CIVIC CRONICLES: Housing hopes

By on August 18, 2015

Economist tackles development in the valley

150819CivicChronicles

Jackson Hole, Wyoming – An assembly of about two dozen packed into a 300-square-foot conference room at the Jackson Hole Conservation Alliance for a meeting about the future of housing in Teton County. How apropos. That’s about the tenant-to-housing ratio currently necessary to house all of the valley’s homeless.

Expert economist consultant Todd Chase, an FCS GROUP principle who specializes in analyzing communities like Jackson Hole, gave his take on the Hole’s dilemma. The study accurately depicted the community’s challenges but was short on answers and, at times, as grim as all know it to be.

“How do you accommodate [the additional growth anticipated] in a community this size?” Chase speculated. “It’s very difficult and we haven’t found any data that suggests you can.”

Dum-dee-dum-dum.

Chase said he has familiarity with similar communities like Aspen, Colo., and Bend, Ore., but Jackson Hole was in a class all its own. “Each case is unique. There are market forces driving it. Unique challenges,” he admitted. “But little did I know there would be a stack this big [gestures with a wide set separation of hands] of this smaller community. More so than some of the larger cities we’ve studied. A 60-day project turned into a 120-day project just to understand everything.”

FCS research provided an interesting third-party observation of the valley’s housing crunch – one that identified things government is doing right, doing wrong and has left off the table thus far.

Current growth predictions say 5,377 more people will move into the valley in the next decade. That will mean 2,292 additional households and 3,960 more dwelling units, according to Chase.

“It paints a picture for a need for housing,” Chase said matter-of-factly. “Where are you going to accommodate 1,400 more units? I don’t know. That’s something you are going to have to find out. Apartment zoning, in particular, is troublesome. Can you put 2,300 additional homes in any complete neighborhood today? It’s probably not practical or possible under today’s zoning. There are few options now and in 10 years your available places will most certainly be gone.”

Demand detected

Chase first dove into the county’s commercial-to-residential mix, which he called “out of balance.” At one point, he said the valley could use less T-shirt shops and more grocery stores. A statement that elicited groans from the audience who believed Smiths, Albertsons, Jackson Whole Grocer and Lucky’s Market were more than enough choices for milk and bread. Chase revised his opinion saying department-type stores where items like furniture could be procured was what he was driving at.

Another bullet point offered by Chase was his astonishment at how underserved the hotel market was here. “The lodging demand potential was a surprise to us,” he said. “More people are coming here and migrating here. The market, on its own, would build 20,000 to 22,000 more hotel rooms if there was a place to put them.”

Chase speculated the market could easily handle one additional major hotel every year for the next 24 years. He did not offer an idea as to how many pup tents would need to be pitched in Curtis Canyon for employees of these hotels.

Growth in commercial and light industrial zoning would also be in demand in the coming decade, Chase said. They would provide “good jobs and good wages” for engineers, accountants, lawyers and the like, according to Chase. About 600,000 additional square feet of office or flex space could be accommodated over the next 10 years.

While some staggering numbers have been made public – 3.3 million square feet of commercial build out potential has been identified – Chase said a realistic number, if the commercial-housing mix was better balanced, would be half that and best met with a Target or a Walmart.

Supply solutions

FCS prefers market-based solutions for Jackson Hole. They also suggested a modified transfer of development rights, or TDR, a program that would preserve landowners’ assets by shifting their right-to-build to a more desirable development location. It’s a model electeds at the town and county have been reluctant to embrace in the past. In conclusion, Chase said government needed to get out of the way of developers and stop making the process of building in the town and county so cumbersome and expensive.

“We like to support market-based incentives in general,” Chase said. “Are your current fee structures helpful? We don’t think they are. There needs to be more creativity. Deed-restricted housing, for instance, should have fee-in-lieu waived or lowered. Parking requirements should be reduced and height [allowance] increased. TDRs could also be part of this discussion.”

Chase acknowledged a TDR model would have to be tweaked to work in Jackson Hole and would likely face legal challenges. He said colleagues Timothy Lindstrom and Skip Swenson deemed TDR “basically legal.”

Given a choice, developers would build mansions and condos, Chase said. They aren’t interested in apartment complexes and apartments don’t really work in Jackson Hole.

“Ideally, the market would love for everyone to live in a house with a white picket fence,” Chase said. “It’s the American dream, but it’s probably the hardest to accommodate here. Generally, developers are looking for a financial feasibility of getting about 20 percent returns on investments. Assuming a developer can even afford the land, we found everything could work – [single family homes, townhomes, condos] – everything pretty much except apartments.”

Chase said after “doing the math” the only way anyone would choose to build apartments is if fee-in-lieu went away, parking was reduced to one space per unit or less, commercial was added to the first floor, and the town allowed buildings to four-stories or higher.

Future forecast

Moving forward, Chase says unifying all the players is crucial. He found Teton County has a lot of people with something at stake in future development. “Having two different housing authorities also makes things more complicated,” he said.

Fixing a housing crisis will cost money. A dedicated source of funding like a specificpurpose excise tax (SPET) or a talked-about additional penny of sales tax were great options, Chase said.

“I think you guys have done the best you can given the resources you have,” Chase said. “You can do it.” PJH

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