“We are sorry”; Teton County settles lawsuit over wrongly charged $25,000 housing fee
Stephanie Lucas
JACKSON, Wyoming (KIFI) — Teton County has issued a rare apology and a nearly $30,000 refund to a Jackson couple after admitting it “incorrectly calculated” an affordable housing fee that sparked a years-long legal battle. What the county called a staff mistake, business owners Trey and Shelby Scharp called a “hostage” situation over their building permit.
“Teton County made a mistake. We required you to pay an affordable housing mitigation fee that you did not need to pay,” county leadership said in a statement Monday. “We are sorry. We regret every minute of distress this litigation caused you,” the statement continued.
The case began in 2021 when local business owners Trey and Shelby Scharp bought a five-acre property with a 1,000-square-foot cabin on it. They planned to build a new family home on the property while living in the cabin, then turn the cabin into a rental after their new home was ready.
Teton County officials told the Scharps their cabin was too big to be considered an auxiliary dwelling unit. Then, when they applied for a building permit for the new house in 2022, the county said they were required to pay $25,000 for an “affordable workforce housing fee.”
The idea for the fee is that building in the Jackson area will create construction jobs and service jobs; however, because it is one of the most expensive housing markets in the country, these workers will not be able to afford housing in the same area. The resulting fee to the builder is meant to fund subsidized housing for the area workforce.
The Scharps sued Teton County in May 2025. “Teton County cannot hold building permits hostage until property owners pay excessive fees unrelated to their projects,” said their attorneys at the Pacific Legal Foundation, “Such requirements unfairly burden families like the Scharps who simply want to build a home and help solve local housing problems,” referencing the Sharp’s plan to rent out the smaller cabin once their new family home was finished.
“The residential site included a historic structure,” Teton County said, in reference to the existing cabin, “and credit for the historic structure was applied incorrectly. When this credit was properly applied, the floor area for the overall project dropped below 2,500 square feet, negating the affordable housing mitigation fee.”
The Pacific Legal Foundation says under the settlement agreement, “the County will refund the Scharps the $24,325 in ‘affordable workforce housing’ fees, as well as 7% interest since the fee was imposed, for a total of $29,909.00.”
The mitigation fees have been controversial and challenged before. Wyoming House Bill 141 would have prohibited cities and counties from imposing those fees; however, it failed in Wyoming’s 2026 Legislative session.