Small steps, regional thinking are keys to area’s housing issue
Mid-valley housing forum
Eagle County commissioners host a discussion about affordable housing at 5:30 p.m. Thursday at the Eagle County office building, adjacent to Crown Mountain Park.
The evening will feature a panel presentation and group discussion from 6-8. Panelists will include representatives from Aspen Skiing Co., Community Builders, the Summit Combined Housing Authority and the Eagle County Housing Department.
The Post Independent and its partners in the Carbondale event are also planning a follow-up housing forum in Rifle. That event will take place sometime in the spring. Details to follow.
A 40-unit Habitat for Humanity project that’s in the works using school district-owned land behind Basalt High School is the kind of small step that, multiplied using a similar model elsewhere and added to other efforts, can begin to put a dent in the valley’s affordable housing problem.
It’s a project that has been referred to by school officials as “a real game changer” in the effort to retain teachers who want to buy a house, rather than rent, said Scott Gilbert, president for Habitat Roaring Fork Valley.
“Rentals will get them here, but it’s not going to retain teachers long term,” Gilbert said of the Roaring Fork School District’s efforts to put $15 million from a recent bond issue into buying or building affordable rental units from Glenwood Springs to Basalt.
“They also need houses that they can own,” he said.
Half of the duplex units in the Basalt project would be reserved for qualified teachers, said Gilbert, who was one of the panelists at last Wednesday’s Carbondale housing forum.
The rest would follow the normal Habitat model of being sold at below-market prices to selected families based on income, and who are willing to put in the required sweat equity to help build their house.
It’s a step away from Habitat’s traditional formula of building one house at a time, and just one part of the overall solution, Gilbert said.
“Free land is a pretty good start,” he said at the forum, which was co-sponsored by Glenwood Springs-based Community Builders, the Carbondale Creative District, Third Street Center and the Post Independent.
Cheap land is also helpful, Gilbert said, referring to the 12 lots Habitat purchased in a bank sale at the Keator Grove affordable housing project in Carbondale a few years ago for $25,000 apiece.
That project is now home to four completed Habitat houses with another under construction, plus the 40 deed-restricted houses that were originally built there through a public-private partnership involving a now-defunct nonprofit organization in the late 2000s.
For now, Habitat stands as the only nonprofit developer in the region that is building new houses for below-market sales to qualified buyers based on income.
To get there on a broader scale will require new public-private partnerships, said KT Gazunis, executive director for the Garfield County Housing Authority, who also spoke at the Carbondale forum.
“I’m a numbers person, so for me it’s all about the bottom line,” she said.
It’s hard for developers to build houses that are affordable without some type of government or nonprofit assistance to buy down the costs, she said.
For the buyer, the numbers don’t add up for middle-income wage earners in Garfield County, where the median family income is $73,300.
That’s enough to afford $1,311 per month in rent, or pay a mortgage of equal amount, which will get that family into a house costing about $240,000, Gazunis said.
The only houses in the county that can accommodate a family of four for that price are located west of New Castle, she and others at the forum said.
What’s needed to build something in that price range in Glenwood Springs, Carbondale or Basalt are more public-private partnerships, Gazunis said.
Before the 2008 recession, Eagle County, where she formerly worked, did just that with development of the 282-unit Miller Ranch project in Edwards.
The county bought 30 acres for $2 million and worked with a low-income housing developer to build a mix of townhouses, duplexes and single-family homes targeting different income groups, from 60 percent to 140 percent of the area median income.
The $6 million in profit made on the project was split between the developer and the county, Gazunis explained. For the county’s part, that money was invested back into the community in the way of parks, a preschool and other amenities, she said.
“It was extremely political at the time, but now it’s one of the most desired places to live in Eagle County,” she said. “And there’s no reason we can’t do it again here.”
CHALLENGES ARE MANY
Last week’s forum, attended by about 100 people, touched on a variety of issues around the affordable housing issue, from the high cost of free-market housing, to high rents and the lack of available rentals, to high construction costs and other obstacles for developers to build housing that’s affordable to middle income earners in the valley.
“We did have a respite when the housing bubble burst,” said panelist Bob Schultz, of Robert Schultz Consulting land planners. “Now, the market has come back faster than most people anticipated, and we’re seeing a return to high levels again.”
For developers, the obstacles are many to deliver housing at an affordable or even reasonably attainable price, he said.
From high land and construction costs, to multiple layers of profit that are wrapped up in a single project, to demand from wealthier people who can afford the high prices, it all works to drive the costs up.
The result for the average worker in the valley is a huge gap between wages and housing affordability.
“And the demand side is strong, partly from people coming here who have made their money elsewhere,” Schultz said.
