Existing Stock

Better use of current housing through conversions and rehab

Low-Medium Cost

3. Strategic Development

New construction & land banking for future

High Cost

4. Sustainable Revenue

Create ongoing funding streams

Variable Cost
These strategies work best together—each addresses a different piece of the puzzle

How to Evaluate These Strategies

Key Questions to Consider:

  • Feasibility: Do we have the staff capacity? Will the community support this?
  • Speed vs. Impact: Quick wins or long-term solutions? Symptoms or root causes?
  • Risk: Could this discourage development? Create opposition?
  • Local Values: Does this align with our character? Who benefits and who pays?

Strategy 1: Policies & Incentives

Implementation Cost: Low • Level of Effort: Moderate

Key Actions to Consider

Land Use & Zoning Reform
• By-right approval for housing
• Density bonuses for deed-restricted
• Streamlined ADU ordinance
• Fast-track permitting
Development Fees
• Impact/linkage fees: $2-5K per unit
• Enhanced STR fees: $500-1,000/year
• Cash-in-lieu options
• Employee mitigation (voluntary)
Inclusionary Zoning
• 10-20% affordable in new projects
• Example: 10-unit project = 2 workforce
• Or payment to housing fund
• Proven in Telluride, Crested Butte
Marketplace Incentives
• Property tax cuts for year-round leases
• Fee waivers for affordable units
• STR conversion grants
• Homeowner assistance programs

Strategy 1: Colorado Examples

Crested Butte
30% affordable requirement or in-lieu fees. Streamlined permitting for deed-restricted projects.
Telluride
Extensive deed restrictions, inclusionary zoning, fast-track affordable housing approvals.
Breckenridge
Development impact fees, workforce requirements for commercial projects.
Montrose
ADUs in REDO zone get $300 tap fees vs. $7,100 standard—huge savings.

Discussion Questions:

  • Do our current regulations favor vacation homes over workforce housing?
  • Should we require (not just encourage) affordable units in new developments?
  • Will developers accept new fees if paired with incentives?

Strategy 2: Optimize Existing Stock

Implementation Cost: Low-Moderate • Level of Effort: Low-Moderate

Key Actions to Consider

Conversion Programs
• $5,000 grant + tax break for STR→rental
• Master lease programs
• Deed restriction buy-downs
• Target: 3-5 conversions/year
Acquisition & Rehab
• Purchase existing homes
• Rehabilitate for workforce
• Partner with local trades
• Add deed restrictions
Homeowner Assistance
• Emergency repair grants (5-8/year)
• Energy efficiency upgrades
• Weatherization assistance
• Maintenance training
Preservation Tools
• Deed restrictions for affordability
• Right of first refusal programs
• Down payment assistance
• Prevent loss to second homes

Strategy 2: Colorado Examples

Vail InDEED
$11M spent to secure 165 units through deed restrictions—fraction of new construction cost.
Summit County
"Lease to Locals" connects second homeowners with local workers needing housing.
Gunnison County
ADU incentive programs with pre-approved plans and fee waivers.
Statewide
Weatherization and rehab programs using state and federal funding.

Discussion Questions:

  • How many vacant/seasonal homes could realistically convert?
  • What incentive level would motivate an STR owner to switch?
  • Cost of incentives vs. cost of new construction?

Strategy 3: Strategic Land Banking & Development

Implementation Cost: High • Level of Effort: High

Key Actions

Lake Fork Development
• 28 rental units on town land
• Mix of affordability levels
• Professional management
• Priority project for 2025-2026
Land Acquisition
• Identify 2-4 sites
• Focus on infill opportunities
• Secure options/purchase
• Prepare for future development
Development Partners
• Nonprofit developers
• Housing authority creation
• Regional collaboration
• Employer partnerships
Site Readiness
• Infrastructure planning
• Environmental reviews
• Conceptual site plans
• Zoning/entitlements

Colorado Models

Ridgway: Space to Create

28 units on town land

Fraser: Grand Park Village

78 units through public-private partnership

Chaffee Housing Trust

Community land trust for permanent affordability

Partner with experienced nonprofits?

Working Lunch Discussion

Continue Our Conversation Over Lunch

Quick Wins We've Identified

  • ✓ Policy changes can happen fast
  • ✓ STR conversions within months
  • ✓ Lake Fork already funded
  • ✓ Low-cost options exist

Challenges to Address

  • ✗ Limited staff capacity
  • ✗ Political will needed
  • ✗ High development costs
  • ✗ Land scarcity

Lunch Topics:

  • What surprised you most from the morning discussion?
  • Which strategies resonate most with your constituency?
  • What concerns need addressing before moving forward?
  • How can we build community support for these initiatives?

