Summit County leaders discuss desperate housing dearth
June 4, 2016
With an ever-increasing number of locals turning to cramped quarters, cars and tents for a place to live, local leaders are searching for ways to solve Summit's housing shortage beyond a simple Band-Aid fix. Representatives from the county and each town gathered on Thursday to discuss the ever-worsening issue.
"We have to think seriously about this… can't insulate ourselves as a jurisdiction from this," Summit County Commissioner Thomas Davidson said. "We need to be working on all of these together."
The most recent Workforce Housing Needs Assessment, compiled for the county in 2013, noted between 1,035 and 1,785 units would need to be built or preserved for workforce housing by 2018. The estimated cost of that construction would be somewhere between $171 and $310 million, Breckenridge long-range planner Laurie Best said.
In addition, the greatest needs are for two- and three-bedroom units, ranging from 80 to 120 percent area median income (AMI), at about $60,000 per unit.
With the deadline approaching ever sooner, Rees Consulting, Inc. will release an updated needs assessment for Summit County, extending the estimates to the next census in 2020. So far, the predictions don't look too optimistic.
"This is a conservative estimate," Best said. "This is just to show the magnitude of the issue."
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Davidson highlighted a few key issues, including educating citizens about the need for funding and addressing a growing short-term rental market.
"We've seen other places where that has just overwhelmed folks with losing the ability for people who work here to be able to live here," Davidson said. "I think there's a lot more we need to do with AirBNB and VRBO, and what that's doing – we have to measure that."
Consultant Melanie Rees added the demand for second-home buyers is in part fueled by the short-term rental market.
"There are a lot of second-home wannabes," she said. "They can't quite afford it, unless if they can short-term rent it."
So far, Breckenridge and Summit County have several affordable housing projects coming down the pipe, with ground breaking set for Huron Landing later this month. The town and the county are partnering on the 126-unit project, with Breckenridge annexing in the Summit County land and contributing $8.5 million toward construction.
The town will also cut the ribbon for Pinewood Village II, which was funded in part by low-income housing tax credits (LIHTC). It will provide 45 income-restricted units, open to residents with incomes of 60 percent AMI or less.
In addition, Breckenridge will soon break ground on another project at the north end of town, in an area called "Block 11" near Colorado Mountain College. The first phase of the project will provide a total of 30 units, for about $6 million.
"We are definitely working on potential partnerships for that," Best said.
The second phase of the project is slated for next spring, bringing 66 units for an estimated cost of $18 million. Best said she hopes to get LIHTC funding for the project, which would cover about $12 million of the cost.
In total, the town has 167 rental apartments slated to go online within the next two years.
Frisco, meanwhile, is partnering with the county on the Lake Hill project, in which Summit acquired 45 buildable acres of land from the U.S. Forest Service.
"The thing that's challenging is, just like Smith Ranch, we have huge infrastructure costs in front of us," Davidson said.
Independently, Frisco is working on providing seven housing units for town employees.
"We've had a difficult time retaining police officers," town manager Bill Efting said.
In the future, the town hopes to develop deed-restricted units at Watertower Place, but has been hampered in their efforts by litigation. However, the town completed the final phase of the Peak One neighborhood last year, providing deed-restricted ownership options for locals.
"We've attained 11 or 12 new units in the last three years of affordable, deed restricted units," he added.
Silverthorne currently has 50 acres of land through the purchase of Smith Ranch, but has not been able to move forward with workforce housing plans. The town put out a request-for-proposal in 2014, but most bids came in $8 to $12 million above budget.
"At that point, that was something we couldn't handle," town manager Ryan Hyland said. "With 5A (a source of tax revenue dedicated to housing) moving forward in perpetuity, that certainly changes the equation from where we were in 2014."
In Dillon, plans for a mixed-use development were approved last year, with several market rate units and two 70-percent AMI restricted units.
"We have some other land around the town that we're working on platting, and selling," town manager Tom Breslin said. "We're working with the renewal authority to have workforce components in those."
Breckenridge Town Councilman Mike Dudick asked if private developers could be incentivized to construct apartments at lower rates of return (about 7-8 percent, as opposed to returns in the mid-teens).
"This isn't gonna happen with government money," he said. "Where the rubber meets the road is where the equity equation is with that money."
Rees said almost all affordable housing developments are the result of public-private partnerships.
"I do see them get pretty creative and be willing to take returns in the long term," she said. "There's flexibility perhaps in how the structures are done. But I don't think anyone's going to be willing to do that for under a standard rate of return."
The towns have also discussed more mixed-use solutions, including the model of residential developments just above commercial spaces. While Rees agreed it makes sense to put them together, those types of development are more difficult to pursue.
"One of the things we know we need to do — we need to get more sophisticated with what kinds of financing options we have," Davidson said.
He added that while Gary Martinez will retire as county manager in the future, he will be asked to work with the county in overseeing the Lake Hill master plan and helping develop affordable housing financing models.
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