Jackson Housing Crisis: Developer Battles Local Government For Worker Housing

To help alleviate a housing shortage in Teton County, estimated at 5,300 housing units, a developer is battling local government for permission to repurpose an existing building into housing. Workers say without it, they have to live in their cars.

May 24, 202213 min read

Legacy lodge rafter j scaled
(Cowboy State Daily Staff)

A project aimed at providing housing for Teton County’s workers was given a second shot at life on Monday when county commissioners voted to continue their discussion on the issue until September.

The vote Monday came less than a week after commissioners voted against a conditional use permit needed to turn a former assisted living facility into multi-family housing.

But commissioners voted 3-1 Monday to allow for a reconsideration of the project to provide homes for up to 132 workers on Sept. 20, leaving some to question the delay amid a looming workforce housing crisis.

The housing project proposed by the Darwiche family and Stage Stop, Inc. is to repurpose the 57 existing units at the former Legacy Lodge assisted living facility in the Rafter J development, south of Jackson, into deed-restricted workforce housing.

Commissioners on May 17 rejected, by a 2-2 vote, a conditional use permit (CUP) that would allow the project to move forward.

Commissioners voting against the project said they were concerned with the size and number of units, parking concerns and the lack of a cap on rents. 

When bringing the issue back up for consideration, Commissioner Vice Chair Luther Propst said he hoped the parties involved would use the extra time to draw up conditions for the project’s future that would address all concerns.

“I would love to see a process over the next four months in which as a community we strive to develop a suite of proposed conditions that make an exemplary example of deed-restricted housing for our community,” he said. 

Concerns voiced by commissioners echoed some of those expressed by some residents of Rafter J, who have threatened to take legal action should the housing project win county approval.

The project had support from both the Teton County Planning Commission and Teton County Commissioners, who voted earlier in May to allow a change in the area’s “planned use development” to allow the building’s use for rental apartments.

Plans call for the Legacy Lodge to become a mixture of mostly one-bedroom, two-bedroom and studio apartments which would be upgraded with full kitchens and bike parking.

Deed restrictions would require residents to work full-time for a local business or earn 75% of their income locally. Residents would also be required to sign six-month rental agreements and not own real estate within 150 miles. The rental agreements would also specify that tenants could not leave the units vacant for two months or longer.

As part of the standard deed restriction agreement, there would be no cap on rental rates, which would be listed at market value. Employers could offer rental subsidies to employees.

Rental rates in Jackson can range from more than $2,000 a month for a studio apartment to $3,667 per month for three-bedroom units.

The Darwiche family, which owns Hotel Jackson as well as three other downtown retail businesses, purchased Legacy Lodge last year with the intent of creating workforce housing, noting the difficulties that area businesses have in attracting and retaining employees given the current housing shortage.

When Commissioner Mark Newcomb and Propst voted against the plan initially both said they would like to see a smaller number of larger units rented by year-round by long-term tenants as opposed to seasonal employees. They also said they would like to see a better parking and public transportation plan as well as the possibility that some of the apartments could be set back for county employees.

Propst would also like to see a portion of the apartment restricted based on income, while Newcomb would like to explore options for continuing to use the building as an assisted living facility.

Sadek Darwiche, who is spearheading the project, pointed to a 2022 Teton County housing assessment that estimated a current shortage of about 5,300 housing units in the region, forcing commuters to drive from 10,750 to 17,500 miles a year to get to jobs within the town and county.

The housing scarcity and soaring costs prompted his family to bring the project forward, Darwiche said, based on conversations within his family and other local business owners who are hemorrhaging employees and having a hard time staying afloat.

Some had criticized the proposal, saying Darwiche only proposed it to house his own employees. But Darwiche said his family already provides housing for its employees and his plan was intended to help other local businesses who are struggling to find and retain workers, with several businesses verbally agreeing to leases should the project be successful.

By initially voting against the conditional use permit, commissioners sent the project back to square one and told developers to submit their ideas again in 11 months.

Chris Neubecker, Teton County director of planning and building services, suggested commissioners instead consider a continuation of the issue to pause the project and allow for the examination of seven conditions recommended for the permit change by the Planning Commission as well as other ideas.

Thus far, the family has put a year of time and an undisclosed amount of resources into the process in discussions with local residents, the planning commission and several meetings and studies associated with the project, Darwiche said.

On Monday, Propst moved to reconsider the CUP request on Sept. 20, according to Chalice Weichman, Teton County deputy administrative clerk, with the understanding that Darwiche use the time to make an effort to resolve issues with the neighbors and to further mitigate impacts of the permit.

The motion passed by a 3-1 vote, with Newcomb voting no.

Commissioner Natalia Macker is scheduled to return from maternity leave on July 5, according to Alyssa Watkins, administrator for the commission, so in theory, will be present to vote on the project in September.

Why Wait?

Though Darwiche said he appreciated the continuation, he questioned the timing given that if the project was allowed to proceed, he could easily have tenants living in there by August, if not earlier.

“I think what we’re going to do is try to work with them in good faith,” Darwiche said Monday, “but we’re not going to do this forever.”

The items and conditions brought forth by the planning commission and commissioners could be addressed much more quickly, he said, noting that he’s not sure how four months is going to make a difference.

“Four months is a long time for those living in their cars or camping out in tents, and we could be using this facility for housing sooner,” he said. “That’s the difficult part for us. Why not sit down and have those conversations now? Why wait when we are in the middle of a housing crisis?”

Pushback from the HOA & Residents

Even if the CUP is granted in September, Darwiche still has another battle ahead.

The Legacy Lodge project has received pushback from the Rafter J Ranch Homeowners Association (HOA) and a number of the roughly 1,600 residents who inhabit the 490 homes in the subdivision who said they objected to the Darwiche family circumventing the subdivision’s development process.

