Wyoming, counties locked in tug-of-war over state land development

Nov. 13—CHEYENNE — There is a tug-of-war between the state of Wyoming and smaller governments over land management — specifically, the authority to enforce local regulations on the development of state trust lands.

As housing prices continue to soar across the state, local governments are looking to expand residential development as a way to relieve a competitive housing market.

Members of the Legislature's Joint Revenue Committee narrowly failed to advance a bill draft on Monday — by a tie vote of 7-7 — that would have allowed the Wyoming Office of State Lands and Investments (OSLI) to lease state trust lands to residential developers.

Tackling the housing crisis wasn't the main intent of the bill, said OSLI deputy director Jason Crowder, but rather expanded opportunity for the State Board of Land Commissioners to maximize revenue off state trust lands, which is required under current Wyoming law. The bill draft also gave local governments "a seat at the table" in state land lease agreements for commercial or residential development.

"We were trying to strike that balance," Crowder said. "There are times when local governments may have an idea that the state of Wyoming may not follow."

Affordable housing in Wyoming

Experts have previously told lawmakers that the development of more houses would provide relief to a housing market crisis, where a limited number of homes available for sale has driven up prices.

Eric Protzer, a senior research fellow with Harvard Growth Lab, told members of the Legislature's Regulatory Reduction Task Force in October that expanded housing supply plays a key role in tackling the issue of affordable housing.

"House prices in Wyoming are persistently above what economic fundamentals would justify," Protzer said during the task force's October meeting. "The supply response of new housing construction to that demand has been relatively unresponsive (compared to) the average U.S. county."

The Board of Land Commissioners has three established objectives: improve revenue and investment value of the land, efficiently manage those lands and meet a specific need of schools and/or communities. The topic presented by the bill draft, Crowder said, fell under the third category.

The idea behind the proposed legislation was to expand community development on state trust lands that would offer a solution to a limited housing market.

Wyoming currently limits cities and counties in residential development, and Cheyenne, Sheridan and Casper have already approached OSLI in exploring how to expand these opportunities, Crowder said.

"The State Land Office, through ownership of the land, can be a partner in that affordable housing conversation with local municipalities," Crowder said. "It's allowing the municipality to place restrictions on the development of housing where they may be further limited."

Committee co-Chairman Sen. Bo Biteman, R-Ranchester, asked whether this bill was a revenue bill or a housing affordability bill. The goal of the committee, Biteman noted, was to maximize revenue from state trust lands.

"If we're going to build affordable housing, like a state-run affordable housing program, we're not going to be maximizing our state lands," Biteman said. "Because if we wanted to maximize revenue, the state would be building multimillion dollar homes in Teton County, not affordable housing."

State authority versus local

Teton County is currently being sued by the State Board of Land Commissioners, which consists of the state's top five elected officials, including Gov. Mark Gordon, over a House bill that was passed during the 2020 session. House Bill 162 — State trust lands-proposals and study singles out land development in Teton County, which representatives from the county claim treats it differently than other state land, according a WyoFile article.

The case centers around a dispute between Teton County and the state in which the county tried to enforce local regulations, according to the article.

The issue of local government control versus state control over land management was brought up by county commissioners during the Regulatory Reduction Task Force meeting last month. Jerimiah Rieman, executive director of the Wyoming County Commissioners Association, said commissioners have felt frustrated by the lack of partnership between them and state lawmakers.

"Counties are participating as cooperating agencies," Rieman said in October. "But we don't feel like we're being cooperated with."

Draft Bill 355 — Leasing and sale of state lands opened conversation between the state and local municipalities, Crowder said, where the topic of conversation has often been how to ease a tight housing market.

"This is just allowing an opportunity to grow and expand on state lands," Crowder said. "The need for affordable housing is there, and (local governments) see our land has a potential to build that affordable housing."

Rep. Liz Storer, D-Jackson, whose district in Teton County is currently being sued by the state, asked Crowder, "What does working with the community looks like in your mind?"

The issue lies between maximizing revenue from state trust lands, which is required under law, and maintaining local governmental autonomy over state land development. This tug-of-war has frustrated county commissioners and state officials alike, as seen in the court.

"I appreciate that your intention is to work with local communities, but, to date, Teton County seems like the guinea pig for moving forward with commercial leasing of state lands," Storer said.

Hannah Shields is the Wyoming Tribune Eagle's state government reporter. She can be reached at 307-633-3167 or hshields@wyomingnews.com. You can follow her on X @happyfeet004.