If you’re a homebuilder in La Plata County and you hear the term “affordable housing,” we fully expect you to do the big eye roll. We understand! It’s not that Durango area builders don’t want to create homes for all kinds of residents, we know they do. And it’s not that contractors are indifferent to the need for diversity in a healthy community.
Simply put, the demand for housing in our desirable area chronically outstrips the supply, making affordable housing a thorny issue. Not only that, home prices are rising more quickly here than wages, as the Durango Herald recently pointed out. We know that people in the building industry (along with everyone else) are aware there’s a problem.
The Risks of Building Affordable Housing in Durango
Since the federal government defines “affordable” as requiring 30% or less of a family’s income, it’s tricky to build affordable homes to buy or rent anywhere today. In La Plata County and within Durango city limits, it’s most often just too risky to even consider.
The challenges of building in La Plata County include hurdles like:
- Tracts of land with highly expansive soil, water shortages, or other inherent issues,
- The high cost of materials, meaning that it usually doesn’t “pencil out” to plan a subdivision or multi-family project that could be considered affordable, and
- No buyers lined up to finance the development, translating into high risk for a developer shouldering up-front costs and hoping to recoup later.
Within the city limits of Durango, additional headaches include:
- Limited land availability, with existing lots and tracts affected by requirements that can change at any time,
- Community review meetings where neighbors can protest a project which has already racked up significant costs, and
- Fees associated with every change.
Given the desirability of our area, shortage of buildable land, high cost of materials, and a tangle of regulations, homes are expensive to build and buy/rent, and they retain their value. La Plata County will probably never be the poster child for the government’s view of affordable housing.
What about attainable housing?
A newer term is in use today: attainable housing. This calculation doesn’t necessarily have a universally-accepted definition, but it’s based on where a buyer fits into an area’s income range and may include other factors like debt. In general, the term implies that a buyer pays more than 30% of their income in housing, therefore their home can be priced a bit higher than one considered truly affordable. But even this more relaxed category can’t fill the gap in our area where the average household income is lower than the rest of the state and the housing market is so competitive.
Getting to a Solution
Recognizing the problem, Durango implemented the Fair Share Ordinance more than ten years ago. It requires contractors working within the city limits to either set aside 16% of the units they complete as affordable or to pay a fee that goes to a non-profit offering mortgage assistance for buyers falling somewhat short of traditional lending parameters. A few homebuyers have benefited from the available funds, but not enough. City staff admits the program is “clunky and onerous,” notes the Durango Herald.
Creative ideas for addressing affordable housing abound. The National Association of Home Builders lists several on its website, including ways to build more certainty and stability in the approval process, incentives and fee waivers for developers, and local entities donating underutilized property. CNBC unveiled an interesting piece recently that suggests older hotels could be economically converted into affordable housing.
La Plata County should study such ideas and consider implementing those that might be appropriate for the area. We need those of you with real experience to weigh in on which ideas have the best chance of creating real change here.
A Real Call to Action
This is not the standard suggestion to “get involved” that concludes many articles—we truly need you! If you’re a developer or builder in La Plata County, or if you’re in an associated trade or just an interested citizen, we want to hear from you. We’d like to know your views on affordable housing, your ideas for where to go in the future, and what investment you’d be willing to make.
We will be re-energizing our Government Affairs Committee and the Land & Development Action Team. This issue will be the #1 priority. Moves are happening at local and state levels, and we need to make our voices heard. Now is the perfect time to join the HBASC and work with us.