Although the Legacy Lodge is not part of the HOA, it is nonetheless part of the subdivision with a couple other commercial buildings and subject to the residential covenants, conditions and restrictions (CCRs) that can only be approved with a majority vote by the residents.

Dozens of letters to commissioners expressed concern about the impact of the apartments on the character of the community, parking and traffic issues within the community that would result in “an asphalt jungle” and a general degradation of lifestyle.

Others yet said they would like to see the lodge continue to be used as an assisted living facility, a notion that was supported by Newcomb and which drew laughs from the Darwiche contingent when it was brought up.

However, despite the apprehension of some, many other residents and local business owners said they recognized the need for workforce housing and thought the Darwiche offer was too good to pass up.

“Denying folks from different socioeconomic backgrounds the chance to experience housing security because of concerns that they might bring ‘more noise’ or ‘increased traffic’ puts theoretical possibilities ahead of lived realities which, to me, is unbelievably inhumane,” 8-year Rafter J resident Ariel Kazunas wrote.

Darwiche said that the project’s proponents held a handful of meetings with Rafter J homeowners to answer questions and address concerns, primarily with regard to traffic and water. The backers hired firms to study the impacts of the housing project that came back showing that the increase in traffic and water usage would be negligible from the building’s former use.

He added that backers had every intention of working with the HOA to meet their CCRs but first wanted to get through the public process of obtaining sign-off from the county to see if the project passed public scrutiny before turning their attention to working on private matters with the HOA.

These are two separate processes, and Darwiche said that the understanding that he had with the HOA board is that they would first tackle the public component with county commissioners before meeting privately to hash out additional conditions and concerns.

The family respects the residents’ concerns, Darwiche said, with the exception of “nonsense stuff” like taxi drivers smoking in the parking lot after their shifts. In his estimation, the project’s backers had fruitful conversations both with the HOA and residents and were taking their concerns seriously and were willing to work with them.

“They had a few vocal critics who let them wag the dog,” he said.

Looming Lawsuits

The chief source of complaints against the project was a perceived failure of Darwiche to follow the proper process for winning approval before seeking approval from the county.

An unsigned letter sent to Rafter J neighbors stated that Stage Stop had ignored the sequence of steps laid out in the Rafter J Master Plan that require a proposed developer to have resident approval for any proposed zoning change before submitting the proposal publicly to the Teton County Commission.

The letter also expressed concerns that had the zoning change been approved, developers would be able to increase the building size and occupancy and expand parking, likely leading to increased traffic, congestion and accidents in the area. The population growth would also mean increased use of the trail system as well as congestion on paved pathways and open spaces.

“The Rafter J HOA will not manage the facility and will have limited authority to enforce nuisance behavior,” the unsigned letter went on to state. “Homeowners could see a substantial increase in noise, late-night activity, and even crime.”

The letter also reminded residents that they are part of the Jackson Hole workforce and shouldn’t “be shamed into supporting unacceptable density and development” in their neighborhood.

Rich Bloom, a volunteer consultant who was called in to help advise the residents, echoed these sentiments and said that many other businesses with similar proposals had pulled out of the project once denied by the HOA and homeowners on Rafter J land.

It’s a matter of following the rules and process, he said, and the Darwiches did not.

Because Legacy Lodge proponents circumvented the process, Bloom said it put the company at odds with the HOA. Instead, the business owners went directly to the county for a planned unit development (PUD) approval, which the county granted.

“They poisoned the relationship because they had meetings with homeowners and did what they said they wouldn’t do,” Bloom said. “CCRs are being blown off and the government is overreaching and interfering.”

Currently, the Rafter J Ranch HOA is planning to challenge in court the zoning decision that allowed planning on the project to begin and has also threatened to file a breach of contract complaint and seek an injunction against Stage Stop should the commission approve the CUP request.

Darwiche disputed claims that Stage Stop was attempting to circumvent the HOA, and reiterated that it has been communicating with the HOA and had an understanding about returning to negotiations once and if a CUP was granted.

The pending lawsuits would have no bearing on the future of the project as far as the county is concerned.

“I am not aware of any language in the Land Development Regulations that prevent the applicant from either reapplying or asking for a continuance in the face of impending legal action,” Neubecker said in an email Friday.

Question of Character

All parties agree that workforce housing is a problem, though they appear at loggerheads on how to solve it.

Bloom said he objects to residents of the subdivision being accused of taking a “Not In My Back Yard” or “NIMBY” position on providing new housing for workers.

He added he would like to see the county come up with a cohesive plan that it sticks to when considering all housing projects. That way, those buying property would have reasonable expectations of what will or will not be built next to their land, rather than having the county approve projects on a piecemeal or case-by-case basis.

“The most destructive thing we have is project-by-project results,” he said. “It pits the community against each other and it’s terrible.”

For his part, Darwiche reiterated his disbelief that the county would shoot down a ready-made project for workforce housing that would not have cost the taxpayers a dime. He questioned Bloom’s desire to “create a chasm” where one doesn’t exist.

“He’s trying to make us out to be the bad guys,” Darwiche said. “I actually think that’s a divisive tactic, and one that doesn’t address the housing problem. We are asking to use existing infrastructure to provide housing, and I wish that we could come together as a community to try to solve the problem instead of tearing people apart.”

Darwiche said he hates to think what might happen when more businesses are forced to close down or sell out to large corporations because they no longer can afford to keep their doors open.

He grew up in this town, he said, and his father opened his first take-out restaurant in downtown Jackson in 1981, where he recalled running around the boardwalks as a child.

“Jackson is a collection of small, unique businesses,” he said. “If that goes away, will it still be Jackson?”

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