The Summit Board of County Commissioners has tweaked an assistance program to provide more money in reimbursements to homeowners who construct accessory dwelling units on their property.

During a work session Tuesday, Sept. 17, the commissioners met with housing department staff to discuss making the accessory dwelling unit assistance fund more successful during the next construction season.

Previously, the assistance program would pay back 25% of the construction costs up to a certain amount, the maximum being $60,000 for construction of a two-bedroom unit, the staff memo states.

To help homeowners construct accessory dwelling units, the commissioners told town staff to remove the assistance program’s cap on construction reimbursements. Now, the program will reimburse homeowners for 25% of the construction costs without a cap.

Summit County established the assistance fund in 2023 to incentivize the construction of accessory dwelling units, which the Commissioners have said are another tool for delivering more long-term housing for county residents.

But the assistance program has proven to be lackluster, with only a handful of applicants and even fewer people moving toward construction, according to a memo written by county housing department staff.

In addition to reimbursing homeowners for constructing an accessory dwelling unit, the program also offers reimbursements to cover 25% of the cost of converting an unfinished or finished space into an accessory dwelling unit or bringing a noncompliant accessory dwelling unit into compliance. Participants in the program also agree to place a 110% area median income rental cap on the dwelling unit.

The program previously capped reimbursements at $60,000 for construction of a two-bedroom unit, $50,000 for a one-bedroom unit and $40,000 for a studio, according to the staff memo. Reimbursements for conversion of unfinished or finished spaces were capped at $35,000 and $30,000, respectively, and reimbursements to bring noncompliant accessory dwelling units into compliance were capped at $25,000.

But housing department staff told the commissioners that the cap on reimbursements was too low to be an incentive to most people looking to construct an accessory dwelling unit, given the high construction costs.

“In general, the current economic climate does not appear conducive for building (accessory dwelling units) in Summit County,” the staff report states. “The costs of construction and interest rates are too high to incentivize homeowners to build an (accessory dwelling unit) with a cap at 110% (area median income).”

In the Nellies Neighborhood, which is currently under construction, construction costs have been about $500 per square foot, meaning a typical 500-square-foot studio would cost $250,000 to construct and a 1,200-square-foot two-bedroom unit would cost $600,000, according to the staff memo. 

In 2023, the county housing department received four applications for assistance through the program, of which two proceeded to the step of submitting for building permits, resulting in two funding agreements with applicants, the staff memo states.

But county staff said one of the final two applicants later withdrew, stating that they had made a decision to sell the home and the buyers preferred not to have an accessory dwelling unit encumbered with an area median income cap.

So far in 2024, the county has received three applications for the program and one has proceeded to submit a building permit. The budget for the assistance program in 2024 is $750,000, but staff anticipates that the maximum that will be spent from the program is $275,000 — and that is only if the existing applications proceed, according to the staff memo.

In addition to the assistance program, the county has sought to spur construction of accessory dwelling units by cutting red tape to make it easier to construct the dwelling units and offering free accessory dwelling unit stock architectural plans for homeowners.

The commissioners also instructed town staff during the work session to increase messaging about the accessory dwelling unit assistance program ahead of next spring, as people begin to think about construction projects.