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Board upholds $278,009 employee-housing mitigation fee for new Telluride-area house
Summary
The San Miguel County Board of Commissioners unanimously upheld the planning director's decision to assess a $278,009 employee-housing mitigation fee for a 7,082-square-foot residence, rejecting the appellant’s request to revert to the prior (much lower) fee schedule.
The San Miguel County Board of Commissioners on Jan. 21 voted to uphold the planning director’s assessment of an employee-housing mitigation fee of $278,009 for a proposed 7,082-square-foot single-family home.
Planning staff explained the fee calculation in the hearing: the county multiplies the number of employees generated by the project by 400 square feet per employee, applies the mitigation percentage, and then multiplies by the market affordability gap. "The fee is calculated by the employees generated times 400 square feet per employee, times the mitigation rate percentage, times the market affordability gap," the planning presentation stated. For this project staff calculated 1.465 employees generated, which converts to 586 square feet of housing and produced the $278,009 figure at the applicable mitigation rate and square-foot price in effect for the application date.
Appellant counsel argued the assessment was disproportionate, that the methodology relied on outdated data, and noted related litigation challenging the county’s 2022/2023 fee updates. Appellant counsel said the earlier 2007 fee would have amounted to about $13,951 for this permit and described the current fee as a roughly 2,100% increase. Counsel also raised issues about whether the county’s fee schedule properly quantifies reasonable impacts and whether fees are being used to remedy existing deficiencies in the county’s affordable-housing stock, which state law generally forbids.
County staff responded that the county’s methodology had been examined in parallel litigation (the 3 K 9 case), that a district court previously found the 2022/2023 resolutions comply with CRS requirements, and that the board retains discretion to grant waivers or accept alternative employee-generation calculations presented by developers. The staff report also noted the county maintains a distinct housing fund for mitigation proceeds and detailed how those funds are used for land acquisition, infrastructure, and deed-restricted housing projects.
After hearing arguments, the board voted to uphold the planning director’s decision and directed staff to prepare a resolution to that effect. Commissioners said they are seeking to address projected housing demand created by new development while recognizing legal constraints and pending appellate review in related litigation.
The appellant has a pending appellate matter tied to similar fee disputes; oral arguments in a related case were scheduled before the Colorado Court of Appeals in February.
