A report from the La Plata County Economic Development Alliance released this month calls for direct public investment and more collaboration between local governments and the private sector, among other strategies, to address the workforce housing crisis in La Plata County.
“We can debate the need, (but) what we need to do is assume that we’re not going to be able to meet the gap anytime soon and just get going with solutions,” said Michael French, executive director of the La Plata County Economic Development Alliance.
With a grant from the state’s Department of Local Affairs, the La Plata County Economic Development Alliance commissioned Denver-based Cappelli Consulting and Durango’s Project Moxie to engage with local stakeholders to develop a three-year roadmap for workforce housing.
The report piggybacked off of a regional housing assessment completed last year by Root Policy Research for the Southwest Colorado Council of Governments and Housing Solutions for the Southwest, which found that La Plata County needed 453 units of housing by 2023 to meet employment demand amid skyrocketing rents and home prices and an influx of high-earning households.
The report identified six strategies La Plata County, the city of Durango, towns of Bayfield and Ignacio, nonprofits and private industry need to prioritize to address workforce housing. They include supporting the expansion of new rental housing, easing homeownership, developing regional projects at scale, preserving existing affordable housing, creating a local housing trust fund and engaging in education and advocacy.
Among the concrete recommendations, the authors suggest the La Plata County Economic Development Alliance establish a “Housing Catalyst Fund,” which would foot some of the pre-development costs for rental projects to limit the risk to developers.
La Plata County and the city of Durango should also move forward with projects to expand Three Springs, annex and redevelop La Posta Road (County Road 213), and create a below-market housing subdivision east of Durango, with the two local governments partnering to build out infrastructure, fund pre-development and offset unit costs to keep the housing below market prices.
The report’s “overarching recommendation” called for direct subsidies from La Plata County and local governments to aid private developers through a “buy-down program.”
A buy-down program can take a number of forms, but at its core it involves governments using money earmarked from affordable housing to subsidize the private development of workforce housing in return for restrictions that keep the units below market prices or limit those who can seek them.
“It could be working with a developer pre-development, working with inventory when it’s already on the market,” French said. “It could be a fair share program where a developer is going to develop and agrees that a portion of their development will get bought down (by local governments) and go to a specific AMI (area median income).”
Workforce rental housing – one- to two-bedroom units for people earning between 80% and 125% AMI — requires about $72,000 per unit in subsidies to keep prices affordable, according to the report.
In total, the report pinpoints nearly $100 million in subsidies necessary to support workforce housing projects in La Plata County with about half of the money coming from the state and federal governments.
The broad message of the La Plata County Economic Development Alliance’s workforce housing report was one of collaboration. Many of the solutions the roadmap proposed necessitate greater cooperation between public, private and nonprofit entities.
While some might question the role of government in spurring private development, French said local government is critical for addressing La Plata County’s workforce housing crisis.
With nearly $520 million in funding available between the state’s housing fund and the American Rescue Plan Act money the state has designated for affordable housing, local governments can funnel money into workforce housing.
“There’s going to be a lot of funding coming down the pike in the next year dedicated to equitable housing, so how does the county and the city, Ignacio and Bayfield, participate in that and make sure that they find shovel-ready projects and projects they can secure funding for?” French said.
Beyond securing and allocating funding unavailable to private developers, the work of local governments underpins housing development.
“Their job is really to do two things: No. 1 is provide infrastructure where it makes sense, and No. 2 is create certainty for developers through the pre-development and the planning process,” French said. “... We should make the process a little bit easier and also maybe absorb some of the infrastructure costs.”
To support the push for workforce housing, the report recognized the need for public engagement. The authors proposed the creation of a housing coalition comprised of community members who would conduct education and advocacy while also pushing local leaders.
Workforce housing is a communitywide issue and affects the local economy, which is why the La Plata County Economic Development Alliance is involved in housing, French said.
“It’s going to take some political will from the community,” he said. “It can’t just be public and (private) development that solves the problem. The community has to agree that this is a priority and maybe even vote down the road on how we find long-term and sustainable funding solutions.”
The issue of long-term and sustainable funding looms in the background, as do the changing demographics of La Plata County.
Though ARPA money will help local governments to stimulate the construction of workforce housing, it marks a one-time investment and must be used within a few years. ARPA money will not meet La Plata County’s needs or sustain the development of workforce housing, leaving local governments to consider alternatives, French said.
La Plata County Economic Development Alliance’s workforce housing report highlighted the “missing middle” – those who earn 80% to 120% of AMI, which ranges from $63,000 to $98,000 for a two-person household – who are priced out of the open market but do not qualify for subsidized housing.
Root Policy Research’s 2021 assessment found the “missing middle,” which forms the core of the workforce, was increasingly fleeing the county.
Between 2010 and 2019, more than 1,200 households earning between $35,001 and $75,000 left, but they were easily replaced by those earning more than $75,000, many of whom earn more than $100,000.
According to the assessment, La Plata County had more households earning $100,000 or more than any other income bracket, and that was before the COVID-19 pandemic.
“There’s no silver bullet here,” French said. “For us to solve this long term as a community, we’re going to need alignment between public-private entities and the community in determining what are the important variables to preserve our quality of life?”
ahannon@durangoherald.com
