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Home My WebLink About2021-09-14 VLHA Agenda Vail Local Housing Authority Agenda TOWN OF h" September 14, 2021 3:00 PM Zoom Virtual Meeting 75 S. Frontage Road -Vail, Colorado, 81657 ............... ._.__ .............................. ._.__ .............................. 1. Call to Order 1.1. Zoom Meeting 1 (call to order pre-executive session) 1.2. Zoom Meeting 2 (post executive session) 1.3. Call to Order 2. Citizen Participation 2.1. Citizen Participation 5 Min. 3. Approval of Minutes 3.1. VLHA August 24, 2021 Minutes 5 Min. 4. Main Agenda 4.1. Housing Vision - Ballot Iniitative 15 Min. Presenter: Scott Robson, Town Manager 4.2. Short Term Rental Study 10 Min. Presenter: George Ruther, Housing Director 4.3. Deed Restriction Compliance and Enforcement Policies Recommendation 30 Min. Presenter: George Ruther, Housing Director and Lynne Campbell, Housing Coordinator 5. Matters from the Chairman and Authority Members 5.1. Matters from the Chairman and Authority Members 10 Min. Presenter: Steve Lindstrom, Chairman 6. Executive Session 6.1. Executive Session per C.R.S. §24-6-402(4)(a)(e) - to discuss the purchase, 15 Min. acquisition, lease, transfer or sale of real, personal or other property interests and to determine positions relative to matters that may be subject to negotiations regarding: Vail InDEED applications and deed restrictions. Presenter: Lynne Campbell, Housing Coordinator 7. Any Action as a Result of Executive Session 7.1. Any Action as a Result of Executive Session 5 Min. 8. Adjournment 8.1. Adjournment 5:OOPM (estimate) 9. Future Agenda Items 9.1. . Land Banking (sale of GRFA) • Investment Banker Discussion - Long Term Housing Funding 10. Next Meeting Date 10.1. Next Meeting Date September 28, 2021 10.2. Future Meeting Dates: October 12, 2021 October 26, 2021 November 9, 2021 November 23, 2021 December, 14, 2021 December 28, 2021 Meeting agendas and materials can be accessed prior to meeting day on the Town of Vail website www.vailgov.com. All housing authority meetings are open to the public. Times and order of agenda are approximate, subject to change, and cannot be relied upon to determine at what time the Vail Local Housing Authority will discuss an item. Please call (970)479-2150 for additional information. Please call 711 for sign language interpretation 48 hours prior to meeting time. Housing Department TOWN OF ' VAI L LOCAL HOUSING AUTHORITYAGENDA MEMO ITEM/TOPIC: VLHA August 24, 2021 Minutes ATTACHMENTS: Description VLHAAugust 24, 2021 Minutes Vail Local Housing Authority Minutes T � F &) August 24, 2021 3:00 PM ZOOM Virtual Meeting 75 S. Frontage Road -Vail, Colorado, 81657 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- PRESENT ABSENT Steve Lindstrom James Wilkins Mary McDougall Molly Morales arrived just before executive session Greg Moffet STAFF George Ruther, Housing Director Lynne Campbell, Housing Coordinator 1. Call to Order 1.1 Zoom Meeting 1 (call to order pre-executive session) 1.2 Zoom Meeting 2 (post executive session) 1.3 Call to Order A quorum is present. Lindstrom called the meeting to order at 3:03 PM. 2. Citizen Participation 2.1 Citizen Participation No comments. 3. Approval of Minutes 3.1 VLHA August 10, 2021 Minutes MOTION: MOFFET SECOND: MC DOUGALL VOTE: 3-0 APPROVED 4. Main Agenda 4.1 Resolution No. 12, Series of 2021, a Resolution Approving the Purchase of a Deed Restriction Interest in Property (Type III Deed Restriction) in the Town of Vail Legally Described as Condominium Unit 205, Snow Lion Condominium, Eagle County, Colorado with a Physical Address of 1040 Vail View Drive, Unit 205, Vail Colorado; and Setting Forth Details in Regard Thereto. Presenter: Lynne Campbell, Housing Coordinator MOTION: MOFFET SECOND: MC DOUGALL VOTE: 3-0 APPROVED 4.2 Resolution No. 13, Series of 2021, a Resolution Approving the Purchase of a Deed Restriction Interest in Property (Type III Deed Restriction) in the Town of Vail Legally Described as Vail Das Schone Filing 2, Block G, Lot 10, part of Alpen Chalets Townhouse Building 2 Unit 3, Eagle County, Colorado with a Physical Address of 2388 Garmisch Drive, Unit 7, Vail Colorado; and Setting Forth Details in Regard Thereto. Presenter: Lynne Campbell, Housing Coordinator MOTION: MOFFET SECOND: MC DOUGALL VOTE: 3-0 APPROVED Lindstrom requested to add Resolution No. 14, Series of 2021 to the agenda after vote of executive session action. 