Hyde Park planning commission tables proposed rule requiring developers to bring water rights after public outcry over costs

Hyde Park City planning commissioners on Nov. 5 voted to table a proposed amendment to municipal code sections 12.150.010 and .020 that would require developers to bring culinary water rights when pursuing new development, directing staff to return with additional information and a workshop in January.

Mikhail, a planning staffer, told the commission the mayor asked staff to change the city’s practice of “buying in” water rights for developers and instead require developers to hold or acquire rights for the property they wish to develop. Mikhail said the change targets the legal right to use water rather than the physical supply: “Currently, you can come in and buy your way into water for your development,” he said, adding that rights are limited and the city has “banked a few” for particular uses.

The proposal drew sustained criticism from builders and residents at the public hearing. Jake Thurston, a local developer, warned a blanket requirement could “push the price of those up and up and make single-family home ownership just more and more of a joke as far as the price point goes,” and urged the commission to consider a hybrid approach rather than an across-the-board mandate. Tony Hormann told the commission the proposal is “a death sentence for development,” arguing the city’s current internal price for water rights — expressed in public testimony as much higher than market valuations — would make many single-family projects unprofitable.

Alex Berenson of the development firm Nixon and Nixon urged the commission to consult the city’s 2023 water master plan; he read that plan’s finding that “the system sources have capacity to meet the existing need, but will have a deficiency by 2043,” and said that timeline gives the city time to study changes and work with developers.

Commissioners raised technical questions about whether the change would apply to culinary water only (staff repeatedly clarified it does), how the rule would treat secondary/irrigation shares and ERU calculations, and whether fee-in-lieu formulas tied to market prices would mitigate impacts. Staff said engineers calculate required ERUs and that market prices for rights vary widely by seller and location.

After discussion about affordability impacts and market uncertainty, a commissioner moved to table the ordinance and request more analysis and a public workshop; the motion was seconded and the commission approved tabling the item until the beginning of the new year. Staff was asked to return with pricing mechanics, fee-in-lieu calculations, and comparisons to other jurisdictions for commissioners to review.

Next steps: the planning commission asked staff to prepare more information and host a workshop (targeted for January) so commissioners can better understand ERU/share calculations, how secondary water affects culinary requirements, and the ordinance’s likely effect on housing costs and city-held water reserves.