Published in the August 11, 2016, edition of the Lyons Recorder.
COMMENTARY: What’s the future of affordable housing in Lyons?
Planning and Utilities boards agree on next steps for ADU tap fees
by Amy Reinholds
Accessory dwelling units (ADUs) are defined in a Town of Lyons ADU policy as small apartments that can be permitted on single-family residential lots in town, but no homeowners in town have applied to participate in the program to build ADUs. A barrier often discussed, especially since the flood, is required tap fees.
At an August 8 workshop, members of the Lyons Planning and Community Development Commission (PCDC) and members of the Utilities and Engineering Board (UEB), and town staff agreed on a recommended approach to clarify definitions in Lyons utility code to make it clear that ADUs as defined under the ADU code won’t require separate tap fees.
Both the PCDC and the UEB are appointed advisory boards that make recommendations to the elected Lyons Board of Trustees. Traditionally, the PCDC has stayed away from recommendations about tap fees, which falls under the responsibility of the UEB to advise about. And the UEB is concerned that policies do not result in placing a greater burden on Lyons utilities that the Town must pay for. However, the four PCDC commissioners, two UEB commissioners, two liaisons from the Board of Trustees, and three staff members who met August 8 agreed on a path to pursue.
“We want to do it right, and we want to encourage ADUs,” said PCDC chair Gregg Oetting.
The PCDC recommended to Town of Lyons Consulting Planner Bob Joseph to draft definitions for ADUs that can be added to town utility code, to clear up ambiguity. Commissioners from both boards and Town staff talked about how town code currently mentions an “additional dwelling unit” structure on a property requires a separate water tap, but it does not define an “accessory dwelling unit” or ADU, which has a specific meaning and purpose as a secondary unit that could share a water tap with the primary housing unit. An ADU could be an allowed accessory use under the same utilities as the main house that could be separated out for maybe both the water taps and the electric community investment fee.
UEB chair Aaron Caplan and UEB member Lee Hall talked about past concerns the UEB has had about making sure that Lyons is not close to its threshold of using all the water allotted under the agreement with the City of Longmont (where Lyons gets its water). However, the current ADU policy describes that ADUs are limited to 800 square feet except for in basements, which can be the same size and the main floor. The small size of the home could keep water use down, and commissioners and staff discussed how other measures like tiered rates could address peak demand for water, and how pay for water use. They discussed how if the water use for the entire property stayed under 270,000 gallon per year (for a ¾ tap, the most common size of taps in residential units), there could be no additional cost or another tap required for structures that meet the definition of ADU. Above that 270,000 gallons per year, land owners are charged $2.75 for each extra gallon.
Jacque Watson, the town staff member who supports the PCDC, said that the water agreement with City of Longmont requires that the Town of Lyons identifies its highest one-day maximum use and has to pay a hefty fee to the City of Longmont, if more water is used. She said some years water use goes about that maximum, but it’s usually due to irrigation. Commissioners and staff talked about how adding ADUs to residential lots would reduce the amount of lawn irrigation. Caplan and Watson said they would review the most recent water agreement with the City of Longmont again to make sure there were no issues with ADUs being on the same utilities as the main house.
According to Oetting, most of the other municipalities that he researched don’t require separate tap fees for ADUs added on to single-family home residential lots. Some policies even state that the ADU must connect to the same utilities as the original home and not be on a separate utility billing, which encourages landlords to continue to live in the original home instead of renting out both structures to separate households. Currently the Lyons ADU policy doesn’t have an owner-occupied requirement, but commissioners talked about how such a requirement could be added.
The PCDC is required to hold a public hearing (which means a meeting where members of the public can comment) before voting on recommended ADU definition changes in town code. When recommendations are voted on by both the PCDC and the UEB, those recommendations then go to the Board of Trustees. So there will be at least two opportunities for the public to officially comment at public meetings about proposed changes to town code about ADUs.
Even with proposed definitions in town code that clarify tap fees, the commissioners, trustees, and staff talked about how ADUs probably won’t be added in all parts of town. Some neighborhoods with homeowners associations are likely to prohibit ADUs.
They also talked about how safety issues for emergency responders to know where renters live in town, and reporting ADU rentals to homeowners insurance are policies that remove risk for landlords who build ADUs, as well as make the ADUs safer for renters.
The other priority issue that the Board of Trustees asked the PCDC advise on is a short-term vacation rental policy for Lyons.
Oetting said almost all municipalities he researched regulate short-term vacation rentals. All require the homeowner to have a business license and provide a 24-hour emergency contact number. Several require proof that homeowners insurance companies know homeowners are renting out rooms or apartments as vacation rentals. Most require that the landowners live more than 6 months of the year in either the primary residence or an ADU on the property while renting out the apartments or rooms. A lot of the municipalities taxed the same as the hotel tax.
Currently in Lyons, a bed and breakfast is allowed by conditional use in residential zones, if homeowners apply for the conditional use.
The PCDC talked about a possible policy with limits on how much of the year homeowners can rent out rooms or apartments for short-term vacation rentals, and how much of the home can be rented out. They liked starting with registration for health and safety, and licensing for revenue. They discussed creating incentives with licensing and taxes. Lyons is a Colorado statutory town, which means it cannot have a “pillow tax” as some municipalities do, but it can have sales tax for both hotels and homeowners who rent out rooms or apartments for vacation rentals. The PCDC commissioners, trustee liaisons, and town staff briefly discussed that a tiered sales tax that could incentivize long-term rentals but could allow two or three weeks a year for vacation rentals.
At the next PDCD and UEB meetings, the commissioners will craft their recommendations, and the PCDC will schedule a public hearing about the recommended definitions added to town code. All meetings are open to the public and posted on the town calendar at www.townoflyons.com/calendar.aspx. After the PCDC public hearings and the UEB recommendations, all information will go to the Board of Trustees for a final decision or action.
While more ADUs built in Lyons are only a market-rate solution, with no guarantee to remain affordable in the future, I agree that they would add more rental housing stock in Lyons for people who work in town (if not allowed to be used for short-term vacation rentals year round). But my opinion remains that ADUs are not the sole solution for affordable housing in Lyons. I’m glad a few other options are being pursued in Lyons. Keep following my columns in both Lyons papers for news about accomplishments to increase affordable housing stock in Lyons. I have pledged to continue writing these columns until the first new affordable housing is created in Lyons. But better yet, go to a meeting yourself so you can witness what is happening first hand.
For history of post-flood efforts for affordable housing in Lyons, you can read previous Lyons Recorder columns posted on my blog at lyonscoloradonews.wordpress.com. If you have any questions, comments, or complaints about this column, please contact me directly at areinholds @hotmail.com.
Amy Reinholds served on the Lyons Housing Recovery Task Force from December 2013 through its end in February 2015. She is currently a member of the Lyons Human Services and Aging Commission and served as a liaison to the Special Housing Committee during its existence from April 2014-April 2015. She has lived in Lyons since 2003 and in the surrounding Lyons area since 1995.