Section 3-740 Standards Applicable to All Affordable Housing
3-740.A. Provision of Affordable Housing. When proposed either to satisfy the housing requirements established in Section 3-720.C, “Calculation of Minimum Affordable Housing Requirements”, or to provide affordable housing pursuant to section 3-730, affordable housing must meet the following requirements.
3-740.A.1. Minimum Requirements.
a. Deed restriction Affordable Housing Unit. Any Affordable Housing unit shall be deed restricted to rental or sales terms and occupancy limitations which comply with the Guidelines unless an exception is granted by the THA.
b. Telluride Affordable Housing Guidelines. The units shall be developed in accordance with the Guidelines.
c. Timing of Occupancy. The units shall be ready for occupancy no later than the date of the initial or temporary certificate occupancy or certificate of completion of the free market portion of the project. If the free market units are to be developed in phases, then the affordable housing units can be developed in proportion to the phasing of the free market units.
3-740.A.2. Allowed Methods of Providing Affordable Housing.
a. For all new development or redevelopment within all zone districts, the following methods may be used to provide affordable housing:
(1) Construction of unit(s) on the site on which the development is proposed.
(2) Construction of unit(s) within the Town of Telluride, provided such land, site or structure has not been previously deed-restricted to employee or affordable housing by any party, public or private, including the Town, the Town of Mountain Village or San Miguel County.
(3) Construction of unit(s) outside the Town of Telluride but within the Telluride Region (as defined by the Telluride Master Plan), provided such land, site or structure has not been previously deed-restricted to employee or affordable housing by any party, public or private, including the Town, the Town of Mountain Village or San Miguel County. Prior to construction of such unit(s), consent of the relevant jurisdiction or homeowner’s association (if required) to placement of a Town of Telluride deed restriction on the unit(s) must be obtained, in addition to any required land use approvals.
(4) Deed restricting existing free market unit(s) within the Town or the Telluride Region.
(i) As a condition of approval when the deed restriction of existing free market unit(s) is proposed, Applicants must obtain the approval of THA for the specific unit(s) to be deed restricted. Applicants must demonstrate to the satisfaction of THA that (a) the long term affordability of the proposed unit(s) is adequately protected, considering issues including but not limited to long term maintenance and homeowner’s assessments; and (b) the affected projects government documents, if any, do not prohibit the type of housing proposed. THA may request additional information about the proposed unit(s) as reasonable to make such a determination. Such approval may contain provisions to insure that any unit(s) so restricted meets long term standards for maintenance and affordability.
(ii) Prior to deed restriction of such unit(s) when located outside the Town of Telluride, consent of the relevant jurisdiction or homeowner’s association (if required) to placement of a Town of Telluride deed restriction on the unit(s) must be obtained, in addition to any required land use approvals.
(5) Fees in lieu pursuant to Section 3-740.A.3. not to exceed ten percent (10%) of the total affordable housing requirement.
(6) Conveyance of land pursuant to Section 3-740.A.4.
(i) Land may be within Telluride or the Telluride Region provided such land has not been previously restricted to employee or affordable housing by any party, including the Town, the Town of Mountain Village or San Miguel County.
(ii) Land located outside of Telluride must have approvals by the relevant jurisdiction or homeowner’s association (if required) for use as affordable housing and approval for placement of a Town of Telluride affordable housing deed restriction on the land and/or the resulting constructed housing.
(7) Any minimum affordable housing requirement required pursuant to Section 3-720.C., either fractional or whole, may be combined with other developments’ housing mitigation plans.
b. The ten percent (10%) limit regarding payment of fees in lieu described in Section 3-740.A.2.a(5) shall not apply when:
(1) The required affordable housing mitigation is equal to or less than four hundred (400) square feet; or
(2) The minimum affordable housing requirement per Section 3-720.C. is greater than fifteen percent (15%) of the gross floor area of the development, excepting gross floor area allocated to affordable housing. In this situation, only that portion of the affordable housing requirement above fifteen percent (15%) of the gross floor area of the development shall be eligible to be mitigated by payment of fees in lieu.
3-740.A.3. Payment of In Lieu Fee.
a. A payment in-lieu fee has been developed by the Town and adopted by the Town Council. Any payment of the in-lieu fee shall be made in amounts for each housing category, as these categories have been defined in the Guidelines. The fees shall be reviewed and updated within two (2) years of their original adoption, and at least every two (2) years thereafter. The adoption of a new fee can be included on the overall Planning and Building Department Fee Schedule as adopted by the Town Council.
b. Time of Payment and Use of Funds. Payment of the in lieu fee shall be made to the Town prior to the issuance of any building permits for the free market portion of the development.