4.3 Resolution No. 14, Series of 2021, a Resolution Approving Omnibus Amendment to Legal Description Relating to Lot 3 Middle Creek Village MOTION: MOFFET SECOND: MORALES VOTE: 4-0 APPROVED 5. Matters from the Chairman and Authority Members 5.1 Matters from the Chairman and Authority Members Presenter: Steve Lindstrom, Chairman Lindstrom notified the members the West Vail Master Plan was tabled at the August 23, 2021 PEC meeting until September 13, 2021. Council approved adding a 1/2% housing tax to the November ballot. The tax does not apply to groceries and funds will provide long term housing funds. Moffet motioned to leave the regular meeting to enter executive session. MOTION: MOFFET SECOND: MC DOUGALL VOTE: 3-0 APPROVED Authority member Morales joined the meeting at the start of executive session. The ZOOM meeting had technical difficulties due to town of Vail internet outages. 6. Executive Session 6.1 Executive Session per C.R.S. §24-6-402(4)(a)(e) - to discuss the purchase, acquisition, lease, transfer or sale of real, personal or other property interests and to determine positions relative to matters that may be subject to negotiations regarding: Vail InDEED applications and deed restrictions. Presenter: Lynne Campbell, Housing Coordinator Moffet motioned to exit executive session and rejoin the regular meeting. MOTION: MOFFET SECOND: MC DOUGALL VOTE: 3-0 APPROVED Lindstrom, McDougall, Moffet, Morales, Ruther and Campbell rejoined the regular meeting at 3:55PM. 7. Any Action as a Result of Executive Session 7.1 Any Action as a Result of Executive Session MOTION: MOFFET SECOND: MORALES VOTE: 4-0 APPROVED 8. Adjournment 8.1 Adjournment 4:08PM MOTION: MOFFET SECOND: MORALES VOTE: 4-0 APPROVED 9. Future Agenda Items 9.1 • Deed Restriction Compliance and Enforcement Policies Recommendation • Public Health Housing Incentive, Eagle County Health • Land Banking (sale of GRFA) • Joint VLHA, Town Council, Planning & Environmental Commission Meeting Regarding Commercial Linkage/Inclusionary Zoning and Adopted Housing Policy Review • Investment Banker Discussion - Long Term Housing Funding 10. Next Meeting Date 10.1 Next Meeting Date September 14, 2021 ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- Meeting agendas and materials can be accessed prior to meeting day on the Town of Vail website www.vailgov.com. All housing authority meetings are open to the public. Times and order of agenda are approximate, subject to change, and cannot be relied upon to determine at what time the Vail Local Housing Authority will discuss an item. Please call (970) 479-2150 for additional information. Please call 711 for sign language interpretation 48 hours prior to meeting time. Housing Department TOWN OF ' VAI L LOCAL HOUSING AUTHORITYAGENDA MEMO ITEM/TOPIC: Short Term Rental Study ATTACHMENTS: Description EPS Scope - Draft September 2, 2021 Scott Robson, Town Manager Kathleen Halloran, Finance Director Town of Vail 75 South Frontage Road West Vail, CO 81657 Subject: Short-Term Rental Program Evaluation and Mitigation Fee Study; The 1,'arra olnicr of Tana, C EPS #213137 Dear Scott and Kathleen: p„w oil Thank you again for reaching out to Economic & Planning Systems (EPS) and RRC Associates (RRC) to assist with this short term rental (STR) licensing fee study. Following is EPS's proposed scope of services and draft budget for your review. Please let us know if you would like to discuss this proposal. As always, we will look forward to working with you. Sincerely, Economic & Planning Systems, Inc. A drew Knudtsen Brian Duffany Principal Executive V.P. Economic&Planning Systems,Inc. 730 17th Street,Suite 630 Denver, CO 802 02-351 1 303 623 3557 let 303 623 9049 fax Denver" Los Angeles Oakland Sacramento www.epsys.com Economic&Planning Systems, Inc. Scope of Services EPS, in conjunction with RRC, has developed the following approach and Scope of Services that addresses three topics and objectives: • Characterize Dispersed Short Term Rentals (STRs) — The Town would like to better understand the nature of dispersed STRs in Vail. This study aims to ground the data analysis provided in later tasks with an overview of the industry and how it performs within Vail. The report will include data on the location of STRs, their use and occupancy characteristics, economic impact, and impact