Northwood said those currently staying at Silvercreek come from a variety of backgrounds. As of this week, multiple families, some with children, were living there, she said.

“It’s quite a large spectrum, a mixed population—traveling nurses from St. Luke’s and air traffic controllers,” she said.

In order to convert the building to workforce housing, Caplow submitted an application to the city asking to rezone the 2.2-acre Silvercreek parcel from “Limited Residential 1” to “Limited Business.”

Hailey’s “Limited Residential 1” district permits residential care facilities and multifamily units at a density of 10 units per acre. The “Limited Business” district allows for a much wider range of operations, such as daycare centers, gyms, restaurants and offices. The business zone also permits 20 multifamily units per acre.

In its current configuration, the property has two 12,300-square-foot buildings, each with 16 one-bedroom residential apartments and one commercial-grade kitchen. All units have mini-fridges and microwaves, and both communal kitchens have stoves, large refrigerators, ovens and pantry space.

Northwood—who plans to continue to manage rental units if the rezone goes ahead—said rent is currently $1,500 per month for a “280 to 300-square-foot” studio unit, and would stay at that rate post-rezone.

Mary Fauth, director of the Blaine County Charitable Fund, told the P&Z on Tuesday that the Silvercreek facility is essentially functioning as emergency housing and should continue to be used in that way “permanently.”

“We still have another 48 individuals that we’re looking at having to house in a shelter starting this weekend,” she said, referring to a Ketchum-led effort to house residents displaced from hotel rooms. “This sort of unit is critically needed—today—while we wait for more housing to come on the market.”

Fauth added that Northwood and Caplow are “allowing multiple individuals to hunker down and live together” at Silvercreek in order to make $1,500 rent, which she considered around market-rate.

“What Anita is charging … is right on or a little bit less” than Blaine County’s market rate for a studio apartment, Fauth said.

She also told the P&Z that the organization recently moved seven households into one of the Silvercreek buildings after they and about 100 other individuals lost temporary hotel room accommodations. Those households will join “injured individuals who need ADA access, people that lost housing last year, and newcomers who are working and have had their incomes verified,” she said.

(The Charitable Fund is providing rental assistance for those who can’t make the full $1,500, she said, paying the difference between 30% of a household’s recent gross monthly income and the monthly rent.)

Commissioner Dustin Stone said he thought the current building use was “perfect” and worried about current tenants being “kicked out by renters.”

“This really feels like an emergency use,” he said.

According to Community Development Director Robyn Davis, though, the facility’s current transitional-housing use is “not permitted” in Hailey’s Limited Residential zone. Hailey staff had “gone round and round talking about emergency housing,” she said, but concluded that Hailey city code does not allow for it.

“The current living arrangements at Silvercreek resemble that of a multi-family, which is not a permitted use within the LR-1 zoning district,” she told the Express.

City Administrator Lisa Horowitz wrote via email Thursday that Hailey’s interim housing policy adopted by the Hailey City Council “does not address homelessness.”

“We have made a commitment to our constituents to address workforce housing for those who reside and work in Hailey as our primary housing goal,” she wrote.

On Tuesday, Stahlnecker said that the need for emergency housing “is huge and will continue to grow” in Blaine County, but said dormitory living would be most suitable for the building.

“Large employers like the Valley Club and St. Luke’s could invest in a project like this and provide more affordable units for their employees,” she said.

The Valley Club, in fact, has had its eye on building employee housing in Hailey, according to broker Paul Kenny of Kenny-Bogue Real Estate and Valley Club attorney Jim Laski.

Kenny-Bogue Real Estate listed the Silvercreek building for around $7 million five months ago, according to the company’s website and the Multiple Listing Service.

In September, Kenny told the Express that the Valley Club, as well as Sun Valley Co., St. Luke’s, the Limelight Hotel and the Wood River Community Housing Trust, had expressed interest in the property, and Kenny-Bogue had an “offer in hand.”

“The prospects have been numerous,” Kenny said at the time.

