Earning average median income in Eagle County will be defined as ‘low income’
County housing authority proposed new definition to spur development of workforce rental units
In Eagle County, earning the average median income will soon be defined as the threshold for low income housing.
That definition will have a narrow scope, however — it will be specifically tied to the Eagle County Housing Development Authority’s property tax exemption used to incentivize workforce rental projects. The exemption is not applicable to for sale units.
Last week, representatives from the county’s housing department discussed the low income definition with the Eagle County Board of Commissioners. They noted the reason for the action is to provide clarity, particularly to the development community.
Providing property tax exemptions is the housing authority’s biggest tool to spur construction of workforce housing, noted Tori Franks, of Tori Franks Real Estate and Development Manager for Eagle County Housing. Through a process that is allowed by Colorado State Statute, the housing authority can offer a project developer an exemption from paying property taxes. In exchange for the property tax hiatus, the developer must guarantee that rental units will go to people who meet the county’s low income definition and that rental prices are attainable to those defined renters.
Currently the county’s housing authority doesn’t have its own definition of low income, but U.S. Housing and Urban Development defines it as earning 60% of the average median income. That translates locally to $59,940 annually for a family of four and there have been projects in Eagle County developed using that criteria. Most recently, Spring Creek Apartments in Gypsum provided 150 units for renters earning between 30% and 60% of the county’s AMI. That project also has 66 units for renters who earn 80% of the county’s AMI.
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“We have a serious shortage with regard to affordable housing,” Franks said during Tuesday’s hearing. “We have gaps in our affordable and workforce housing in all places and in most parts of the county, a gap exists for 60% AMI to 100% AMI.”
Here’s what that gap looks like numerically. Following is the county’s AMI based on household size:
- $69,930 (1 person)
- $79,920 (2 person)
- $89,910 (3 person)
- $99,900 (4 person)
For renters earning 100% of the county’s AMI, the maximum affordable monthly rent is $2,020. For renters earning between 60% and 80% of the county’s AMI, the maximum affordable monthly rent is $1,610.
Franks said that it’s difficult to put together financing for rental projects for tenants who earn between 60% and 100% of the county’s AMI but by expanding the low income definition, the county hopes to draw more interest.
“Maybe it is an incentive that brings people in,” she said.
Lost revenue
While a property tax exemption helps developers build projects and provides additional workforce housing in the community, it also means local governments have to forego funding. That’s the rub with the process.
For Tom Edwards, a member of the Gypsum Town Council and the Eagle County Housing and Development Authority Advisory Committee, the 15-year deadline helps address his concern with property tax exemptions.
“We are giving people the benefit for 15 years and then they are part of the community and they need to contribute to the community,” Edwards said.
Commissioner Kathy Chandler-Henry characterized property tax exemptions as an effective tool to get workforce housing units built.
“It’s almost like a down payment assistance loan,” she said. “This (the new definition) looks like a pretty big addition to the toolbox.”
Franks added that the 100% AMI definition can be adjusted later to meet future market conditions.
“This is just the start of the housing authority’s effort to establish policy,” she said.
The commissioners gave informal approval to the new low income definition and directed the county attorney’s office to develop a formal resolution to reflect the change.
