Why building affordable housing in a resort community is difficult

A house in the Dillon Valley Vistas neighborhood is pictured in February. Dillon Valley Vistas is a deed-restricted development that started in June 2020 and has been developed by Summit Homes Construction.
Dustin Schaffer / Courtesy photo

As Summit County and its leaders continue to question the complexity of the lack of affordable housing in the community, many in the community suggest that building more units should be seen as a primary solution. But it is a complicated problem which cannot be solved with such a simple solution.

Summit County Housing Director Jason Dietz gave a long list of reasons why. First, the community has little land to develop, which makes it difficult to set up a project. Not only that, but it is also difficult to build rather than take out due to the height limits set by most jurisdictions.

“I’ve had a lot of developers – since my time here in the county – reaching out,” Dietz said. “They come here, they see there is a problem, they are on vacation and they want to help. And while you’re talking to them, there isn’t a large enough parcel of land that they could develop economically. … In general, across the country, it’s hard to find something big enough to get the economies of scale they need.

Getting the numbers to work for an affordable housing project is also difficult. Kimball Crangle, president of the Colorado market for Gorman and Co., said the problem applied statewide. Gorman is the company behind local projects like the Village at Wintergreen and Wintergreen Ridge in Keystone and Alta Verde in Breckenridge. Another local developer with a few workforce housing projects under his belt is Summit Homes Construction, which sits behind Dillon Valley Vistas, Blue 52 and Smith Ranch.

“Even though it’s not Summit County, it’s complicated to build affordable housing anywhere in any jurisdiction,” Crangle said. “Just because you build affordable housing doesn’t mean we get a discount on the price of labor or commodities like lumber or concrete, so it costs us the same. to build housing, whether affordable or at market rates. “

Crangle said developers typically use rent payments from tenants to pay off a mortgage on a housing project, but when rents are set at a cap to meet a community’s goals, that leaves an income gap. .

To make the numbers work, developers like Gorman are fighting over housing tax credits for low-income people. Gorman recently received one of these through the Colorado Housing and Finance Authority for Wintergreen Ridge.

While this plays an important role in the development of the second phase of Wintergreen, Dietz pointed out that a number of developers across the state are also vying for these low income tax credits. If Summit County developers don’t get a share, it is up to local entities, such as Summit County or a municipal government, to write a check that is a grant large enough to make a project feasible.

“With any housing for the workforce, there is no profit,” Dietz said. “You (need) a subsidy to make it affordable for the vast majority of local workers. This is why the market does not take care of it, because it is below the market. “

Summit County Commissioner Tamara Pogue said there was currently more funds available through federal sources, as well as the Colorado Department of Local Affairs. At the state level, Pogue said leaders were starting to have a better understanding housing challenges in communities like Summit County.

“I think there are a lot of loud voices in this conversation right now,” Pogue said. “Summit County is not the only mountain community that is struggling with this problem, and it is not just mountain communities that are struggling with this problem. “

But the list of obstacles goes on: Crangle said Summit County presents unique challenges for housing development that aren’t always felt in Front Range communities.

“The additional challenges of building in the mountains or in a typical mountain resort community are that you have (a) a very limited contractor base, you have limited construction seasons,… and so your windows. construction are shorter, which means that over the entire course of the project, your construction schedule is longer. This adds costs to the project.

Finding land, identifying sources of funding and developing a project take time. Pogue said some of the faster projects take at least 12 to 18 months to complete before a resident can move in. With this kind of schedule, construction does not solve the immediate housing problems. felt by so many.

That being said, local leaders are not giving up on building. There are already a few projects underway, like Lake hill near Frisco and Summit County Road 51 workforce housing project near Dillon. Pogue estimated the county was in short supply of around 4,000 rental units, and Dietz noted that it would cost well over $ 1 billion to meet that demand by building alone.

“It’s a huge number, and there isn’t enough money; I can tell you right away, ”Pogue said. “… (It’s) well over a billion dollars for Summit County alone. … To a certain extent, while we can keep building and we have to keep building, with the resources and dollars that we have, this will not solve our problem. We need to look at other strategies besides construction to try to alleviate the situation we’re in right now. “

About Brad S. Fulton

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