As rising home prices in Durango continue to outpace annual income growth, city officials are trying to create more affordable options.
The city of Durango adopted a housing plan in 2018 that laid out affordable housing goals. The city has quickly made progress in some areas, such as the number of long-term affordable housing units, but it has stalled in others, such as affordable zoning programs. City councilors supported revamping some housing goals and priorities during a study session Tuesday.
“Market-rate housing hasn’t been flying off the shelf, but we have had some success with our affordable housing program, especially since 2017,” said Mark Williams, a planner with the city.
In 2018, Durango housing prices ranked as high as Aspen’s when compared with income, according to the city’s housing plan. In 2017, the average housing unit in Durango was 6.9 times the average income, and housing prices are expected to keep rising faster than income growth.
This year, the median price for a single-family home in Durango is $517,000. For townhouses and condominiums, the median price is $340,000, city staff members said.
Despite the coronavirus pandemic, the La Plata County real estate market is still going strong, according to a city staff report based on information from Allen and Associates Appraisal Group. So far in 2020, residential sales transactions are 3% lower than in 2019, and properties are staying on the market for about the same amount of time.
Limited supply is choking sales, the report said. The supply of residential housing has dropped by 25% in the $200,000 to $800,000 range likely because of the pandemic. Since 2012, limited supply and high demand have driven up prices.
Big development projects, which help reduce housing costs, have been in short supply this year, city staff members said Tuesday.
“To really get to where the city needs to be – in terms of creating enough market-rate housing and putting some downward pressure on rental prices – we need those big projects,” Williams said.
In its 2018 plan, the city set housing goals, such as adding 1,000 long-term affordable housing units by 2040. With 572 units already created, several city councilors were ready to make that goal more ambitious.
“It seems like 2040 is too far out,” said Councilor Barbara Noseworthy. “We probably, at our retreat, need to discuss shortening that timeline for reaching 1,000.”
Most of those units are rental units. The city “hasn’t made much progress” when it comes to permanent, affordable owner-occupied homes, said Kevin Hall, assistant city manager.
“The market is really ... ravaging the price points on the units,” Hall said. “The fact that we’re not, at this point, creating jobs with significant incomes associated with them, means the gap continues to widen.”
Councilors also considered reviewing the 2008 Fair Share Ordinance, which requires certain residential developments to sell units (or pay fees instead) to increase affordable housing.
The ordinance has proven to be clunky and onerous, staff members said. Most developers choose to pay the fees instead of providing the for-sale units, which can drive housing prices higher.
City staff and council members agreed that looking at similar examples around the country might help improve the ordinance.
“It’s working on some levels ... but it’s an eight-cylinder running on four, and I think we can do better,” Hall said.
smullane@durangoherald.com
