Avon Town Council to Consider 4% Use Tax on New Construction for Community Housing
Input needed from Avon voters
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Avon collected $2.1M on the 4% sales tax on construction materials from 2022 to present day. A 4% use tax would have allowed Avon to collect approximately $4.3M on Frontgate, One Riverfront and Spring Hill Suites. Over the last 10 years Avon would have collected $6M more in revenues with a 4% Use Tax.
Frontgate
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Avon collected $2.1M on the 4% sales tax on construction materials from 2022 to present day. A 4% use tax would have allowed Avon to collect approximately $4.3M on Frontgate, One Riverfront and Spring Hill Suites. Over the last 10 years Avon would have collected $6M more in revenues with a 4% Use Tax.
One Riverfront
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Avon collected $2.1M on the 4% sales tax on construction materials from 2022 to present day. A 4% use tax would have allowed Avon to collect approximately $4.3M on Frontgate, One Riverfront and Spring Hill Suites. Over the last 10 years Avon would have collected $6M more in revenues with a 4% Use Tax.
Spring Hill Suites
LACK OF COMMUNITY HOUSING
The lack of affordable workforce housing in Eagle County continues to be the biggest crisis for our region. The high cost of housing affects many struggling households in Avon and impacts local businesses and service providers that strive to fill employment positions. Avon defines “Community Housing” as housing for full-time residents that serves all income levels, from entry level to professional jobs. Avon Town Council has declared the development and acquisition of Community Housing to be the number one priority for Avon. Development and acquisition of Community Housing is very complex and expensive. Avon Town Council is considering a 4% Use Tax on New Construction for Community Housing to increase housing for the Avon community.
“The Mi Casa program was instrumental in helping us purchase a multi bedroom home to make room for our growing family in the town we love. The best part of the program is that it not only helped us purchase our first family home, it will keep the property for future locals to have the same opportunity as us to build a life in the valley.”
– Chris Caruso
¡Mi Casa Avon! buy-down program has helped 44 households acquire a home in Avon. Avon has spent $3M since adopting the program in 2020. The average downpayment assistance is $70,376.
AVON’S COMMUNITY HOUSING EFFORTS
Avon Town Council first adopted the Avon Community Housing Plan in 2018. Since adopting this plan Avon has accomplished the following:
- Adopted tax and fee waivers to provide financial incentives for new Community Housing construction
- Amended Avon Development Code to adopt 20% employee housing mitigation on new development
- Established the ¡Mi Casa Avon! home buyer assistance program, which has helped 44 households purchase a home in Avon
- Amended the Light Industrial-Commercial Zone District to allow Community Housing, resulting in a remodel to convert office space to nine workforce housing apartments and approval of a new subdivision for 53 workforce housing townhomes
- Hired Avon’s first full-time Housing Planner dedicated to Community Housing projects and programs
- Updated Short Term Rental regulations to limit Short Term Rentals outside the Town Core
- Adopted a 2% Short Term Rental tax dedicated to Community Housing, which generates approximately $1 Million per year
- Allocated 10% of the Town’s real estate transfer tax to Community Housing, which generates approximately $560,000 per year
- Adopted the Avon Downtown Development Authority, which dedicates 50% of the property tax revenue from new development to Community Housing and is expected to generate $250,000 in 2025
- Secured state grants for housing planning, including (1) creating an inventory of land for potential development of new workforce housing; (2) updating the 2017 Regional Housing Needs Assessment; and (3) exploring the formation of a multi-jurisdictional housing authority with Eagle County
- Adopted amendments to Comprehensive Plan to identify Town owned properties that could be developed for 270+ new Community Housing units
- Started annexation and partnership with State Land Board for development of 700 units of Community Housing
“A sustainable and healthy community requires affordable housing for our workforce”
Mayor Amy Phillips
ADDITIONAL FUNDING NEEDED
Additional funding sources are needed to increase and accelerate the amount of Community Housing that can be developed and acquired. The average іMi Casa Avon! downpayment assistance amount is $70,000 per residence. Subsidies for development of new Community Housing can be as much as $200,000 to $250,000 per unit. Current revenues for Community Housing are approximately $1.75 Million per year. Avon Town Council is considering the adoption of a 4% Use Tax on New Construction and dedicating the annual revenue source to Community Housing, which is estimated to generate another $500,000 per year. The 4% Use Tax on New Construction would replace the existing 4% Sales Tax on construction materials. Small home improvement projects and the development of new Community Housing projects would be exempt from paying the Use Tax. The Town of Avon actively pursues grant funding from state and federal sources as well as seeks partnerships with private developers.
“We cannot just build our way out of this housing crisis. An effective housing program will require BOTH new construction and acquisition of deed restrictions on existing housing stock.”
Town Manager Eric Heil
MAGELLAN STRATEGIES VOTER SURVEY
As part of community outreach this summer Avon hired Magellan Strategies to conduct a voter survey in June. The results of the survey indicated that a majority of voters would support a 4% Use Tax on New Construction for Community Housing with 57% saying they would vote YES and 37% saying they would vote NO. Respondents supporting a potential Use Tax recognized the critical shortage of workforce housing and felt that a tax on new large developments rather than taxing local residents was fair and equitable.
SURVEY SAYS 57% OF AVON VOTERS WOULD SUPPORT A 4% USE TAX ON NEW CONSTRUCTION
INPUT FROM AVON VOTERS NEEDED
Avon Town Council will consider taking action at its August Council meetings to refer a 4% Use Tax ballot question to the November 5, 2024 general election. There are a lot more details concerning a potential Use Tax which can be found at Avon.org/Engage. Comments from Avon voters are welcomed and encouraged. Please visit Avon.org/Engage for more information on the proposed Use Tax and to provide comments.