on housing available to the local resident workforce. Regarding DSTR information gathered, we'd request that in addition to location we'd be able to group by neighborhood/area to help Council consider future zoning restrictions; We are also very interested in ownership of our housing stock (which may be included in the above "impact on housing available"); for example identifying housing unit ownership by full time primary resident, second homeowners (not rented) and DSTRs. • If possible being able to distinguish between a DSTR that's rented a majority of the year vs. a second homeowner that rents only a few weeks a year vs. a primary resident that rents a room but otherwise occupies the unit. • Do DSTRs take business away from traditional lodging industry? (you speak to this below) • How to DSTRs impact local businesses hiring of employees? • Housing Impacts — One of the strongest criticisms of STRs is that they may take housing out of the inventory that could be available to the local workforce and/or increase the cost of the remaining housing that is available. This study will evaluate the types of units used as STRs and gauge the degree to which STRs contribute to workforce housing shortages. • Consider Tools to Mitigate Impacts of STRs — Vail and other mountain resort communities in Colorado are evaluating tools to mitigate the impact of STRs on housing availability and affordability. There is interest in considering a fee-based approach that would levy an annual licensing fee. The fee revenue would be dedicated to providing a specific purpose such as housing development or housing programs. The effort will culminate in a study providing the Town with a rational nexus upon which it can base adoption of an DSTR fee schedule. sProject Initiation and DataCollection EPS will host a telephone or video conference meeting to kick off the study, with the following topics to be covered. 2 Short-Term Rental Licensing and Mitigation Fee Study • Data collection and staff contacts • Key questions to be addressed in the study • Any limited or targeted stakeholder outreach (4 to 6 community members engaged on this issue). • Confirmation of acquisition and utilization of data from other providers, such as Destimetrics and AirDNA • Develop a working definition of Dispersed STRs (DSTRs). This study should distinguish between DSTRs and purpose built accommodations, such as hotels. 3 Economic&Planning Systems, Inc. Task Spatial Economic Activity Analysis This task includes an analysis of available data on dispersed STRs and other accommodations in the Town of Vail. The purpose of this task is to identify and analyze citable data on STRs to inform policy decisions. Based on initial conversations with Town staff on available information, we expect to cover the following areas in this task. If data are available for a longer time period than current year or year-to-date, historical data will also be presented. • Baseline trends - Townwide trends in the total accommodations bed base, annual and seasonal occupancy rates, and average daily rates (ADR). • Inventory and location - Total number of DSTRs tabulated and mapped townwide and by area/neighborhood. • DSTR Unit characteristics - Housing unit types and age used as DSTRs • Economic characteristics - Estimated occupancy rates (days or weeks of occupancy), average rental rates, and tax revenue generated from DSTRs. • Guest spending - Spending patterns of guests will be analyzed and compared to traditional lodging types subject to available data. This is an important input to the Task 4 Nexus Study. • Rental income to owner - Estimated rental income to DSTR owners, analyzed by unit characteristics and location. • Management type - Estimate the number of units managed by traditional property management companies (but cross listed on STR sites) and by individuals. • COVID-19 effects - Strive to evaluate how the pandemic affected the lodging market, and if DSTRs increased their market share compared to purpose built accommodations (impact on hotel market). sHousing et Impacts In this task, we will expand on the housing aspects covered in Task 2. EPS will develop an analysis of home values townwide or by neighborhood and compare them to the value of units used as DSTRs. The study addresses both Supply Side factors and Demand Side factors of the economic equation and as part of the Supply Side evaluation, EPS will focus on impacts to the housing inventory in this task by addressing the following questions: • How does DSTR use influence property values? How do values vary by area? • Are DSTRs powerful enough cash flow generators that buyers are purchasing homes on expected cash flow rather than similar market values? 