Mammoth Real Estate Q&A — Mammoth Affordable Housing; the Part and Parcel

This Mammoth Real Estate Q&A appears in the Thanksgiving 2018 issue of The Sheet

Q: We’re second homeowners and we know affordable housing is an important ongoing concern in Mammoth. But we can’t keep track of all the latest movements, so what can you tell us is happening? 

A: The whole affordable/workforce housing topic has been studied and discussed rather extensively in the past 18 months here in Mammoth Lakes. And my guess is the discourse will become increasingly passionate and heated in the coming months and years. Mix the ongoing housing and labor shortage with the Town’s $6 million land acquisition of The Parcel, and the public is going to be looking for answers, and action. 

The discussion is primarily about what should be done with the newly acquired 25 acres. This  land is zoned for affordable housing and it sits right in the middle of town. So what should be done? How should it be done? Who will do it? Who will profit? How is it all going to be paid for? and more. The continuing education and dialogue is valuable. But any perception of the Town Council’s hesitation and indecision may itself become contentious. The local demand for workforce housing needs some real resolution. And it isn’t going to happen quickly. 

And just the fact that some are now blaming the second homeowners for the housing shortage is the beginning of absurdity.

For some important background, let’s recap. In 2017 a wide variety of community members (the Working Group) met for months to review and update previous housing related documents, studies and concepts. The end result was the Housing Action Plan. Distilling out the highlights, Mammoth is estimated to be about 600 workforce housing units short with more than half of them needing to be “below market” or for lower income residents. The Action Plan’s two top and most immediate priorities are the acquisition of the Shady Rest property (now referred to as The Parcel) and the creation of a dedicated tax revenue source specifically for the local housing efforts.

Negotiations for acquiring The Parcel occurred almost simultaneously to the completion of the Action Plan. The dedicated tax was suggested (hoped for) to appear as a ballot initiative in 2018. But that didn’t formalize. The very recent Housing Summit in Mammoth echoed how critical a dedicated tax and revenue source will be to moving The Parcel development forward. There is expensive planning, EIRs, architecture, engineering and other soft costs. And then roads and utilities that need to be completed before any real structures can be built. The Working Group envisioned (again hoped for) construction of ~300 affordable housing units on The Parcel within the next five years. That is looking unrealistic.

In the meantime there are side efforts to shake loose some new affordable housing opportunities by working with second homeowners who might want to become long term landlords (anybody?). And promoting ADUs (accessory dwelling units) in the single family neighborhoods and trying to conceive some “tiny home” concepts and opportunities. The short term goal is to try to find 50 new housing opportunities from our existing properties. But so far everybody appears to be pointing to the other guy to make it happen. Nobody seems to have adequate resources or the time. That’s typical in Mammoth.

The new federal tax law changes may in fact motivate some second homeowners to convert their properties to rentals. But if they do, it is likely they will convert to a nightly rental scenario rather than long term rentals. Short term rentals allows for income and owner usage. That is the nature of this market. There is a reason they purchased a second home here — they want to come.

Ultimately the real solution is to fully develop The Parcel and some other available parcels in town with a variety of affordable/workforce housing. To accomplish this the Town needs a consistent and substantial flow of tax dollars to “seed” and sustain the whole enterprise. Beyond the locally generated tax revenues there is a variety of funding and financing mechanisms available for development, but a dependable and consistent flow of revenue is necessary to underwrite the entire program.

Discussions about how to fund this flow of dollars need to come front and center. Surely someone will suggest we need to be “creative.” And part of the discussions will be the inevitable trade-offs for the community (regardless of what some think, the Town doesn’t have an endless source of dollars). 

This new revenue source will assuredly be another reach into the visitor’s wallet in the form of increased bed tax or sales tax. But what if the Council feels compelled to begin the serious planning (spending money) of The Parcel before a consistent source of funding is established (and they probably need to)? Where will these dollars come from? What will be displaced? Even though the community members all recognize the importance of developing workforce housing, each affected special interest group will certainly squeal. And the Town has been riding high on excessive TOT (bed tax) receipts the past couple of years. That could revert to the mean.

The Town Council bought the land. Will they now find the political will to get it developed? Additionally, the Ski Resort has been emphatic that it cannot expand without more workforce housing base. And any new condo hotel facility will require approximately 100 new employees. The people who think Mammoth is poised for a development and growth phase need to grasp that hundreds of workforce housing units are going to be a prerequisite.  

The Parcel itself is a development puzzle too. The planning is bound to be controversial although the NIMBYs may be minimal. There have been planning concepts put on paper in the past. But the Town is taking the attitude that it is “an empty canvas” at this point, that everything is up for discussion. One of the really serious housing needs in the community is for middle income housing. With entry level (and barely livable) homes starting at a half million dollars and reasonably spacious and utilitarian condos not far behind, local residents without trust funds or stellar wages have a nearly impossible time finding a place to own, or rent. It is one of the serious dysfunctions of Mammoth, but not unlike most mountain resort communities. 

Middle income housing is critical. Mammoth is desperate for housing for teachers, nurses, middle managers, tradesman, would-be volunteer firemen, etc., etc.. Many good people have simply moved-on because the economics of living in Mammoth can be insane. With young children, I have no idea how they do it. 

One of the plans from the early 1990’s has 52 zero lot-line (duplex) homes as part of the plan. These are conceived as 3 bedroom / 2 bath, 2-car garage homes. Hypothetically, some of these would be rentals, but most should be deed restricted units available for ownership (“home ownership makes mayors of your citizens”). The Parcel even has an ideal location for a small park or even a building that could house day care. And it is within reasonable proximity to the schools.

The other need that I see is for smaller apartments, even SROs (single room occupancy) that could be utilized by people transitioning into the community and workforce. Many employers are ready to hire but have to ask the critical question; Do you have a place to live (besides your car or the forest)? These apartments could serve to house newcomers who desire to try the Mammoth lifestyle and have some valuable work skills. After a year or two, if they decide to stay in town, they would know the “lay of the land” and would likely find other housing. Over the years I have spoken with hundreds of these types who have desperately walked into my real estate office looking for a rental.

These are the biggest needs I see. But everything is up for discussion. And the opinions will fly. At least the interested parties are becoming educated on the subject. What my planning brain sees are two distinct neighborhoods with some natural separation. But we’ll see what the community comes up with.

Beyond what to build is how to develop it. The great unknown is will the Town actually become the developer? It may have to. That comes with some risk. And the Town will need some strong personnel to execute the plans. We recently saw how the town of Breckenridge has successfully built numerous workforce housing projects. They also have a steady revenue source to fund projects. And they are very proactive at getting these projects built. So can that work here? Our town may be forced to try. Developing or redeveloping affordable/workforce housing will always be a need in this community. It really needs to be an endless project.

Meanwhile the Mammoth community has lots of other ambitious development goals. An ice rink and airport are still on the table, the new Cultural Center wants to break ground next year, and the Wounded Warrior Center is still raising funds. It all costs money. Lots of money. But the time has come to see how strong Mammoth’s commitment to workforce housing really is. 

Happy Thanksgiving!

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