In total, the income groups up to 120 percent of AMI comprise 58 percent of all households. To match new housing construction with these income levels to meet future housing needs, 58 percent of all new construction would need to be affordable to these households…
— 2008 Archuleta County Housing Needs Assessment
Read Part One
As I drove down Hot Springs Boulevard yesterday, past the Healing Waters Resort and the Springs Resort, I noticed some new wording on the reader board at the Quality Inn.
This huge lighted sign is one of the more visible and prominent signs in Archuleta County, based on height and square footage, and as I recall, the reader board portion previously offered messages aimed at potential motel guests: “Free WIFI, Swimming Pool, Comfortable Beds….” That sort of thing.
Realizing that the summer tourist season hasn’t fully kicked into gear yet, we might guess that 90 percent of the people driving past the Quality Inn sign in mid-May are permanent or semi-permanent residents, and the motel owners are probably making the best possible use of their reader board at this time of year by sending out a “now hiring” message to local residents who need jobs, or who know people who need jobs. I’ve never worked in the lodging industry, but my sense is that many of the available jobs do not require a college degree, and that the necessary skills can be picked up with a few days of on-the-job training.
To get a rough picture of the hiring competition Quality Inn is facing in their effort to attract reliable workers, I glanced this morning at the Classified Ads on the Pagosa Springs SUN website. I found 52 Help Wanted ads, about 22 of which appear to require some type of training or education or experience, and maybe 30 “unskilled labor” type jobs. Only two of the 52 ads suggested a possible wage. Archuleta County is offering $14-$15 per hour for an Appraiser I position. Another is offering $11 per hour.
GARDEN CENTER MERCHANDISER. Merchandiser wanted for a large wholesale greenhouse working in a local big box store. Seasonal part time. Plant and or retail experience helpful. Pay starting $11 an hour. Call (385) 224-6205.
Some of the ads indicate multiple job openings at the same business.
FULL- & PART-TIME JOBS! Pagosa Brewing & Grill seeks motivated team members for all positions. Potential cross-training opportunities as we expand. Applications at 118 North Pagosa Blvd. No phone calls, please.
In the same issue of the SUN, I found 16 residential rentals listed in the Classifieds. Four of the ads advertised for roommates, starting at $475, utilities included. Conventional rentals varied from $600 to $1,400 a month.
As mentioned earlier in this article series, the term “affordable housing” cropped up at the joint Town-County meeting last month, and took its honored place on a list of priorities that the BOCC and Town Council may possibly address, jointly, in the coming months and years. The term’s two words — “affordable” and “housing” — suggest the two key aspects to the problem we’re facing here in Pagosa Springs, and all across Colorado. Whether housing is “affordable” depends upon 1) the cost of the housing, and 2) the wages paid by the employers. Low wages, by themselves, don’t create an affordable housing problem. High housing costs, by themselves, don’t create an affordable housing problem. It’s when the wages paid don’t provide enough income to pay the rents asked… then we have an affordable housing problem.
And the problem is felt by both the employees who then move away looking for a better situation elsewhere, and by the employers who find themselves asking their workers to put in overtime, to compensate for the lack of staff.
This would not be the first time the Town and County have worked together on the housing problem. They jointly funded the 2008 Archuleta County Housing Needs Assessment, for example. That assessment is now out-of-date, but it included some interesting comments on the affordable housing issue in Pagosa Springs prior to the global economic meltdown in 2007-2008.
RENTAL AFFORDABILITY
A widely used standard for housing affordability is that a household should not spend more than 30 percent of monthly gross income on rent or mortgage payments before taxes, utilities and other expenses. This measurement is called cost burden, and households paying more than 30 percent are defined as cost burdened. Based on the 2000 Census, approximately 42 percent of renter households in Archuleta County are cost burdened, as shown in Table 39. Included are nearly 20 percent of renters who are paying more than 50 percent of their income in rent, showing a significant number of cost burdened renters.
