Durango’s housing market is a bleak landscape to some, dominated by high market rates and limited supply. There is little housing inventory available for low-income earners, and even units produced with low-income earners in mind often miss the mark.

Many recent housing developments in the city include units that target income earners between 80% and 120% area median income. But data from the Region 9 Economic Development District of Southwest Colorado show most wage earners living in the city earn less than 80% AMI, said Eva Henson, housing innovation manager for the city.

Chris Naylor, 25, just moved into a new rental on East Third Avenue this month. He moved back to Durango in March 2022 and, without initial luck in finding an apartment, sent out an “SOS” on Facebook in search of roommates.

A man who had recently purchased a home in Durango West I subdivision was also in search of roommates, being unable to afford his home on his own, and contacted Naylor. Naylor lived there until just recently, making the move to East Third Avenue mainly for the convenience of being in town.

What is area median income?

The U.S. Department of Housing and Urban Development defines area median income as “the midpoint of a specific area's income distribution.” HUD calculates the AMI for regions annually.

The AMI can be used to determine housing affordability and cost burden to homebuyers or renters, and to determine what AMI levels to target through housing initiatives to meet residents’ housing needs.

In 2022, 100% AMI in La Plata County was $68,700 for a one-person household; $78,500 for a two-person household; $88,300 for a three-person household; and $98,100 for a four-person household.

Eighty percent AMI was $54,960 for a one-person household; $62,800 for a two-person household; $70,640 for a three-person household; and $78,480 for a four-person household.

He said he has a roommate and rent is about $1,300 a month, a third of his earnings. He considers himself fortunate to have a job in the vacation rental industry that pays well enough to afford his current living circumstances.

“If I wasn’t so fortunate on the job aspect, or maybe just had a job, say, in the service industry or (other work) that I’ve done in Durango in the past, I really don’t think I’d be able to afford this home, or afford this situation that I’ve put myself in,” he said.

When he moved back to Durango last year, he attended a HomesFund course about home purchasing and financing. He said he went to the course partly because he was feeling desperate for a place to live and would consider buying a home if it were plausible, and partly because he wanted to educate himself about homebuying anyway.

He said it was “eye-opening” to realize how much effort – and money – goes into buying a home, considering earnest money, down payments and closing costs.

“That stuff isn’t cheap,” he said.

The biggest hurdle in Naylor’s way of buying a home is simply the cost. He said he doesn’t want to end up in a position where he needs roommates just to own a house, like his former roommate in Durango West I.

“I don’t know, when I am ready to make that move, if I will have the funds to support just having it be my home,” he said.

Most people he knows in their 20s who decided to buy a home ended up needing roommates, he said.

Henson, the housing innovation manager, said what the city needs is housing inventory for a more diverse spectrum of income earners so the city doesn’t end up with a housing inventory full of one-bedroom units all targeted at 80% AMI. But even progress toward that goal is slow.

She said creating housing for wage earners in the 80% to 120% AMI range and lower ranges is going to be small-scale no matter what.

The city uses a fair share program to ensure affordable housing units get built. Fair share is a city policy that requires developers to accept deed restrictions on 16% of units for a given project of four or more homes, donate land for future developments or pay a fee in lieu, she said.

The program is intended to get developers to include affordable housing in their projects. But she said Durango’s topography and other development restrictions often make paying a fee in lieu of deed-restricted units, which are meant for lower income earners, the most business-savvy decision.

“The city is now opening up its regulatory policy because we know it hasn’t been creating units; we know there’s issues with it,” Henson said. “We also understand there’s challenges with the methodology.”

The city’s innovative housing division is in the process of creating housing for different income pools – a continuum of housing to address the varying needs of residents, she said. A revised and modernized fair share program could aid those efforts.

The city contracted Denver-based Root Policy Research to produce a feasibility study for both rental and homeownership needs in Durango, with results expected sometime in the fall, she said.

At a February study session with City Council, she said Root Policy Research is researching workforce variables and performing economic analysis to determine appropriate fees in lieu of below market rate rentals for the city’s fair share program.

Henson said she knows how great the need is for below market rate housing. And she is wary of terms like “affordable housing” because the term means different things to different people, and it can often trigger an emotional response from people.

“I tend to try to be optimistic and hopeful in my job so that I come to work every day and do the great things that we’re trying to do,” she said.

The city has made some progress at making units well below 80% to 120% AMI. The Best Western motel conversion will create 120 units priced between 30% and 60% AMI, or $23,550 to $47,100 annually for a two-person household, she said. The units will be two- and three-bedroom units and are expected to be habitable in 2024.

It is progress, but much remains to be done, she said. Inventory of current housing stock, preservation of units, land acquisitions, significant funding sources and the need for more innovative housing programs are all factors at play.

“We have to continue to do the work,” she said.

As for Naylor, he remains optimistic and accepts his living situation.

“If I don’t want to live here and I don’t want to have to put up with the housing markets and the upsides and downsides that it brings, that’s my choice,” he said. “ ... I think we all want to look for a scapegoat for why the housing market is the way it is. It’s because I am living here currently. It is because I am part of the problem, in a sense.”

cburney@durangoherald.com