Movement of Baby Boomers into the area for retirement has dramatically changed the housing market.
This trend, coupled with a “wave of investors” purchasing and converting units into STRs (Short term rentals), has led to a very challenging market for workforce. These trends make sense from the investors’ perspective. Unaccounted for is the negative effects on the community—loss of teachers, challenges recruiting workforce, impact on the environment. Median home prices rose $150,000 in one year, with fewer than
10 percent of typical inventory for sale currently. Many stakeholders expressed regret that the town and county did not move faster to implement housing solutions before
costs were this high and the gap so wide. “Even doctors can’t afford to live in the area. Our economy cannot function without health workers, local government staff, grocery store workers.”
“When I hire I ask—Do you have a plan for where to live?” The town and county have been reluctant to cap the number of STRs, which has discouraged some hotels from opening in the area. The town requires a license for STRs, requires a two-year ownership before converting to STR use, regulates occupancy, and taxes STRs like commercial lodging. The county recently increased fees for STRs.
The area has a significant lack of supply of workforce housing including attached homes and condominiums. Eighty-percent of housing units are in HOAs. Pagosa Springs is a very small part of the county, and is limited in its ability to accommodate
growth. To adapt, workers are living in campgrounds, doubling up, living in their cars.
Core needs are for 50-120 percent AMI (Area Median Income)/workforce housing, both rental and for sale. The most acute need is for long term rentals, studio and 1 bedroom for workers. Nonprofit housing partners are a central part of the solution, as is continued education about needs.
Some stakeholders feel that a focus on missing middle products is misguided due to low wages of service and tourism workers; missing middle products are not affordable to the lowest wage workers who have the most critical needs.
On the other hand, state program AMI caps are too low for ownership and have not kept up with rising housing costs. Pagosa Springs is exploring land use solutions to facilitate affordability—offering density bonuses for new construction with a share of affordable units, embracing innovative building types (e.g., carbon containers), and examining barriers in the building and land use code.
For the county, solutions to explore include carving off land for workforce housing (including land owned by the school district and hospital), working with builders and landowners, and figuring out how to extend infrastructure in exchange for affordable housing. Employers are also doing more to address needs and providing modest amounts of workforce housing. These solutions are dependent on the county hiring a housing coordinator to manage solutions.
Some stakeholders feel that developer incentives are not a successful tool; it is hard to convince developers to build anything but luxury units given the high return those command. Instead, the region should require developer contributions—e.g., given some proportion of units, 10 to 20 percent, to housing workforce. Catching up to needs remains a huge challenge.
“Fee waivers, fast track, density bonus, loosening regulations…they haven’t seemed to work. They won’t [contribute to affordable housing] unless it is a requirement.”
“It shouldn’t be the priority of government to give people a second home.”