Momentum toward construction of affordable housing in Sun Valley slowed to a crawl last week.
On Tuesday, Oct. 24, the city was hit with a lawsuit challenging the constitutionality of its "linkage" ordinance, which assesses building fees to cover the cost of housing some of the workers that new development generates. Two days later, faced with opposition from the Sun Valley Co. and other local property owners, the City Council rejected a proposed ordinance that would have raised those fees in most cases.
The suit was filed in 5th District Court in Hailey by Phil and Lynn Schaefer, residents of Gig Harbor, Wash., who own a lot in Lane Ranch. The Schaefers state that when they applied to build a house in June, the city charged them a building permit fee of $25,315, which included an "in-lieu" linkage fee of $11,990.
Sun Valley's linkage ordinance requires permit applicants to either provide housing for 10 percent of the estimated number of jobs generated by their development, or pay an "in-lieu" fee for the city to provide the housing. As the Schaefers' suit points out, for builders of residential construction, payment of the fee is the only practical option.
The suit argues that the fee is a tax, and under the Idaho Constitution, municipalities can impose new taxes only when authorized to do so by the Legislature. Since there is no statute authorizing linkage fees, the suit claims, the ordinance is void.
A similar suit was filed in September against the city of McCall by the Mountain Central Board of Realtors. McCall Mayor Bill Robertson declined to comment on the merits of the suit but said linkage fees have been upheld by supreme courts in other states.
The Sun Valley City Council's action on Thursday followed a contentious, daylong public hearing on Wednesday regarding 11 ordinances affecting property owners. Of six ordinances the council considered, all but one were rejected.
The Planning and Zoning Commission had recommended passage of amendments to the linkage ordinance to grant financial relief to those adding only small additions to their houses, under 1,000 square feet, while raising the rates for larger construction.
During Thursday's meeting, homeowner Jean Mabbatt said she and her husband had been told that a building permit for their $20,000 project would cost $3,000.
"Everyone should pay their fair share, not just the poor souls who want a building permit," Mabbatt said.
Council members agreed that existing rates are too onerous on applicants like the Mabbatts, as did Sun Valley Co. General Manager Wally Huffman. However, Huffman argued that the new rate schedule was also unfair to his company and other developers.
Huffman contended Sun Valley Co. should be given credit for the housing it already provides to 480 of its employees in dorm rooms. He said that amounts to 60 percent of the company's summer employees and 40 percent of its winter employees.
"Sun Valley takes care of our own," he said.
Huffman questioned the findings of a countywide housing "needs assessment" completed this summer that found an affordable housing deficit of 532 units in Ketchum and Sun Valley. He also objected to the idea that the city owes housing to its workers.
"Guys from our generation, generally, I think, are offended by what's going on," he said. "What I think you have to be careful of is creating an entitlement. You need to be careful when you listen to these needs assessments from bleeding-heart liberals who tell us we owe our children a nice life."
Mayor Jon Thorson responded that the city is in danger of losing its own workforce and other young and middle-aged people who keep it vital.
"When private enterprise and private individuals won't step in and do something when the community's at risk, then it's up to government to so something," he said.
However, council members objected to the sharp jumps in fees assessed to builders of progressively larger projects. Though it rejected the proposed ordinance, the council directed city staff to draw up another version that would specifically address the problem of fees assessed on small projects.
