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Durango ranks second most expensive community in Southwest Colorado

Report indicates housing is main cause of increased cost of living
The livable wage for a single adult living in Durango is $19.70 per hour while the livable wage in Bayfield and Ignacio is $18.40 per hour. (Durango Herald file)

Durango is rated the second most expensive community in Southwest Colorado in terms of household income needed to make ends meet, according to a report released this week by the Economic Development District of Southwest Colorado.

The report takes into account housing and income data from communities in Region 9, which includes La Plata, Archuleta, Montezuma, San Juan and Dolores counties.

According to the report, a typical family of four must have two working adults who each make at least $20.55 per hour to live affordably in Durango. In contrast, the same family could earn $17.07 (two working adults) to live affordably in Mancos and Cortez, which are ranked the least expensive communities in Southwest Colorado. And in Pagosa Springs, the most expensive community, a family of four would need dual incomes of at least $21.97, according to the report.

Economic Development Project Manager Heather Otter said supply of housing has not kept up with demand.

“Since our last recession, we have not kept up with the demand as far as building goes, or number of units being produced,” she said. “So they were already in short supply.”

She said the pandemic created situations where people could move to places more mountainous or scenic, which created high demand for housing when there was not enough housing stock to begin with.

“That impacts the availability for local residents, and then our short-term rental has exploded,” she said. “That’s something that’s quite popular. And it’s not just here, it’s across the U.S. in desirable places to live.”

Otter said short-term rentals have an impact on housing prices because every short-term rental takes that unit out of play as a long-term rental or one that can be occupied by buyers.

Colorado’s minimum wage is $12.56 an hour, which comes out to $26,577 a year. The report said most employers in Southwest Colorado are not paying a sufficient wage to meet the basic needs of a family of four.

A single adult would need to earn $19.70 per hour to live in Durango. That includes cost of housing, food, transportation, health care and taxes, among other miscellaneous expenses. When evaluating cost of living, the report found that rent is more than $200 over fair market value per month.

Some rent costs account for utilities such as water or trash collection, but not gas and electricity. The report said the cost of housing in Bayfield and Ignacio are lower but many commute to Durango for work adding to travel expenses. The wage for a single adult to live in Bayfield and Ignacio would need to be $18.40 per hour.

“Both affordable and workforce housing are important factors to consider in addressing our housing issues, however, our shortage of workforce housing correlates to our region’s ability to attract and retain talent,” Otter said.

She said it is important that people differentiate between affordable housing, which is government subsidized, and workforce housing, which is housing for people who are not eligible for government aid.

Otter acknowledged there are many second-home owners in Southwest Colorado but said there is not strong enough data showing a correlation between elevated cost of living and second-home ownership.

According to Region 9’s website, the most prominent labor industries in Durango are in retail, food and accommodation services. However, in La Plata County as a whole, it is retail and health care.

The report said when employees are not paid a livable wage they are forced to make undesirable choices, such as work a second job to pay for living expenses.

“We’re talking about people who have to work more than one job, which then can put pressure on other things in their life,” Otter said.

She said it may mean making a choice between having health insurance or not. It might mean an undesirable living space for the number of people in a family.

Otter said one of the ways employers can balance increasing wages and their profit margins is by developing a plan and understanding that it may not happen overnight.

“One of the first suggestions I would make is just to be informed about livable wage in your community and maybe even your surrounding communities so that you can see where you’re at on your pay scale,” she said.

The report advises building a coalition of workers, employers, government and organizations who work together to achieve a livable wage.


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