Part 2: Sustainable Housing Revenue

Strategy 4—Creating Ongoing Funding Streams

We can't solve a permanent problem with temporary grants

Why Revenue Matters

Dedicated local revenue means we can:
• Act quickly on opportunities
• Leverage outside funding (3:1 match typical)
• Prove we're serious about solving the crisis
• Build sustainable programs, not one-time projects

Revenue Options to Consider

Revenue Source Potential Annual Revenue Requirements Timeline
Enhanced STR Fees $25,000–$50,000 Ordinance update 2026
Impact/Linkage Fees $15,000–$25,000 Nexus study required 2027
Property Tax (0.5 mill) $150,000–$200,000 Voter Approval 2026+
Sales Tax (0.25%) $75,000–$100,000 Voter Approval 2026+
Lodging Tax/LMD $50,000–$100,000 Currently under study TBD
Employer Contributions $50,000–$100,000 Partnership agreements 2026
State/Federal Grants $500,000–$1M Applications, match Ongoing

Taxes vs. Fees: Key Trade-offs

Taxes (Voter Approval Required)

Pros:

  • Larger, more stable revenue
  • Broad base of support
  • Community buy-in through vote
  • Can leverage for grants

Cons:

  • Requires ballot measure
  • Campaign costs/effort
  • Risk of failure
  • Affects everyone equally

Fees (No Vote Required)

Pros:

  • Can implement quickly
  • Targets specific uses
  • User pays principle
  • Adjustable by council

Cons:

  • Smaller revenue potential
  • May discourage development
  • Legal requirements (nexus)
  • Collection/enforcement

What's Working in Other Communities

Summit County
0.6% sales tax (5A)
Generates $6M+ annually
Voter-approved 2016
Vail
2% construction materials tax
Funds deed restrictions
Established 2000
Winter Park
Lodging tax allocation
Portion to workforce housing
No new tax needed
Carbondale
3% marijuana tax
Dedicated to housing
Creative funding source
Steamboat Springs
0.5% accommodations tax
Supports housing authority
Targets visitor impact
Telluride
Real estate transfer fee
1% voluntary contribution
Significant revenue

Building Our Revenue Portfolio

Recommended Phased Approach

Phase 1: Quick Wins (2026)
• Enhanced STR fees
• General fund allocation
• Employer partnerships
Target: $100–150K annually
Phase 2: Build Support (2027)
• Impact fee implementation
• Grant applications
• Demonstrate success
Target: $200–250K annually
Phase 3: Major Ask (2028)
• Property or sales tax ballot
• Based on proven results
• Community campaign
Target: $300–400K annually
Long-term: Sustainable (2029+)
• Diversified portfolio
• Self-sustaining programs
• Regional partnerships
Target: $400K+ annually

Critical Revenue Questions for Discussion

Political Feasibility

  • What would voters support? Sales or property tax?
  • Demonstrate success with fees before asking for taxes?
  • How do we build trust and show stewardship?

Revenue Targets

  • How much do we need to make a difference?
  • Minimum to leverage state/federal funds?
  • Start small or go big?

Financial Reality Check

The Math We Face

• Lake Fork: $3–4 million total cost
• Per unit subsidy needed: $100–150K
• 40-unit goal = $4–6 million over 5 years
• Current housing revenue: ~$25,000 annually

Without new revenue, we're looking at one affordable unit every 4–6 years

What Revenue Can Do

• $200K annually = 2 units/year + leverages $600K in grants
• $300K annually = 3 units/year + land banking capability
• $400K annually = Sustainable program with reserves

Group Discussion: Setting Priorities

Which strategies should we pursue first?

Immediate (2025–26)

Start now with existing resources

Near-term (2026–27)

Requires some preparation

Medium-term (2027–28)

Needs community buy-in

Long-term (2029+)

Aspirational goals

Consider:

  • Best return on investment?
  • Feasible given our capacity?
  • What tools are missing?
  • What can we commit to?

Next Steps

After Today

Strategy Refinement

Incorporate your feedback
Develop funding details
Draft recommendations

Next Meeting

Implementation Planning

Review implementation plan
Finalize priorities
Confirm commitments

Your input today shapes the housing future of Lake City and Hinsdale County

Thank You!

Questions? Comments?
Let's work together to create housing solutions

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Meeting #2