A newly released regional housing report held a staggering but hardly surprising statistic about rent in Southwest Colorado: It’s higher than the fair market in almost every county and municipality in the region – and by as much as 45 percent in Durango.
The second in a series of reports, the housing study for the 2015 edition of the Southwest Colorado Index provides a comprehensive look at Region 9’s economic, social and environmental health. The study was first published in 1996 as the “Pathways to Healthier Communities Indicator Report” and has not been updated since 2008, when the Region 9 Economic Development District of Southwest Colorado took over production of the report.
Region 9 is composed of Archuleta, Dolores, La Plata, Montezuma and San Juan counties, and the report contains trends and conclusions in those counties regarding rental prices and affordability.
With the exception of Bayfield, Dolores and Dove Creek, rents in Southwest Colorado are up to 45 percent higher than the fair market rents set by the Department of Housing and Urban Development. The fair market rates take into consideration wages and income, and the expense of living within a particular county.
According to the index, Durango residents pay the highest rents in La Plata County, while Mancos residents pay the most in Montezuma County.
For a one-bedroom dwelling, the study found Durango residents pay a monthly rent of about $1,014 – over $270 more than the $740 fair market rent for La Plata County. This is the largest difference between actual cost and fair-market rent within the index report. Second largest is the actual cost, $800, for a one-bedroom in Rico, in Dolores County, compared with the $542 fair market rent for the same-sized unit.
The average rental cost for all of La Plata County is $900 for a one-bedroom, still exceeding the $740 fair market rent by $160.
Conversely, the saying, “Drive til you can afford it” often heard in Durango is likely referring to the city of Bayfield where residents pay under the $740 fair market rent at an average $715 for a one-bedroom.
Housing experts maintain the cost to put a roof over your head should not exceed one-third of a family’s income. Using that rule, researchers examined information supplied by property managers, online listings and newspaper advertisements over several months to come up with the cost of rental units in 2015 and calculate the minimum annual income an individual would have to earn to afford rent there.
So in order to afford the average $1,014 monthly for a one-bedroom in Durango, the individual or family would have to earn a minimum $40,560 a year – the highest in Region 9. Increase that to an annual $46,880 to afford a two-bedroom in Durango, averaged at $1,172. To live comfortably in a one-bedroom in Bayfield or Ignacio, a renter would need to earn only around $29,000.
The cheapest city in Region 9 by these standards is Cortez; to afford a $683-per-month one-bedroom unit, one would need to earn at least $27,320 yearly.
Renting is expensive, but so is home ownership, the report illustrates. Someone living within La Plata County would have to earn at least $79,000 annually – and in Durango, at least $90,500 – to qualify for a home loan, based on 2014 median home prices from the Colorado Association of Realtors. The index reports 62 percent of Durango families earn less than the $90,500 qualifying income to secure a home loan, compared with 54 percent that don’t qualify throughout the county.
In Ignacio, where the qualifying annual income is $29,675, only 20 percent of families earn less than that. Forty-one percent of Bayfield residents earn less than the $59,725 needed to qualify for a loan.
The index report is just more proof that it costs to live in Durango.
Durango Area Association of Realtors statistics show the city’s median home price also reached a new peak this year at $440,000, the highest it’s been since 2006. A vacancy rate of 2 percent and lowering, as well as dwindling development space add to the complexity of the issue. And according to the State Division of Housing, rent prices in Durango have increased 38 percent in the past three years.
jpace@durangoherald.com
Low wages salt wound of high rental costs
Based on the findings within the Southwest Colorado Index, the report concludes that most families must earn more than the basic hourly wage, or work multiple jobs, to afford rental housing. In other words, it’s not that Durango and surrounding communities are necessarily inhabited by the rich; but rather the cost of living is too high.
And that’s a problem, Regional Housing Alliance of La Plata County Executive Director Karen Iverson said. In order for a community to advance economically, it needs diversity in the workforce, and therefore housing.
“Housing is increasingly becoming unaffordable for working families,” Iverson said. “It is critical that we start to view this lack of affordable workforce housing as an economic issue. In order for our economy to grow, we need people to migrate into our community. In order for people to migrate to our community, we need affordable and desirable housing options.”
But the county’s housing picture isn’t complete without considering how wages factor in. Maureen Maliszewski, director of La Plata County Thrive! Living Wage Coalition, said much of Durango’s workforce isn’t adequately paid, which of course directly impacts where they can afford to live.
“The service industry, restaurants, motels, the tourism industry, cleaning services – that’s a high percentage of workers in Durango who often have low wages,” Maliszewski said. “Of course, some of those workers are tipped, but some of them aren’t.”
According to Thrive!, the livable wage in 2015 in La Plata County is $12.79 for a single person, who would need to hold down 1.55 jobs to earn that if he or she was making minimum wage.
“No doubt Durango is an expensive place to live,” City Council Christina Rinderle said. “We’re working with our partners, the RHA and others, to help address the problem.”
That partnership resulted in the opening of Lumien Apartments this fall, one of 12 dwellings in La Plata County to receive low-income tax credits and the first rental development for the community in seven years. Rinderle said Lumien was a win, and the city is “just getting started” on what will hopefully be many more affordable dwellings. RHA and the La Plata Homes Fund are trying to bring 100 additional units of affordable housing to the area within five years.
