County to raise employee-housing mitigation fee to $928 per square foot, phased increase, annual review set

San Miguel County commissioners voted June 11 to raise the county’s employee-housing mitigation “gap” fee from $527 per square foot to $928 per square foot to reflect updated market sales, and to phase the increase between Aug. 1 and Dec. 31, 2025 before the full new rate takes effect Jan. 1, 2026.

Senior planner John Huebner presented staff’s recommendation, telling the board the existing fee is based on condo/duplex sales data from 2018–2020; staff recommended updating the fee using sales from 2021–2023. The board approved a phasing plan the county will apply to development applications: applications filed and complete before July 1, 2025 will be assessed the current $527 rate; applications submitted after the adoption date will pay a phased rate of $727.50 between Aug. 1 and Dec. 31, 2025 (the average of $527 and $928) and the full $928 beginning Jan. 1, 2026. Planning staff will perform annual updates thereafter.

Huebner reviewed the mitigation calculation method: the county estimates employees generated by new residential square footage, then converts that to a required housing supply using a minimum unit size assumption of 400 square feet per employee. Under the example used in the presentation, a 2,001-square-foot unit yields a mitigation requirement translated into a fee of $13,441 at the current $527 rate, $18,555 during the phased period, and $23,669 at the $928 rate.

Public commenters discussed the policy’s effects. Resident Shelley Duplant asked about geotechnical and slope concerns in other agenda items; realtor Tobin Brown urged clear public-facing explanations of how the fee is calculated. Community member Morgan Smith urged the board to consider incentives to encourage accessory dwelling units and smaller housing that could serve local workers; commissioners and staff noted the county is undertaking a broader housing-policy review and has budgeted an update to its employee-generation study.

The board adopted a motion instructing staff to implement the fee change with a public outreach plan: display ads, a press and social-media release, notice on the county website, and emails to HOA lists and the Telluride Association of Realtors. The motion also directs planning staff to annually update the market-gap fee using the most recent available sales data for the previous three full years, as permitted under the land-use code.

The motion carried unanimously.