4 Short-Term Rental Licensing and Mitigation Fee Study What is the spectrum of home values used as DSTRs? What portion of this inventory is or was potentially available to local residents as rental or for-sale housing? sExisting Survey Peer i ese c ) RRC has conducted numerous guest surveys in Vail and other mountain resorts in Colorado and the Intermountain West. Their data cover accommodations types, booking method, party characteristics, and spending patterns. RRC will mine its data for relevant information on STR use by guests, along with other relevant data such as Vail sales tax collections and Vail STR inventory and occupancy patterns, in order to estimate aggregate spending in Vail by STR guests. sFee Nexus Study The purpose of this task is to establish a nexus between DSTR use and affordable/ workforce housing demand. The working assumption in this Scope of Work is that fee revenue would be used for housing development or to fund housing programs such as buy downs and the purchase of deed restrictions on current housing stock. EPS will explore two approaches in the nexus study: an economic impact approach, and a unit loss approach. We expect the first approach to be more effective because it builds on an established methodology used in affordable housing linkage fee nexus studies (affordable housing impact fees). The unit loss approach may be limited by the timeliness of available data. Nonetheless, we expect useful trend and condition information to result from the analysis in this Task and Task 2. Economic Impact and Housinga nlyi This analysis will build on work completed by EPS for the Housing Linkage Fee Study underway. An economic impact model (IMPLAN, a widely used input-output model) will be used to estimate the jobs generated by DSTR guest spending. • Estimate workforce housing demand from DSTR visitor spending using the IMPLAN model and EPS'S housing demand model to convert jobs by NAICS category to jobs by occupation and corresponding household income. • Distinguish between the impacts of DSTRs and other lodging types and between local and second homes. • Determine the housing demand by price point and the associated housing gaps. • Determine a method for converting housing gap costs into an annual fee. 5 Economic&Planning Systems, Inc. • Consider other fee uses such as housing programs and adjust the nexus methodology as needed. • Develop a recommended fee for mitigating the impacts of DSTRs. Impact of HousingInventory Loss The analysis in Tasks 2 and 3 may allow us to develop mathematical relationships between DSTR use and year-round housing inventory loss, in other words, the degree to which housing costs increase as the supply for local's housing decreases. There are different approaches to the way these relationships can be quantified in the data. Because price volatility and appreciation rates are subject to many factors (such as out-of-region equity investors), the relationships between supply and demand will need to be tested. We will explore the data to determine if another approach like this can be used to establish a nexus between DSTR use and affordable/workforce housing needs. DraftTask 6: and FinalReports EPS will prepare a draft report to document the information collected, methodology, analysis, and process used to develop the supportable STR fees. Following review and comment from Town staff, EPS will revise the document accordingly and be prepared to present and/or discuss the findings at a scheduled meeting. sProcess and Meetings (Time plus direct cost) EPS can present findings or progress updates to any Town commissions or elected or appointed bodies. No meetings are included in this budget except for progress and project management meetings with Staff. Proposed Budget EPS agrees to complete the above work program on a time and materials basis not to exceed $52,000. The approximate allocation of budget by firm is as follows: Economic & Planning Systems $42,000 RRC Associates $10,000 Total Budget $52,000 (not including meetings described in Task 7 billed on a