More mountain towns taking drastic measures to address housing shortages
CRESTED BUTTE, Colo. — Increasing housing prices, rent, construction costs, more remote workers and short-term rental (STR) properties have created an environment that is making our state’s beloved mountain towns practically impossible to live in for the people who are at the heart of the community.
Rocky Mountain PBS has found affordable housing is practically non-existent in several towns, like Ouray.
It was our first story published on this crisis and it garnered responses from people all over the state, many saying: it’s happening here, too.
Join the conversation here.
Rocky Mountain PBS has started checking on situations in these towns. You can use on the navigation bar below to learn more about each town.
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Crested Butte
The town of Crested Butte, nestled in the Rocky Mountains south of Aspen and west of Buena Vista, is making headlines this summer. Town council declared an emergency for the housing situation in the town of fewer than 1,500 people.
“So, on June 7th when we did our analysis. We had 115 job openings, full and part-time openings listed in different sources, and we only had one unit for rent,” said Troy Russ.
Russ is the Community Development Coordinator for Crested Butte.
Russ said this emergency declaration will allow the town to bypass some zoning and government bureaucracy because the town needs housing now. Not in six months—now.
The first thing the town was able to do under the order was buy a bed-and-breakfast that will be used for housing. People will be able to live there full-time starting August 1st. Without the emergency order, Russ said people wouldn’t have been able to move in until November.
The order also allowed the town to pass camping rules that would allow people to live and camp in town without going through council or public debate.
“We wanted to hear our residents and let our residents understand we hear them,” said Russ. “We are committed to helping resolve this issue and raise awareness in the county and the state and the federal level this is an important issue.”
This housing crisis all came to a head during the last year. Housing shortages in mountain towns have been building up for years, but the pandemic pushed it over the edge. Russ blames a big part of the problem on the change to remote working.
“The advent of remote working wiped out whatever available housing supply we had and that really is the last six to nine month phenomenon,” said Russ.
Without affordable housing, restaurants and other businesses in town are not able to operate at full capacity despite COVID-19 restrictions being lifted. Russ says that can sometimes leave two-to-three hour waits at restaurants.
“It’s impacting the quality of the experience but more importantly, it’s gentrification on steroids,” explained Russ. “You actually lose long-term residents; you lose people who have been here for generations and we’re losing that now and that’s the more important impact.”
Another big part of the reason for the shortage in Crested Butte are the STR properties. Vacant homes are being used for things like Airbnbs instead of housing local workers. Russ said council addressed it this past Monday, July 19, by passing a 12-month moratorium on new STR licenses after hours of public comment. Now, that kick starts what Russ calls “a very comprehensive” housing study in September with a change in short-term rental rules expected within a year.
Any concerns this move will curtail tourism—an essential part of the town’s economy—aren’t warranted said Russ. He said none of the 212 rental units are 100 percent occupied, so he’s sure there won’t be a dip.
“So, if we lose a license, we are confident it’s an elastic demand and they will find another short-term rental in town, or they’ll find it on the mountain (Mt. Crested Butte).”
Town council on July 19 also took steps to a ballot measure for this November that would create a second-home tax. The wording isn’t final, but the idea behind it is to provide money to the town if a home is bought but is left empty for the majority of the year.
Crested Butte does have several long-term housing projects in the works, too. They’re planning to put out Requests for Proposals (RFP’s) in October to developers for 45 to 50 units. Town officials hope construction will start in the spring. Then, more units will come in the following years. But in Russ’ mind, that doesn’t solve the problem.
“They [the developers] won’t build it without government subsidies, period. There hasn’t been a free-market rental built in Crested Butte since the late 1990s,” said Russ. “So, if we want to house our complete population, [the] government needs to reexamine its role related to housing and maybe formulate it very similarly to our interstate system.”
That’s the broad goal for Crested Butte in making that emergency declaration on housing: to get the attention of the state and federal government to address the very serious issue.
“Crested Butte is a unique community like every community across the U.S. and if you lose the people who make that character, you’re a different town,” said Russ. “So, we’re very concerned about becoming a ghost town to which only visitors are here.”
