An effort to allow rented "granny suites" in existing homes to cushion Payson's affordable housing crunch has proven unexpectedly complicated.
Meetings with homeowners' associations and others have added several layers of questions to a proposal to let people rent out rooms or outbuildings in residential neighborhoods, Zoning Administrator Ray Erlandsen this week told the Payson Planning Commission.
"During the discussion, it became clear that this topic was much more involved than first thought," Erlandsen reported of the staff research into rewriting the town ordinance on "guest quarters."
The planning commission had asked town staff to look into revamping the existing law on guest quarters, to see whether the interior or detached units might help ease the town's chronic shortage of affordable housing.
Commissioner James Scheidt said the town needs to clean up its ordinance quickly, since the soaring cost of housing and the shortage of workforce housing has already overtaken residents.
"The more we grow, it's going to become a reality that we're not ready" to regulate such alternative forms of housing. "Right now, we have nothing. We need to get our act together," he said.
Payson recently commissioned a $50,000 study of the shortage of housing for middle class workers in the community. Currently, Payson's median income is about $34,000, which is enough income to qualify for a $111,000 mortgage. However, the average home in Payson costs $220,000 to $232,000.
The planning commission had asked for a study of the town's restrictions on guest quarters in hopes that renting out upstairs rooms or small, detached buildings known as "granny flats" might provide a low-cost option for some renters now priced out of the apartment market or stuck on the waiting list for most apartment buildings in town.
The current law forbids renting of such guest quarters and bars the construction of interior suites or detached buildings with kitchens.
The proposed revision of the ordinance would lift many of those restrictions. But after a discussion with representatives of homeowners' associations and others, the planning staff proposed several restrictions on such units. Those restrictions include:
- Minimum 6,000 square-foot lot for guest quarters inside the main house.
- A somewhat larger minimum lot size for detached guest quarters.
- The owner must live in the main residence.
- The rented out guest quarters must use the same water and power meter as the main house.
The commissioners strongly supported the proposed changes, but raised questions about how to make sure that the new category of rental units didn't create higher-density rental units in the midst of a single-family residential neighborhood. They also grappled with whether the town had any obligation help enforce restrictions of such uses by homeowners' associations.
But generally, the commissioners said they hoped the shift will provide at least a handful of affordable homes for working class residents. Moreover, the commissioners noted that many residents already rent out guest quarters and detached granny flats in violation of the town's ordinance, so it would make sense to give them some legal option to do what they're already doing.
"We're just trying to open up some possibilities to a different type of affordable housing," said Commissioner Russell Goddard.
But Erlandsen wanted to be sure that the idea had enough support from the commission to proceed.
"Is it necessary?" he said. "Do we want to go to all this trouble? It's going to take a lot of work to get something in place that won't create any enforcement problems."
Commissioner Joel Mona suggested that perhaps anyone building a detached unit in the back yard they might want to rent out should pay the town's impact fees. Currently, the town and the sewage treatment district impose nearly $15,000 in impact fees on each new house built -- half of which goes into a fund to pay for water projects like the propose Blue Ridge Reservoir pipeline.
"Two people in an accessory dwelling unit have as much impact on the town as people living in two houses," he said.
"I think it's very necessary as we move forward," said Commissioner Gary Bedsworth, who said he recalled several times in his 20's when the most he could afford was a rented room.
Commissioner Lori Meyers stressed the importance of such units for families facing the challenge of boomerang kids needing a place to live and ailing parents needing care to survive.
"As your parents age and you don't want to put them in a home, this can be an important option." For that reason, she didn't like the idea of imposing costly impact fees. "I wouldn't want to make it too burdensome."
"We need to avoid being overly sentimental," observed Mona, in response to the idea that rules and costs should be minimal because the units might be used to house ailing parents and family members. He said the town would have no way to police whether the units were used for a family member or a mere renter. "These could end up being investment properties, with nothing to do with sick parents."
Commissioner Scheidt agreed the rules would have to prevent the creation of higher density rental units in the midst of a residential neighborhood. "We're not building rentals here. We have to start with a lot" that's big enough to accommodate the rental unit without affecting the neighborhood.
Commission Chairman Hal Baas agreed. "We're talking about accessory dwelling units -- and we need to focus on ‘accessory.' We're not talking about multiple dwelling units."
Scheidt also wondered whether the town would find itself in legal hot water if it issued a permit to someone to add a granny flat unit when the homeowners' association wouldn't allow it.
"The town fosters that legal conflict by willy nilly issuing a permit" since homeowners might think that the permit gives them the right to build, even if the contract with the homeowners' association bars such rental units.
The town currently requires evidence that the homeowners' association has been consulted, but has no obligation to enforce the provisions of the contract between the homeowner and the association.
Town Attorney Tim Wright said the town can require the homeowner to consult with the association, but can't do anything that would have the effect of enforcing the restrictions of that contract. The town cannot be in the position of "leaning on them to enforce the HOA provisions," he said.
In the end, the commissioner's professed themselves satisfied by the progress report and directed Erlandsen to finish working out the details and return at a future meeting with a new proposed ordinance.