It was probably inevitable: A challenge has been brought to a Ketchum ordinance that awards development density to new buildings if the owners agree to include affordable workforce housing on site or pay a fee in lieu of housing.
Encouraged by two separate district court decisions involving McCall and Sun Valley, the developer of a high-end residential complex in Ketchum wants the city to give back more than $1 million it paid as fees in lieu of housing.
The developer is also threatening to rescind the sale of one of two affordable workforce units built within the complex.
The developer claims that because two Idaho district courts had ruled that such fees are illegal taxes, the city can't impose them—even if the city has awarded the developer something of value in exchange.
There's the rub, and perhaps the question: If a developer receives something of value--a bigger building, for example--in exchange for something of value--money or affordable housing units--is what the developer pays really a tax?
The developer says it's a distinction without a difference.
Hogwash.
Ketchum's zoning ordinance is different than Sun Valley's or McCall's.
The latter cities simply demanded that developers contribute affordable housing units or money as a condition of getting a building permit or subdivision approval. Developers received nothing in exchange.
Unlike those cities, Ketchum didn't demand that developers provide affordable housing units for nothing. Instead, it offered an incentive in the form of additional developable density in exchange for money and/or housing units. It's a business-like, win-win exchange.
The development in Ketchum got 6,930 square feet of additional space to develop and sell. The city estimates the space to be worth a minimum of $3.5 million.
Also, Ketchum did not force the developers to take advantage of the incentive plan. It was voluntary and based on the developer's assessment of the potential benefit.
The city should mount a vigorous legal defense of its ability to address the unique financial pressures that have driven out firefighters, police officers, teachers and others while leaving the city with largely empty vacation homes and condominiums.
Ketchum's ordinance may be the last, best hope for Idaho's resort cities to find a real solution to the disappearance of affordable workforce housing—and the souls of these communities along with it.
