As owners of a second home in Little Cone Ranch, we oppose the Affordability Housing Mitigation Fee under consideration for San Miguel County. Others have challenged it on legal grounds. With backgrounds in economics and finance, we think the fee — even if legal — is poorly conceived and unlikely to work as intended.

Regardless of its legal status, the fee works like a tax by boosting the administrative cost of residential construction by factors of at least 10 for structures of 3,000 to 4,000 square feet and closer to 20 for larger houses. Thus, it exemplifies an economic principle: “When you tax something you get less of it.”

To gain perspective, consider how you would react if the local sales tax rate jumped similarly — from 3.9 percent to a 40 percent to 80 percent range. You surely would buy fewer taxed items or buy them elsewhere. People contemplating moving into the county would consider other destinations. In the end, we could find that “when you tax something too heavily, you get none of it.”

While building permits aren’t as large relative to construction costs as sales taxes are to general purchases, the same principles apply to the proposed fee, especially given its magnitude — at least tens of thousands of dollars in most instances. Proponents may think San Miguel County is so special that prospective homebuilders will suck it up and pay this exorbitant fee. Whether you believe this or not, it is implicit in expectations that the fee will generate meaningful revenue. However, in a state renowned for beauty, many prospective residents will simply look elsewhere or buy existing houses here. Either way, local contractors will lose potential business, local establishments will experience less growth, and the county will not only fail to collect the fee but also lose other revenue.

Our experience is relevant. Twenty years ago, we looked at several vacant lots before buying our current property. If the fee had been in force, we would have ignored vacant lots and — seeing a policy hostile to new construction — might have gone elsewhere. A few years ago, we renovated our house. Had the fee been in place then, we would have scaled back or abandoned the project. Instead, we created business for local contractors. And over the years we have paid property taxes and patronized restaurants and other businesses while in residence — all things that might not have occurred had the fee been in place 20 years ago.

In summary, the proposal is a strange proposition. The fee seeks to attract one group of people by taxing another group whose attachment to the community is marginal. Meanwhile, a much larger group — existing homeowners — is spared completely. If the aim is to provide affordable housing for the first group, why not spread the burden more widely? It would be better to rely on a tax, carefully designed and properly presented for voters’ approval, to achieve this laudable goal.

Pam and Ed McKelvey

San Miguel County