time plus direct cost basis) 6 TOWN OF ' VAI L LOCAL HOUSING AUTHORITYAGENDA MEMO ITEM/TOPIC: Deed Restriction Compliance and Enforcement Policies Recommendation ATTACHMENTS: Description Deed Restriction Compliance and Enforcement Policies Recommendation 0 TOWN OF VAIL ") Memorandum To: Vail Local Housing Authority Vail Town Council From: George Ruther, Housing Director Date: September 14, 2021 Subject: Draft Deed Restriction Compliance and Enforcement Policies - Recommendation I. Purpose The purpose of this memorandum is to outline draft deed restriction compliance and enforcement policy recommendations for evaluation and consideration by the Vail Local Housing Authority and Vail Town Council. The Vail Town Council has asked that the Authority take this matter under advisement and forward a recommendation of the draft policies on to the Council for review and adoption. For purposes of this review and recommendation, the Authority is serving in an advisory capacity only. The Vail Town Council shall be the final decision-maker on policy adoption. II. Background The Town of Vail relies upon deed-restrictions mutually recorded between private property owners and the Town of Vail as a means of ensuring homes for Vail residents. This approach has proven extremely successful and has been in place for nearly four decades. To date, the Town of Vail has acquired ownership and entitled more than 1,042 deed restrictions for resident housing in Vail and down valley. The language of the deed- restriction contains several important terms, each of which is intended to achieve the Town's adopted housing vision and goal. One of the terms is a requirement that the property owner submits a signed affidavit, along with certain evidentiary material to the Town, on February 1st, annually, verifying and demonstrating that the deed-restricted property was: a. Occupied by a Qualified Household during all of the prior calendar year; and b. If applicable, a copy of the lease form currently used for the Property; and c. If applicable, a list of tenants who occupied the Property in the prior calendar year and the evidence submitted by each tenant to establish that they were a Qualified Resident, as set forth in the Qualification Guidelines. Said affidavit is due by no later than February 1st of each year. Currently, the Housing Department sends out courtesy letters in December/January of each year reminding deed-restricted property owners of the pending February 1st deadline. III. Problem Each year, without exception, far too many deed-restricted property owners fail to comply with the annual verification requirement of the deed restriction by the February 1st deadline. In some years, it has been as high as 40% — 50% of the property owners. As of February 2, 2021, 90 property owners had failed to comply. Disappointingly, 41 of the 90 property owners are repeat offenders from 2020. Now, as a result, a number of problems begin to arise. Those problems include: • Perceptions of inconsistency of enforcement • Loss of credibility in the Town in its deed-restricted housing programs by taxpayers and the general public • Inefficient use of limited staff time (housing dept., police dept., legal, court, etc.) and financial resources • Added expense of compliance and enforcement and use of taxpayer dollars • Prevalence of repeat offenders • Limited internal alignment with the importance of deed restriction compliance • Lack of clarity or consistency of verification information required • Three forms of non-compliance which require enforcement: 1) Failure to comply with the February 1st annual deadline 2) Failure to submit complete information to verify compliance 3) Failure to comply with the terms of the deed restriction IV. Opportunity An opportunity exists for the Town to improve and further enhance the annual verification process for deed-restricted properties in Vail. An improved and enhanced verification process likely yields higher occupancy rates of deed-restricted homes and increases the likelihood that a property owner might deed-restrict their property. Any improvements or enhancements are best achieved through the adoption of deed restriction compliance and enforcement polices by the Vail Town Council. Once adopted, these policies will provide direction and clarify expectations. In fact, as the Town makes progress towards its goal of acquiring 