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Mountain communities will ask voters to pass tax increases to help with housing

Posted at 7:51 PM, Oct 22, 2021

VAIL, Colo. — All across Colorado, finding affordable housing has become much more of a challenge in recent years. In mountain communities, the affordable housing problem has become so serious some are calling it a crisis.

Different towns have tried a variety of approaches to try to help employees find housing, from deed restriction programs to modular housing to proposed limits on short-term rentals.

In November, voters in several mountain areas will also be asked whether they want to raise some taxes to help tackle the crisis.

Avon’s appeal

In Avon, voters are facing a ballot question about raising the tax on short-term rental properties like AirBnbs and VRBOs to help fund housing projects.

“Short-term rental migration from the long-term housing has been an issue we’ve been talking about for all of the last five years,” said Amy Phillips, who sits on Avon’s town council.

The projected $1.5 million in proceeds from the proposed 2% short-term rental tax would be channeled into Avon’s Community Housing fund.

That money would be used to help create new living opportunities for year-round employees to buy down deeds or help fund new developments.

The tax would apply to rentals of 30 days or less but would not be applied to hotels, motels or bed and breakfast establishments.

Proponents argue many businesses are not able to fill vacancies because of a lack of affordable housing. They believe this is a way to make sure visitors help contribute to Avon’s future.

Opponents say the town already has a high tax rate, and they worry this additional tax will discourage visitors from coming. They also argue that these community housing projects could increase congestion in the town.

“The con is basically is this going to scare away business? The pro pretty much is this is an issue, we need permanent funding and rather than continuing to dip into other sources, doesn’t it makes sense for us to tax the market that is actually helping to exasperate the housing issue?” Phillips said.

Other mountain towns like Telluride, Ouray and Leadville are also considering similar measures.

Vail’s vision

In Vail, voters will be asked whether they would support an increase to the sales tax to help pay for housing.

The proposed .5% sales tax is estimated to bring in about $4.3 million annually. The money would be used to fund things like the town’s InDeed program as well as new developments.

In an effort to lessen the burden on families, the town council decided to exempt groceries from the proposed sales tax.

“It creates a system where our visitors will help pay the sales tax and create the housing that really supports their visits to Vail,” said Jenn Bruno, who sits on the town council.

Bruno, who is getting ready to end her tenure on council, says she has been working on affordable housing for the past eight years, and she believes this dedicated fund could help make a big difference from families.

She also says that helping employees find a place to live that’s close to where they work could help with Vail’s environmental footprint since they would have a shorter commute.

“It will in no way fix the crisis, but we have to start somewhere and this is the best place to start,” Bruno said.

Crested Butte’s ballot

Crested Butte is also asking its voters in November for a similar .5% sales tax increase to help with housing. Food for home consumption would also be exempt from this proposed tax to help locals.

Additionally, the town has included a provision in the ballot asking voters to approve a $2,500 community housing tax on second homes.

There are homes that are not occupied at least a consecutive six months out of the year. If approved, the tax would begin in 2022.

A separate ballot question asks voters to approve of a 2.5% increase on short-term rental taxes to help with affordable housing.

Summit County’s supposition

Summit County is not asking for any new taxes to help pay for affordable housing. Instead, the county commissioners have put a question on the ballot asking voters to extend a current sales tax to help.

“In Summit County, we’re extremely lucky that we’ve had voter support in the past for funding initiatives that are directly related to housing. Many of our workforce development in Summit County were built using those funds in the past,” commissioner Tamara Pogue said.

Smith Ranch in Silverthorne, Wintergreen in Keystone and Alta Verde in Breckenridge are all workforce housing development projects that have been used with the help of funding from this tax.

Ballot Question 6B asks voters to allow the county continue to collect an existing .6% sales tax to continue its work on affordable housing.

“Without it, it’s just not enough money to build or to add or to preserve housing in Summit County,” Pogue said.

The sales tax would be continued for another 20 years under the proposal. The money would then be leveraged with bonding and different financing measures to pay for future projects.

The county is also hoping to access some state and federal dollars to help fund affordable workforce housing projects.

“I think everybody in Summit County is pretty much in agreement that our housing situation is dire and that we need to do everything we can,” Pogue said.

Pogue says the commissioners considered asking voters to not only keep the tax but raise it to speed along some of these developments but decided against it because the county’s economy is still fragile and trying to recover from the pandemic.

Across Colorado, mountain communities are taking different approaches to the affordable housing crunch. Ultimately, it will be up to voters to decide whether these ideas are the right ones for their communities.