Last week, the Valley Club was successful with its application to the City Council asking to amend city code so that “golf courses and recreational facilities” could provide employee housing in Hailey's limited-business and business zoning districts.

Up until that point, the club was precluded from building employee housing anywhere else except for the Recreational Green Belt zone—an area that runs along the hillside east of Old Cutters, follows Toe of the Hill Trail through south Woodside and permits sports courts and recreational trails, but little else.

The council agreed to strike that stipulation and, at the suggestion of Council President Kaz Thea, waived two further readings of the requested code change.

“I’d consider the Valley Club one of our key employer partners. They have a lot of full-time and a significant number of seasonal employees they need to house, and take [housing] very seriously,” Horowitz said at the time.

On Tuesday, Commissioner Sage Sauerbrey said he was concerned that a new buyer could demolish the buildings if the Limited Business zoning change went through.

“This site could sell and all these potential housing units could be converted to offices,” he said.

Both Stahlnecker and Kenny responded that it would be “unlikely” for the buildings to be demolished, given the value of the buildings themselves.

Sauerbrey also took issue with the projected rent, which he viewed as “very steep.”

Northwood replied that utilities, internet and laundry are included.

“That can make a huge difference in a single person or family’s life,” she said.

P&Z Commissioner Owen Scanlon said he had reservations about the facility's tight living spaces.

“When you go to college, you’re about the same age and there for the same purpose and don’t mind sharing kitchens,” Scanlon said. “But to put [working] people in there … it’s going to be an interesting study in human relations.”

On behalf of Caplow, Stahlnecker said the need for additional housing is immediate.

“The housing situation in the valley right now is extremely dire,” she said. Citing projections from the Blaine County Housing Authority, “there is the need for 4,700 to 6,400 units over the next 10 years to meet demand in Blaine County,” she told the P&Z.

Despite concerns over cost, space and the potential eviction of tenants, commissioners admitted that the city needed to find a legal solution to the non-viable arrangement at Silvercreek. They also approved a request from Caplow to allow “co-living dwellings” in Hailey’s limited business and business zoning districts, and define a “co-living dwelling" as "a building "containing multiple private living spaces, at least one shared kitchen, and at least one shared living space."

(The Silvercreek units don’t meet the definition of “multifamily unit” because they lack kitchen facilities.)

"The proposed text amendment to permit co-living dwellings within the Limited Business and Business zoning districts will offer more diverse housing options that other residential zones, like Limited Residential, currently do not offer or permit," Davis explained.

The commission approved the "co-living dwelling" text amendment on Tuesday—along with an occupancy requirement of four people per unit and a parking requirement of 38 spaces—and forwarded it to the city council for approval.

“We wanted to find something that was consistent with what the city’s code allows in similar areas, and looked towards the downtown residential overlay model of one [parking] space per bedroom and one guest stall for every six bedrooms,” Stahlnecker said of the parking requirement.

Currently, there are 19 existing stalls on site—enough to rent out one building, she said. She added that the buildings’ porte-cochères could be modified to fit more parking spaces, and a portion of land off of Cranbrook Road could also be used for parking.

“The applicant is willing to work with city to make sure that only 16 units are rented until additional parking improvements are made to the site to provide parking up to 32 units,” she said.

Stahlnecker also told the P&Z that she anticipated an increase in traffic if the buildings were repurposed. While hard to nail down an exact figure, she said the new housing would generate about 132 more vehicle trips per day than the previous residential care facility, as shown in an analysis by traffic engineer Ryan Hales.

According to a Jan. 4 letter from Boise-based Clear Solutions Engineering, the new workforce housing use would not increase overall water usage because new residents would “spend more time outside the facility each day as compared to the former residents.” 

Stahlnecker said the proposed renovation project at Silvercreek would occur in tandem with the construction of Caplow’s “40 McKercher” project—a forthcoming three-story, 44-unit apartment building approved by the P&Z last September. That apartment building is slated to go up directly south of the Silvercreek building starting this summer, she said.