(1) Interest Bearing Account. The Town shall transfer the funds to an interest bearing account.
(2) Authorized Uses of Fees. The funds, and any interest accrued, shall be used only for the purpose of planning for, subsidizing or developing affordable and employee housing.
c. Refund of Fees.
(1) Seven Year Limit. Fees collected pursuant to this section may be returned to the then present owner or property for which a fee was paid, including any interest earned, if the fees have not been spent within seven (7) years from the date fees were paid, unless the Town Council shall have earmarked the funds for expenditure on a specific project, in which case the Town Council may extend the time period by up to three (3) more years.
(2) Written Request. To obtain the refund, the present owner must submit a written request to the Planning Director within one (1) year following the end of the seventh (7th) year from the date payment was received.
(3) Payments Determined. For the purpose of this section, payments collected shall be deemed spent on the basis that the first payment shall be the first payment out.
d. Deferral of Payment-In-Lieu Fee.
(1) The Town Council has approved and implemented a deferral of the required payment-in-lieu fee program for owners of property within the Town of Telluride that are subject to an affordable housing payment-in-lieu fee under the following conditions:
(A) Pursuant to a review of the factors and eligibility criteria establishing qualifications for Town electors and residency for the same under Telluride Home Rule Charter Section 2.4, the individual property owner can demonstrate by the filing of an affidavit available from the Town, along with all necessary and supporting documentation, to establish that the structure that is the subject of the payment-in-lieu fee is currently the primary residence of the individual applying for the deferral of the required payment-in-lieu fee.
(B) An individual can also apply for a deferral of a payment-in-lieu fee if he or she is constructing a structure that is the subject of the payment-in-lieu fee that will become his or her primary residence within one (1) year after a certificate of occupancy for the same structure has been obtained from the Town of Telluride. The individual shall also file an affidavit with the Town and shall commit to providing all necessary and supporting documentation to demonstrate that the structure has become the primary residence of the individual no later than one (1) year after the certificate of occupancy has been issued as mentioned above.
(C) In addition to the criteria for demonstrating either current or future primary residence, at least one (1) person that is on title to the primary residence must also demonstrate at least one thousand four hundred (1,400) hours per year of employment during the previous twelve (12) calendar months within the boundaries of the Telluride R-1 School District and:
i. Continue to demonstrate, following the approval of the deferral of the required payment in lieu, at least one thousand four hundred (1,400) hours per year of employment within the boundaries of the Telluride R-1 School District for the next four (4) calendar years after the certificate of occupancy for the primary residence has been issued by the Town; or,
ii. After a sale has occurred to a subsequent purchaser, the purchaser must continue to demonstrate at least one thousand four hundred (1,400) hours per year of employment within the boundaries of the Telluride R-1 School District for the next four (4) calendar years who can also meet the standards of subsections A.3.d(1)(A) through C of this Section for a continued deferral of the required payment-in-lieu fee.
(2) Upon satisfaction of the above requirements described in subsections A.3.d(1)(A) through C of this Section, a deferral of the required payment-in-lieu fees shall only entitle the deferral of seventy-five percent (75%) of the amount due and owing the Town pursuant to the applicable payment-in-lieu fee. The Town and the person eligible for the deferral of the payment-in-lieu fee shall enter into a legal agreement that shall be recorded in the real property records of San Miguel County and shall run as a burden on the property until the deferred amount, plus interest calculated and compounded at an annual interest rate of the Wall Street Journal Prime Rate, is paid back to the Town upon one of the following occurrences:
(A) The real property that is the subject of the deferred payment-in-lieu fee has been sold or conveyed to a purchaser who does not meet the qualifications for the deferral of the required payment-in-lieu fee provisions of subsections A.3.d(1)(A) through C of this Section, in which case the obligation to pay the outstanding and deferred payment-in-lieu fee shall be a responsibility for the purchaser and any other person to whom a transfer is made with joint and several liability for the payment of the deferred payment-in-lieu fee at the time of closing;
(B) The real property that is the subject of the deferred payment-in-lieu fee is no longer the primary residence of the individual that received the deferral for the payment-in-lieu fee; or,
(C) There has been a failure to provide convincing proof to demonstrate satisfaction of the required employment hours, including the provisions requiring continued demonstration of at least one thousand four hundred (1,400) hours per year of employment within the boundaries of the Telluride R-1 School District for four (4) calendar years after the certificate of occupancy, under subsection A.3.d(1)(C) of this Section.