1,000 new deed restrictions by the year 2027, a more efficient and effective annual verification process is needed to simply to keep pace. To that end, and in an effort to solve the problems identified above, the following draft policies for annual verification, compliance and enforcement are proposed for consideration: • Zero Tolerance - 100% of all deed restrictions acquired by the Town of Vail will be verified for compliance annually. Town of Vail Page 2 • Accountability for Non-compliance - An administrative procedure shall be implemented that establishes a $250 verification application fee, which shall be waived when a property owner complies prior to the verification deadline and a $100 mandatory fine/penalty per day for non-compliance if they do not. An escalating scale shall be adopted to address instances involving repeat offenders. The mandatory fine shall appear as a recorded lien against the title to the property. • The current Town code allows for a fine and or incarceration. 1-4-1. GENERAL PENALTY A. Violation And Punishment: 1. It is unlawful for any person to violate any provision or to fail to comply with any of the requirements of this code. Unless otherwise specifically provided, any person eighteen (18) years of age or older violating any section of this code shall be punished by a fine of not more than two thousand six hundred fifty dollars ($2,650.00), or by incarceration not to exceed one hundred eighty(180) days or by both such fine and incarceration. • Clear Expectations for Compliance - Annual compliance requirements and processes for verification shall be clearly articulated to all deed-restricted property owners. • Customer Convenience - The Housing Department created an online sworn compliance statement form in 2020 which resulted in a greater number of deed restriction owners submitting by the February 1 due date. There was positive feedback from the owners of the new process. Minor modifications will be done in 2021.Additionally, the Housing Department will continue to provide a courtesy reminder letter to property owners as a matter of convenience. • Adequacy of Information - Only the minimum amount of information needed to demonstrate compliance shall be required. Recorded deed-restricted homes (EHU) are required to be occupied as the principal place of residence by an employee and works an average of 30 hours or more per week at a business in Eagle County, Colorado that holds a valid and current business license, or pays sales taxes, or is otherwise generally recognized as a legitimate business. Information provided by owner/occupant shall demonstrate compliance with the deed restriction. Online compliance form due on or before February 1 annually providing evidence the EHU has been occupied by a qualified owner/ tenant including rental rate, employer and the occupant has worked 30 hours per week annually. There are 26 restrictions which do not have to submit compliance information. o Employer affidavit verifying place of employment and number of hours worked in previous year o Employer verification authorization (new) — allows Town to contact employer o Pay stubs — last pay stub in prior year (Vail InDEED, Chamonix Vail) Town of Vail Page 3 o Lease — copy of all prior year fully executed leases (Vail InDEED, Chamonix Vail) ■ If leased: ■ provide tenant tax return, ■ employer affidavit ■ employer verification authorization • Organizational Alignment — The Town of Vail shall align itself organizationally to carry out the annual verification process in a timely, responsive, and effective manner, including any enforcement actions which may be necessary. V. Next Steps The review and recommendation of the draft deed restriction compliance and enforcement policies by the Vail Local Housing Authority is the first step in the policy development process. Once policy direction has been determined and adopted by the Vail Town Council, the town staff will work to alter processes or procedures to align with the newly adopted policy direction. It is intended that the majority of the possible improvement and enhancements identified above will be in place for the upcoming 2021 verification process, due on February 1, 2022. Additionally, steps would be taken to ensure any changes in process are communicated to deed-restricted property owners well in advance of the February 1st deadline. Town of Vail Page 4