Last week, the city of Durango closed its second request for proposals to help update the language and policies of its Fair Share Ordinance, and again, the city received no bids from local contractors.
The city wants to update the ordinance – designed to create affordable housing – to better reflect Durango’s housing market.
“It’s overly complicated to not only administer, but for the developers to comply with,” said Kevin Hall, community development director for the city of Durango.
Since June, the ordinance update has been through two bidding processes and has not received a single proposal.
“We put out a request for proposal a handful of weeks ago to find someone who would assist us in revising the program and work with the city and the community to find an alternative revision,” Hall said.
Since 2009, the city has had a Fair Share Ordinance that requires residential developers to either designate a portion of their development as affordable housing, or pay an fee in lieu of doing so.
“The developer either needed to build units or provide fees that were calculable to cost of 16% of the development being for affordable housing,” Hall said.
Shortly after the ordinance was adopted, the country fell into the Great Recession, and for years, the ordinance went largely unused.
“The economy shifted, and we didn’t see any housing activity for a number of years,” Hall said. “It wasn’t until probably 2014 where we started to see projects come forward that were falling within the purview of the ordinance.”
Fees collected from developers go to the nonprofit housing agency Homes Fund, and are then used to provide mortgage assistance to homebuyers.
“In essence, we were getting the affordability aspect through Homes Fund essentially subsidizing the mortgage of the unit,” Hall said.
With the recent spike in housing costs, Hall said, the Homes Fund has been unable to fill current gaps in housing with the mortgage assistance program.
“They’re unable to fill that gap because it’s so large between folks’ income level and the price point on the houses available,” Hall said
Because a proposal to update the ordinance was not received, the city is looking into other options.
“What really needs to happen is to look at Plan B, which is probably dealing with it in house. We have a lot of capable staff in house,” Hall said.
According to Hall, very few affordable housing units have actually been built under the ordinance.
“Developers have been paying the in lieu fee, which is understandable because it’s far less expensive than building a new unit,” Durango Planning Commissioner Joe Lewandowski said.
Lewandowski said land prices are key to building affordable housing, and suggested that the city take stock of its available land to see what can be developed.
“The city owns a former landfill at the corner of Holly (Avenue) and 32nd Street, and there’s problems with that because there’s nasty stuff underneath there, and digging that up you get into problems. But brownfield developments have been done all over the country,” Lewandowski said.
Brownfield development projects involve cleaning up an industrial site to be reused for another purpose.
As far as developers go, Lewandowski said that unless there is some incentive, it’s unlikely they would build affordable housing.
“Unless some land gets donated, or there’s some tax credit that a group of investors can get, I don’t see how affordable housing can really be built in any other way,” Lewandowski said. “For years, we’ve relied on the development community to build affordable housing, and it just can’t be done.”
njohnson@durangoherald.com