As to compliance with the payment-in-lieu fee deferral provisions of subsections A.3.d(1) and 2 of this Section, the Town Manager, following consultation with the Town Planning Director and the Town Attorney, shall be charged with rendering the final decision on behalf of the Town as to whether an individual can demonstrate that they have met the requirements to be eligible for a deferral of the payment-in-lieu fee.
3-740.A.4. Conveyance of Land. The applicant may convey land in fee to the Town, whose fair market value is at least equal to the equivalent in-lieu fee, as calculated pursuant to Section 3-740.A.3, “Payment of In-Lieu Fee”.
a. Establishment of Fair Market Values. Fair market value shall be established by a licensed real estate appraiser.
(1) Preliminary Value. Fair market value shall be established on a preliminary basis at the time the Housing Mitigation Plan is reviewed, pursuant to Section 3-720.D, “Housing Mitigation Plan”.
(2) Final Value. Fair market value shall be confirmed at the time of final development plan approval.
(3) Value Net of Commission. Fair market value shall be net of any customary real estate commission for the sale of the land.
b. Time of Dedication. Land conveyance shall occur prior to the issuance of any building permit for the free market portion of the development.
c. Location and Condition of Land. Approval of the location of land to be conveyed shall be by the Planning Director. The Planning Director may require, as a condition of approval, that the land be fully developed and ready for construction, with roads, water supply, sewage disposal and other basic services in place. A soils report or other necessary environmental report may also be required, stipulating whether the land is suitable for the type of construction contemplated and identifying any special construction techniques which may prove necessary for its development.
d. Subsequent Conveyance Permitted. The Town Council shall be permitted to sell the land without restrictions on its future use.
(1) Interest Bearing Account. All proceeds from the sale of the land shall be placed in an interest bearing account.
(2) Authorized Use of Proceeds. The proceeds from the sale, and any interest accrued, shall be used only for the purposes of planning for, subsidizing or developing affordable and employee housing.
3-740.B. Size and Design Standards for Affordable Housing Units. Affordable housing units shall comply with the size requirements and other design standards established within the Guidelines unless an exception is granted by the THA.
3-740.C. Homeowner’s Association.
3-740.C.1. If an affordable housing unit is developed as part of a mixed free market/affordable housing development project for sales purposes, then any documents creating the condominium association or homeowners association shall state that the affordable housing unit shall only be assessed monthly dues and other shared assessments based on whichever of the following two (2) formulas results in the lower cost for the affordable housing unit:
a. “The size of affordable housing unit in square feet as compared to the total size of the other units in the development”; or
b. “The size of the lot on which the affordable housing unit is located as compared to the total size of the other lots in the development”.
3-740.C.2. The initial general annual assessment for the Affordable Housing Unit shall not exceed one and a quarter percent (1.25%) of the initial allowed sales price of the Affordable Housing Unit.
3-740.C.3. Any general annual assessment, special assessment, or any other assessed charge for such Affordable Housing Unit shall be subject to an initial assessment and/or annual assessment increase limitation equal to 3% of the prior year’s general annual assessment for the Affordable Housing Unit, or the increase applied to the entire homeowners association, whichever is less.
3-740.D. Parking Requirements. Each development with an Affordable Housing unit shall provide a minimum of one parking space for each Affordable Housing Unit.
3-740.E. Provision of Affordable Housing in Advance of a Requirement.
3-740.E.1. Affordable housing may be provided in advance or in excess of a requirement of Section 3-720, or in advance or in excess of other affordable housing (voluntary or PUD), subject to all of the following conditions and provisions:
a. The housing has been constructed and deed restricted in full compliance with the applicable provisions of the Guidelines and this Division.
b. The amount of housing provided must be at least three hundred and fifty (350) square feet or more in excess of any affordable housing that is either required pursuant to Section 3-720 above or provided to ensure compliance with Section 3-720 above or provided to ensure compliance with Section 6-304.C., “Review Standards”. Increments of one hundred (100) square feet shall be permitted after the first increment of three hundred and fifty (350) square feet, but they must be contained within a single housing unit, unless mitigation requirements are combined and approved concurrently pursuant to Section 3-740.A.2.a(7).
3-740.E.2. Provided the above conditions have been met, the Director of Planning shall issue an Affordable Housing Mitigation Certificate which shall be referenced in the deed restriction, numbered, and in recordable form. The Certificate shall be fully assignable and transferable. The Certificate shall be recorded, and upon reliance on the Certificate in satisfaction of required housing, the Town shall file for record a certificate of cancellation.
3-740.E.3. Credit for excess affordable housing shall be granted only for the difference between the housing mitigation required pursuant to this Division or pursuant to a PUD or other Town process, and maximum square footage for the unit type established in the Guidelines.