Pagosa Springs
Further south, in the San Juan Mountains, the 1,800 person town of Pagosa Springs is having just as many and similar concerns to Crested Butte and Ouray. STR’s and COVID-19’s remote working world are pushing the housing crisis to a boiling point.
“We were expecting this growth rate over the next five years, not really anticipating what really happened in a 12 month period,” said James Dickhoff, the Director of Planning for the town.
He, like Russ, said that the housing problem has been steadily getting worse over the years and then was recently amplified. Dickhoff said that last year, many second-home owners came for the summer and never left.
“Now we know the internet didn’t blow up and Zoom worked perfectly fine, everybody’s like ‘Wow, I don’t have to live in Houston anymore. I can live in Pagosa Springs and keep my Houston, Texas job,’” said Dickhoff. “We’re seeing a lot of that migration.”
In just the last year, Dickhoff said the median home price in Pagosa Springs has gone up by 33 percent, now sitting at about $360,000.
Of those homes, the planning commission has just recently determined that 16 percent of the homes within town boundaries are short-term rentals, and of those homes, 60 percent are owned by people who don’t live in the community.
“We’ve seen a plethora of properties being sold, the tenants being asked to leave and then those properties are converted to short-term rentals,” said Dickhoff.
Unlike Crested Butte's recent moratorium on new STR’s, Pagosa Springs is still in the stage of figuring out if they can or should limit those licenses.
“STRs have provided a humongous benefit for our tourism industry,” explained Dickhoff. “We don’t have enough hotel stock inventory to serve the number of people who want to be here.”
The problem to try to get more hotels in the town then goes back to benefits STR’s are seeing. Right now, those owners are paying residential taxes on STRs as opposed to commercial taxes, making it less costly.
“One hotel operator said it would be cheaper for him to buy a bunch of residential properties and convert them versus building a hotel. And we could use a hotel,” said Dickhoff.
He believes there needs to be drastic change for STR’s and specifically wants the state to address that.
“The department of housing really needs to do something, they are so entrenched in their old way of doing business,” said Dickhoff.
Until that happens, Pagosa Springs is trying a number of things to help get through the current economic crisis. That includes stopping tourism marketing for the town.
“After this last year, we’re hearing a lot of people requesting us to stop marketing to attract people because we had plenty,” Dickhoff said with a laugh. “It’s just been crazy.”
He said that most businesses in town have been breaking records every month during the last year, but are unable to attract enough staff to operate at full-capacity because there is nowhere for them to live.
Right now, there is one Low Income Housing Tax Credit (LIHTC) project in progress, which should result in 34 units this year. Dickhoff says others are waiting in the wings. Ultimately, he said, the developers need more incentives to build affordable housing in the town.
“We have to figure this out locally,” said Dickhoff. “And what local incentives can we bring to the table to entice developers who are doing very well selling market rate products.”
So, Dickhoff says the town is working with multiple partners like the school, hospital and utility companies to offer a greater incentive package which would allow for longer deed restrictions, keeping the housing more affordable and below market rate.
While more housing will help Dickhoff agrees with Russ that just more housing won’t solve the problem.
“We don’t want our workforce living in marginalized housing, right? We don’t necessarily want to push everybody to live in a 225 square foot apartment or in a tiny home or something that’s not a more equitable housing environment for our workforce,” explained Dickhoff. “We want them to be embedded in our community and living within the community they work in because that’s what makes a downtown district vibrant.”
Pagosa Springs town leaders have discussed an emergency action for housing like Crested Butte because the situation is dire.
“You open up our local paper, and there are literally three and a half pages of help wanted ads and three rental units available. All priced too high for our service workers to afford,” said Dickhoff.
He hopes the state will change the way it works and offer more incentives for developers to building affordable housing. In the meantime, Pagosa Springs is trying to find any possible way to help its workers.
“We’re trying to look at every single tool and every avenue and every opportunity out there that might be able to get more housing stock for the workforce,” said Dickhoff.
This is not the end of the full story. Countless people in towns across Colorado are struggling to be able to live in the town they work in. We will continue to update this story as we learn more. We would like to hear your story, too. Reach out to us to have your voice heard.
Amanda Horvath is a multimedia producer at Rocky Mountain PBS. You can reach her at amandahorvath@rmpbs.org.