Affordable housing is a critical issue for Park City, Summit County, and the entire Wasatch Back. The development plan for the Bonanza 5-acre site owned by the city is not a solution. In fact, it risks significantly setting back our housing goals. It is necessary to step back and see the larger picture as well as the particular shortcomings of this project. Park City imports almost 11,000 full-time workers every day. Of these, over 2,500 commute from the Snyderville Basin and almost 3,000 come from other parts of Summit and Wasatch counties. The entire Salt Lake Valley, from Spanish Fork to Bountiful, contributes thousands more. Workers living within Park City boundaries total about 2,000. These are rounded numbers that change depending on how full-time jobs are defined and the data set you use. The labor force we require is largely imported both from close by, 10 miles or less, and from much further distances.  We cannot house all of these workers within Park City so we must identify our priorities and create strategies to maintain our labor force and maximize the amount of housing we can get per dollar.  Park City has a stated goal of housing 15% of our workers within our boundaries requiring about 860 more deed-restricted units. This does not even begin to seriously address a coming massive shift in labor supply. It is no longer about housing a few hundred more people in Park City and creating community.  The Deer Valley East Village development has made public statements indicating 6,000 workers will be required for it to operate. Only 600 affordable housing options appear to be publicly discussed to date. Workers will likely come first from Wasatch County, parts of Summit County, and the entire Salt Lake Valley, putting tremendous stress on our labor force. Competition will be both on wages/benefits and commuting ease. We must think regionally and creatively, but most importantly, we must make rational choices how we spend limited funds given what is happening now in the Wasatch Back.  Unless one has truly unlimited funds, every choice to spend a dollar on a project is a lost opportunity to spend that dollar on something else. It is a dishonest framing to claim that funds raised from tourists do not carry potentially significant opportunity cost to everyone else.  Misallocation of funds, no matter their source, to inferior projects hurts both residents and businesses. Misallocation of funds for affordable housing prevents achieving our housing goals and hurts the pool of workers who could have benefited. Given the labor challenges that are sweeping down upon us, what is the proper framework to make these choices regarding affordable housing? I believe the first is cost per deed-restricted unit. The 5-acre site at present has a sunk cost of at least $19.5 million and a projected additional investment of $40 million. Many have pointed out this number will end up being considerably higher since we are almost surely taking soil remediation risk. For 88 deed-restricted units, that is a per unit cost of $676,000. We do not allocate this investment to any market rate units or commercial development because no subsidy would be needed by any developer to build these. This amount is staggering and bleeds into the absurd.  The Studio Crossing development (albeit an incredibly unattractive project) provides 172 deed-restricted units. The subsidy that was required from Park City: zero dollars. Why this difference? To make a project work with deed-restricted rent or below-market sales prices, a developer needs to have more highly profitable offsets to meet his return requirements. These come in the form of more market-rate units, more commercial development, less expensive land, or a greater per-unit subsidy. To limit the subsidy, the developer needs more acreage and/or more height and density to fit in more market-rate housing and commercial space. This is why affordable development in Park City is so difficult.  But even so, this project doesn’t seem right. Something is very wrong. Let’s look at what could be done with this amount of money. We could buy 88 three-bedroom homes with a yard and put a new self-driving Tesla in the garage within a 45 minute commute.  Even if we take out the sunk cost for the land, the subsidy per unit is $455,000. More practically, with the additional subsidy of $455,000, we could build 100 townhouses with garages and 1,500 square feet of living space at cost of $300 per square foot.  If we need so much housing, why are settling for 88 small apartments? Alternatively, we could allocate dollars to subsidize the Holiday Village redevelopment across the street at a lower per-unit cost and still build some housing, artistic facilities and public space at the site and come out far ahead.  The question to the council is why are you sacrificing critical affordable housing to commercial development?  Looking forward, what are our housing needs and how much will these cost? The official goal set by our council is 860 affordable housing units. Given what is happening at Deer Valley East Village, this number may be quite low.  We need to strategize how we can maximize our affordable-housing dollars and think of additional creative strategies to hold onto our labor supply. We need to forecast the average per-unit subsidy we are willing to spend and project that forward to understand the total fiscal impact that creates for any goals we establish. It is basic financial strategic planning. At $500,000 per unit, about the additional per unit investment required by the 5-acre site, the total subsidy bill to meet our current stated housing goals is $430 million. It won’t take much to get to half a billion dollars!  If we can drop our per unit subsidy to $100,000, which is similar to the per-unit cost of the EngineHouse project, the total funding required is $86 million. which means this $40 million could lead to 400 deed -estricted units, not 88.  If we dedicate $40 million to this one project. we have limited our ability to meet future housing needs.  This project contributes only about 10% to our housing goals but greatly curtails our ability of realistically meeting the remaining 90%. The tourists, the businesses and the residents of this town are not a bottomless checkbook for inefficient, misguided housing projects that work against the very goals many of us otherwise support.  Peter Yogman Park City The post Bigger picture appeared first on Park Record. ...read more read less