Planning commission reopens HDHO revisions; tables recommendation after lender, housing-group concerns

Grand County Planning Commission members on Thursday heard several hours of discussion and public comment on proposed revisions to Article 4.7 of the land use code — the High Density Housing Overlay (HDHO) — focusing on who may own and occupy HDHO units, how deed restrictions and liens would operate, and changes aimed at improving the ability of lenders to finance projects.

The hearing drew housing advocates, a lender and government staff who emphasized three recurring issues: (1) whether the code should relax ownership limits so some units in HDHO developments can be purchased by nonlocal buyers while occupancy remains restricted to qualified households, (2) how voluntary deed restrictions and a proposed “consensual lien” would affect mortgage lenders, and (3) precise geographic and residency definitions used to qualify households.

Planning staff presented the draft revisions, noting the packet’s Exhibit A contains the proposed code language and that much of the text is clarifying and intended to reflect prior workshop feedback. The draft would keep an 80% occupancy requirement for qualified households but includes a staff-crafted compromise that, in some HOA-controlled projects, would permit a portion of units to be owned by nonlocal buyers if the HOA covenant required a minimum share of owner-occupied units. "One of the main things we really need the planning commission to think about is opening up ownership to people who aren't necessarily local," the staff presenter said, describing the text labeled in the draft as an alternative compromise.

Lenders and developers urged clearer, lender-friendly language. Ronnie Schultz of Primary Residential told the commission the draft contained provisions that could prevent financing unless edited. "The major issue that we have is you have to keep it very simple," Schultz said. He said a number of paragraphs—particularly those that grant the county broad enforcement remedies, or which assert the county could take legal actions that might conflict with a primary lender’s lien—make lenders reluctant to underwrite loans for HDHO units. "When there is a loan on a property, the lender owns that property," he said. "If the county has the rights over the lender, you're never going to get lending on these properties."

Housing advocates urged compromise but emphasized the program’s original aim of preserving access for local workers. Caitlin Myers, identifying herself as chair of the local housing task force, said she supported changes that expand definitions of qualified households (for example by reducing required local residency periods and acknowledging remote workers who live in the community), but warned against undermining local purchase opportunities: "I think the intent was for locals to be able to purchase the units," she said, while also urging the county to address the lending obstacles developers have reported.

Several commissioners and members of the public pressed staff for technical fixes and clearer drafting. Commissioners asked staff to split enforcement language so deed‑restriction enforcement (the covenant that travels with a parcel) is handled separately from enforcement of development-related obligations, to add explicit protections for a primary lienholder in the deed‑restriction text, and to clarify the proposed geographic definition of "local" (the draft currently references both Grand County and a 75‑mile radius used by another county purchasing policy, and some commissioners suggested instead using Grand County plus the 84532 ZIP code as a narrower local area).

Staff also confirmed specific drafting points that commenters asked about: the HDHO program’s 80/20 structure (80% of units restricted to qualified households; 20% not deed restricted) is tied to final plats and recorded deed restrictions and does not automatically change existing final plats without additional property‑level agreements; condominium financing typically requires a percentage of owner‑occupied units (the draft’s 50% owner‑occupied threshold in certain HOA situations was described as a financing-driven compromise); and deed restrictions recorded on final plats currently remain in place until a formal legal vacation or amendment.

After discussion and additional public testimony, commissioners chose to postpone a formal recommendation. Commissioner Aaron (Planning Commission member) moved to table the planning commission’s recommendation and Commissioner Matt (Planning Commission member) seconded; the motion was carried and the item was tabled to a future meeting so staff can return with clarified language addressing the lien/lendability issues, HOA/ownership wording, and the geographic/residency definitions.

Next steps: staff will revise the draft ordinance language to (a) clarify the ownership vs. occupancy provisions and the 50% owner‑occupancy financing carve‑out for HOA/condo projects, (b) revise enforcement and deed‑restriction language to better describe rights relative to primary mortgage lenders (including suggested protections for the primary lienholder and whether subordination is required), and (c) present alternative geographic definitions for "local." The commission scheduled follow-up consideration at a later meeting; staff also plans additional legal review of deed‑restriction and lien language before the item returns for a new public hearing and vote.

Votes at a glance: The commission did not adopt a final recommendation on the HDHO revisions and instead voted to table the matter pending staff revisions and further legal review.