Why building affordable housing in Summit County is difficult

Many believe the solution to Summit County’s housing problem is to just keep building, but the issue isn’t so cut and dry

A home in the Dillon Valley Vistas neighborhood is pictured in Feburary. Dillon Valley Vistas is a deed-restricted development that broke ground in June 2020 and was developed by Summit Homes Construction.
Dustin Schaffer/Courtesy photo

As Summit County and its leaders continue to puzzle out the complexity of the community’s lack of affordable housing, many community members suggest that building more units should be considered as a primary solution. But this is a convoluted problem that can’t be fixed with such a cut-and-dry solution.

Summit County Housing Director Jason Dietz gave a laundry list of reasons as to why. First, the community has little land to develop, making it difficult to get a project up and running. Not only that, but it’s also challenging to build up rather than out because of height limitations set by most jurisdictions.

“I’ve had a lot of developers — since my time here at the county — reach out,” Dietz said. “They come out here, they see that there’s an issue, they’re out on vacation, and they want to help. And as you talk to them, there’s not a big enough parcel of land that they could economically develop. … Generally, across the county, it’s hard to find something large enough to get the economies of scale they need.”

Getting the numbers to work for an affordable housing project is tough, too. Kimball Crangle, Colorado market president for Gorman and Co., said the issue is applicable across the state. 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 its belt is Summit Homes Construction, which is behind Dillon Valley Vistas, Blue 52 and Smith Ranch.

“Even if it’s not Summit County, it’s complicated to build affordable housing anywhere throughout any jurisdiction,” Crangle said. “Just because you’re building affordable housing doesn’t mean we get a price break on labor or commodities like lumber or concrete, so it costs us the same to build housing, whether it’s affordable or whether it’s market rate.”

Crangle said developers usually use tenant rent payments to pay off the mortgage on a housing project, but when rents are set at a cap to meet the goals of a community, it leaves a gap in revenue.

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

While this plays a big part in developing 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 the developers in Summit County don’t get a share, then it’s up to local entities, such as Summit County or a town government, to write a check that’s a large enough subsidy to make a project feasible.

“With any workforce housing, there’s no profit in it,” Dietz said. “You (need) a subsidy in order to hit the price points that are affordable to the vast majority of the local workers. That’s why the market’s not taking care of it, because it’s below market.”

Summit County Commissioner Tamara Pogue said there’s currently more funding being made available through federal sources, as well as the Colorado Department of Local Affairs. On a state level, Pogue said leaders are starting to have a better understanding of the housing challenges in communities like Summit County.

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

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

“The added challenges of building in the mountains or a resort community that are typical of the mountains is that you have (a) far limited subcontractor base, you have limited building seasons … and so your building windows are shorter, which means that over the full course of the project, your construction timeline is longer. That adds cost to the project.”

Finding a plot of land, identifying funding sources and the development of a project takes time. Pogue said some of the quickest projects take at least 12 to 18 months to wrap up before a resident can move in. With that kind of timeline, building doesn’t solve the immediate housing challenges felt by so many.

All that being said, local leaders are not giving up on building. There’s already a few projects in the works, such as Lake Hill near Frisco and the Summit County Road 51 workforce housing project near Dillon. Pogue estimated that the county is short about 4,000 rental units, and Dietz noted it would cost well over $1 billion to meet that demand by building alone.

“That is a massive number, and there’s not enough money; I can tell you that right now,” Pogue said. “… (It’s) well over $1 billion for Summit County alone. … To a certain extent, while we can continue to build and while we have to continue to build, with the resources and the dollars we have available to us, it is not going to solve our problem. We have to look at other strategies in addition to building to try to mitigate the situation we are now in.”

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