EDITORIAL: Downtown Development, Beyond Your Wildest Dreams, Part Two

Read Part One

49% of households who rent are overburdened in Archuleta County…

— U.S. Census ‘American Community Survey,’ 2015

BWD Construction (“Beyond Your Wildest Dreams,” according to their business cards) is not the first construction company to come forward with a plan to address the affordable housing crisis in Archuleta County.

BWD representative Ryan Searle, presenting to the Pagosa Springs Town Council, January 2, 2018.

Almost two years ago, builders Steve Graham and Jack Bridges began meeting with the Archuleta School District and with the Town of Pagosa Springs, to discuss a conceptual plan to build small single-family homes at the south end of downtown Pagosa.

Those discussions generated some positive reactions from our government leaders, but so far have not produced a definitive plan. They did, however, help create an awareness of the seriousness of the housing problem.

We also heard a discussion about some affordable housing in the Harman Park subdivision, as proposed by developer Kelly Dunham, and we’ve also seen the Archuleta Board of County Commissioners donate $30,000 towards a plan to build 8 subsidized apartment units at the Casa de los Arcos housing complex on South 8th Street.

A couple of political issues were brought up by members of the public at the January 2 Town Council meeting, in response to the presentation by BWD Construction.

1. Does the Town Council want to give a “special deal” to one particular developer? Or should our local governments first define a uniform policy to subsidize urgently needed housing projects?

2. What does the term “workforce housing” really mean, as it applies to Archuleta County?

We will address the second question this morning.

As mentioned in Part One, that proposal might include 40 apartment units described by BWD as “workforce housing.” To facilitate the project, BWD has proposed that the Town waive all its ‘impact fees’ on the entire project, which also includes a commercial building and numerous “non-workforce housing’ units.

BWD is also asking the Town to finish the construction and paving of Hot Springs Boulevard — a street project that was begun nearly two decades ago, but is yet to be completed.

Hot Springs Boulevard, as it appeared in the summer of 2016.

During his January 2 presentation, BWD representative Ryan Searle described the proposed “workforce housing” apartments as sized between 718 square feet and 904 square feet, and as renting for between $800 and $1,200 a month. Numerous public discussions in Archuleta County have highlighted the need for affordable rental housing to serve Pagosa’s financially-stressed working class.

Mr. Searle presented those rental rates as affordable to folks making “between 64% and 96% of AMI” — percentages of the “Area Median Income.”

One problem with calculating the AMI for Pagosa Springs is that federal income calculations include not only working families, but also the community’s sizable population of retirees who have moved to this little, rural community since 1990 — and who have brought some “big city pensions” with them. In many cases, those retirement pensions provide incomes much higher than what an average employee earns in our “hospitality industry” economy.

If we want to see “workforce housing” developed in Archuleta County — what kind of rental rates do we really need to see? And are they possible… even with government subsidies?

The U.S. Department of Housing and Urban Development (HUD) has long defined “cost-burdened families” as those who pay more than 30 percent of their monthly income on housing expenses. Most local governments seem to accept that definition as they look at solving their housing problems. HUD also bases its housing subsidies on what is called the “AMI” or “Area Median Income” — as defined for various cities, towns and regions. According to my preliminary research, HUD currently defines the AMI for Archuleta County as somewhere between $60,800 and $67,100. (I have not yet been able to find a definitive figure.) If we use the lower figure, then a family earning “64% of the AMI” would have an income of about $39,000 a year — about $3,240 per month — and would be able to afford an apartment renting for maybe $942 a month.

That number doesn’t match the numbers provided to the Town Council by BWD Construction at the January 2 presentation.

We might instead look at the AMI as defined by the U.S. Census “American Community Survey.” The Census defines the AMI in Archuleta County as $45,607 — considerably below the HUD figure, it seems. So a family making “64% of the Census median income” would earn about $29,000 per year, or about $2,430 per month.

30 percent of that monthly income suggests a maximum rent of about $729 a month — close to the numbers Ryan Searle presented to the Town Council last week.

But is it really “workforce housing”?

If you visit the Bureau of Labor Statistics, you can find that the average wage (covered by unemployment insurance) is about $654 per week. If you multiply by 52 weeks per year, you get an average annual wage of $34,000.

That’s the average working wage, not the average “household income.” But if we are looking at a single working individual, or a single working parent with kids — and we have a few of those here in Archuleta County — the calculation of “64% of median income” produces an affordable rental price of $544 a month.

That’s about half the cost that BWD is proposing to be “workforce housing” rates. And the BWD rates are based on a proposal that requests sizable local government subsidies.

Could BWD build apartments that are truly “workforce housing”? Yes, they could — even without government subsidies. But the apartments would not be “718 square feet” or “904 square feet.” The apartments would be half that size.

In other words, the apartments would be about the size Americans lived in a century ago…

Read Part Three…

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Bill Hudson

Bill Hudson founded the Pagosa Daily Post in 2004 in hopes of making a decent living writing about local politics. The hope remains.