Economy manages residential growth
October 13, 2011
With residential construction a mere trickle in Carson Valley, Douglas County planning staff and planning commissioners concluded that the Growth Management Ordinance should be left alone for the foreseeable future.
“At this point, we’re not recommending any changes to any numbers in the Growth Management Ordinance,” Community Development Director Mimi Moss said Tuesday.
Planning commissioners agreed, voting unanimously to recommend no changes to the Building Permit Allocation and Growth Management Ordinance.
First implemented in July 2007, and later approved by voters in the form of an advisory question in the November 2008 general election, the ordinance includes a provision for periodic review in light of population and housing trends. Any modifications, however, must be placed on the ballot for an advisory vote prior to implementation.
The ordinance was a compromise stemming from the Sustainable Growth Initiative, which was approved by voters in 2002 but tied up in litigation until 2008. SGI capped growth in the Valley at 280 units per year.
In comparison, the Growth Management Ordinance set a 50-year schedule of residential building permit allocations using a 2 percent growth rate, compounded annually, totaling 26,812 allocations.
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Moss compared 2010 Census data with the 2000 Census. The latter was used to develop the allocation schedule, although the numbers aren’t far apart.
The county’s 2010 population outside of Lake Tahoe originally was projected at 42,080 using the 2 percent growth model, versus 41,762 reported in the latest Census.
Moss said the population actually increased over the last decade by an average annual rate of 1.92 percent, just under the 2 percent maximum.
“We believe the growth rate should stand as is,” she said.
Moss recommended keeping the existing schedule in place because there is no demand to do otherwise.
As of July 1, the county had 560 excess allocations available – the result of little, if any, residential construction in the Valley.
In the 2007-08 fiscal year, there were 317 permit allocations scheduled. Approximately 149 of those already were vested in projects grandfathered into the code. Only 77 available allocations were issued that year.
In the 2008-09 fiscal year, there were 323 total allocations, 151 vested, and 28 available allocations issued.
In the 2009-10 fiscal year, out of 330 total allocations, minus 155 already vested, 16 were issued.
Last year was even slower. Out of 336 total allocations, with 158 of those vested, 12 available allocations were issued.
“The numbers are very low,” Moss said.
Senior Planner Brandy McMahon explained that the number of allocations issued in a year does not match the number of residential building permits, as actual permits can be issued in a different fiscal year than when the allocations were secured.
The growth ordinance has already been amended twice since its inception.
A 2008 amendment allowed vested allocations tied to development agreements to remain exempt from the normal schedule in the event of an extension of the agreement.
But as of Sept. 29, the county had issued only 91 of 4,773 vested permit allocations, including projects both in and out of development agreements with the county.
Moss said that nearly 700 vested allocations have fallen to the wayside due to the projects themselves expiring. In other words, there are still 4,079 vested permit allocations for housing developments in Carson Valley and surrounding areas.
What to do with vested allocations tied to expired projects is still up for debate.
“They could be added to the bottom allocation totals and spread out,” Moss said.
But just because permit allocations are vested or otherwise available does not mean they’ll be used.
In March 2009, in response to falling demand, county commissioners approved a second amendment that allows excess permit allocations to be issued on a first-come, first-served basis outside of the quarterly distribution process.
Since then, excess allocations have been stacking up, while residential construction has been scaling down. Whether or not the full number of allocations will ever be used is perhaps a better question for an economist.
“Those allocations keep rolling over,” Moss said.