The rental side isn’t much better, and is likely to get worse because of the aging stock of existing rental housing in the valley, he added.
“You’re going to groan, but we’re in a lot better shape today than we’re going to be in the future,” Schultz said.
That’s because many landlords who have been good at keeping rents reasonable for older units are starting to sell out as those properties fall into disrepair, and their future is uncertain.
“Over time, that is going to become a greater and greater challenge,” Schultz said
For that reason, a big part of the solution will be to do something to preserve the existing stock of housing, he said.
“You can’t build your way out of the problem,” he said.
When it does come to new development, communities are going to have to overcome their aversion to higher densities, meaning more residential units packed into tighter spaces.
“Carbondale has been pretty good about absorbing growth, but the least dense area is the older part of town,” Schultz noted.
The affordable housing crisis is something that affects town government directly, said Carbondale Town Manager Jay Harrington.
Even though Carbondale, like Glenwood Springs, offers a down-payment loan assistance program for town employees, the housing they’re finding is very often not in the town where they work.
“We have a high percentage of employees who live far away, including one who is in Mack,” Harrington said of the western Mesa County town near the Utah state line.
“Just this week we had 12 people plowing snow at 5 a.m., and only two of them live in Carbondale,” he said, highlighting the long commutes town workers have to deal with.
Several buyer assistance programs are also offered through the U.S. Department of Agriculture’s rural housing services programs, said Randy Morton, the agency’s area representative who also sat on the panel.
“Our agency is very flexible, and we can open up purchasing options for households that would not qualify otherwise,” Morton said.
Again, though, the units those families are finding are located farther downvalley in New Castle, Silt, Rifle and Parachute/Battlement Mesa, he acknowledged.
Carbondale has done better than most Garfield County towns with its inclusionary housing requirements, where developers must deliver 15 percent of the overall housing units at below-market prices with deed restrictions.
Carbondale has 80 affordable housing units through that effort, including Keator Grove, which was developed as a 100 percent affordable housing project.
Even there, the units that don’t have income restrictions ended up selling for close to market prices when they first came on line, and are nearing those values again as the market bounces back.
If more affordable housing projects are to be built, Harrington and others who spoke at the forum said a dedicated funding source may be needed.
Pitkin County, through its housing authority, has been successful in developing deed-restricted housing using a real estate transfer tax that was imposed 40 years ago. But Colorado’s TABOR law, passed by voters in the early 1990s, now prohibits such taxes. Pitkin’s was grandfathered.
Harrington said a capital improvements tax that is on Carbondale’s April ballot could be used in part to assist developers in bringing some of the public infrastructure costs down.
When it comes to housing projects, government doesn’t tend to do a good job acting as the developer, Harrington said.
“But we do infrastructure well,” he said.
Schultz said it’s a matter of making housing a priority when it comes to taxes, as Pitkin County had the foresight to do.
“We have a tax for recreation in Carbondale, but not housing,” Schultz said. “That tells you what the priority is.”
He also suggested that every local government in the lower valley appoint someone on staff who would be an “advocate” for affordable housing.
“We need that person on the inside who is present and working within the system who helps us remember that this is important to us,” Schultz said.
Andrew Gorgey, the acting Glenwood Springs city manager, also sat on the panel. He reminded attendees that there are very different political philosophies among the three counties and municipalities that make up the Roaring Fork Valley when it comes to government’s role in addressing the issue.
When property foreclosures were driving housing prices down after the recession, that was the free market at work, he said.
“The philosophy then was that government should stay out and let the market do its thing,” said Gorgey, who at the time was the Garfield County manager.
“Not everybody sees the role of government the same way, and when you’re talking about solutions you have to frame it within the political realities,” he said.
When asked if the free market alone can solve the problem, panelists answered with a resounding “no.” But neither can government solve it alone, they also said.
“Government is not a solution, because it hasn’t been a good solution so far,” offered audience member Mike Blair, a retired planner and longtime member of the Glenwood Springs Planning and Zoning Commission.
“Individual projects don’t do enough, we need to do more as a region,” he said, suggesting that the free market, with the right incentives, can address the problem.
“The challenge is to private enterprise, which can manage a problem much better than government can,” Blair said. “Government does too little for too much cost.”
Carbondale real estate agent and affordable housing advocate Lynn Kirchner also emphasized a regional approach to the issue.
“This is not a new problem, it’s something that has been going on for a very long time,” she said. “I think we have to resource the communities that have gone through this and utilize that to address the problem here.
“One of our greatest challenges in this community, and the valley, is to work cohesively,” Kirchner said. “It’s not a Glenwood Springs, or a Carbondale, or an Aspen problem, it’s our problem.”
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