EDITORIAL: Shelter from the Storm, Part Four
It’s a mess. And it’s complicated. And basically, it’s not really about money — but we probably think it’s about money.
A couple of friends have sent emails, over the past three days, in reaction to this particular editorial series about the Town of Pagosa Springs and its ongoing efforts to address the housing crisis in our little rural community.
One friend commented on the fact that the U.S. Department of Housing and Urban Development (HUD) seems to believe that the median household income in Archuleta County is $60,800, according to an online document concerning FHA, VA, and conforming loans at this website… and the qualifying income levels for those federal loan programs…
This Area Median Income number doesn’t quite match the $45,607 Area Median Income as publicized by the U.S. Census Bureau, another federal agency that perhaps doesn’t communicate effectively with HUD?
Nor does it match up with the $50,361 Area Median Income number that the Town Council accepted in the recent Archuleta County Housing Needs Study written by Denver-based Economic and Planning Systems (EPS)…
But then we have “the Town of Pagosa Springs”… the only incorporated town in Archuleta County. Not exactly the most affluent part of the community, perhaps. According to a website called “DataUSA” the median income for the town itself is about $32,000. Once again, that means half of the families living within the town limits have an income below that amount.
A bit of additional research suggests that HUD’s $60,800 estimate for Archuleta County is based on the “Area Median Income for a Family of Four.” Why HUD uses that kind of number, I am unable to report. It’s obviously not equivalent to an average household income, considering that — on average — only about 2 people occupy a household in Archuleta County.
In spite of these wildly different estimates of the average Archuleta County household income, the Town of Pagosa Springs is trying its best to offer some kind of incentives built upon a measurement of “Area Median Income” … as the Council, and others, discuss a proposed ordinance: Ordinance 878.
At any rate, we have maybe 12,800 people living in Archuleta County as we begin 2018. So then, about 6,400 people live in families that earn less than the Area Median Income. (Whatever number you choose to use as the AMI. The Town Council has not yet made a choice, but seem to be leaning towards the EPS number.)
And as 2018 begins its descent into the summer construction season, we probably don’t expect many of our local construction companies to be building affordable housing. From what I hear, our local contractors have their hands full building higher-end projects… a lot of second homes, and a fair number of retirement homes. That kind of thing. The type of homes that our government-sponsored “economic development” efforts have typically been promoting for the past 25 years.
But one company, at least, has made a preliminary proposal to the Town Council that might include some “affordable housing.” We discussed that proposal — by BWD Construction — in a previous Daily Post article.
One of the suggested government perks suggested in the BWD proposal, if the Town really wants to encourage the company to build 40 units of “affordable housing,” is the completion of Hot Springs Boulevard — a project that was left unfinished 15 years ago. In Part Two of this editorial series, I suggested that it might cost the Town $250,000 to complete that street.
A good guess? Maybe not.
Looking at the County Assessor maps of downtown Pagosa Springs, it appears to me that the unfinished stretch of Hot Springs Boulevard measures about 1,630 feet. Over the past two years, the Town has been completing the paving of a similar street a few blocks away: South 8th Street. That project appears to include about 2,650 feet of roadway (plus a new sidewalk.) The South 8th Street project will cost about $2 million when it’s finished.
So it seems reasonable to estimate that the completion of Hot Springs Boulevard might run in excess of $1 million.
That’s not exactly a “perk” for the developer — BWD Construction — because the Town intends to complete Hot Springs Boulevard someday. (Well, don’t they?) This $1 million project is presumably on the back burner and could conceivably be moved to the front burner. (Couldn’t it?)
But how would the rest of Ordinance 878 play out for BWD Construction and their plans for “affordable housing”?
I am putting “affordable” in quotes, because I’m not convinced that rental rates of up to $1,200 a month should qualify as “affordable” in Pagosa Springs. That monthly rent amounts to $14,400 a year, in a rural town that might have a median household income of $32,000 — meaning that a family will be paying half their monthly income just for rent.
But Ordinance 878 is currently being explored as a way to encourage developers like BWD to build affordable housing. If that regulation gets approved in its current form by the Council next month (or in the near future) then BWD would not get the incentives they are asking for. The current draft of 878 suggests that the incentives would be less than half of what the developers asked for earlier this month.
Does that mean, the development does not pencil?
And does it mean — the free market cannot solve this messy problem?