Yesterday, in Part Three, I mentioned the Chaffee County Housing Summit held in November 2013. Like Archuleta County, Chaffee County relies heavily on tourism to keep its economy running, and the housing problems there are similar to those we have in Pagosa Springs. (Since we haven’t had any public discussions about affordable housing here in Archuleta County since 2008, maybe we can learn something from another community’s discussions about the topic?)
During a panel discussion at that summit, we heard from the president of Chaffee County Habitat for Humanity, Margaret Gillikin.
“I assume that most of you are familiar with Habitat’s model? We are a home-ownership program. We sell our homes; the homes are not given away. Families carry a mortgage that is, maximum, 30 percent of family income. So however much it costs us to build the house, the mortgage is written for 30 percent of their income. This is my sixth year on the board, and in the past six years, we’ve moved from a level of building one home every other year, to building two homes a year. That’s been a very aggressive pace to maintain.”
Ms. Gillikin noted that, in other areas of the country, Habitat projects spend up to $20,000 on raw land for a duplex. In Chaffee County the land and development costs are typically in excess of $60,000 — an expense she labeled as “obscene.”
I’d like to share more of Ms. Gillikin’s comments, but first I’d like to place this charitable effort in perspective. As Ms. Gillikin noted, Habitat for Humanity is a home-ownership program. As of 2009, about 68 percent of U.S. households live in homes they own — an increase from about 62 percent in 1960. That implies that about 32 percent of households are renting. Home ownership is more common in rural and suburban areas than in cities. Homeowner equity, however, has fallen steadily since the 1950s. More than 50 percent of home equity, here in America, belongs to banks and lending institutions. Nevertheless, the federal government has been actively promoting home ownership through its generous support of mortgage agencies like Fannie Mae and Freddie Mac.
I think people generally assume that home ownership is preferable to renting, if the family can swing the mortgage payments. Home ownership allows the family to gradually acquire equity; it also allows for the pride of ownership to drive a higher level of building maintenance. The question we need to consider, however, is whether home ownership is the best model for addressing a severe shortage of affordable housing. If the number of affordable dwellings needed in Chaffee County is currently about 1,000 units, as County Commissioner Dave Potts had suggested earlier in the panel discussion, then — at a rate of two units per year — it would take Habitat for Humanity 500 years to meet the current need.
Ms. Gillikin continued:
“One of the partnerships that’s allowed our rate of building has been with the prison [in Buena Vista]. For the last two years, we’ve had prison work teams on our building sites three days a week. If we were depending upon only volunteers from the community, we would be building at a much slower pace.”
Ms. Gillikin noted that, as with other ownership housing solutions, a major obstacle is locating needy families that can also qualify for a mortgage.
“You actually do need to have an income.” (Some polite laughter from the audience.) “And recall that we are serving folks who are at that 30-60 percent of AMI [Area Median Income]. When we’re selecting families, it’s always our preference to serve the families that are the neediest, in terms of the housing they are currently living in. And I can tell you, the current housing stock in this area is… appalling. It is so frightening… the conditions that our neighbors are living in. Families living in trailers with no insulation, holes in the floor… where it literally costs $500 a month to heat one single room in a trailer… the whole family is camping on the floor, and they are spending $500 a month on heat…”
One of the limitations on Habitat, noted by Ms. Gillikin, derives from the fact that the national Habitat mandate requires home ownership. “We are precluded from investing our efforts into rental programs. And there is a huge need for rentals in this community…”
Ms. Gillikin noted that Habitat and other programs, serving families below 60 percent AMI, are leaving — unserved — all the families earning from 60 to 100 percent AMI.
“And I will tell you… my full-time job is as pastor of the Methodist Church… and my congregation is wonderful and loves to support me… but the reality of my profession is, that I come to my housing situation with an enormous student debt burden. Which means that I can’t afford to buy a home in Chaffee County. I never will be able to afford one.
“I submit to you that young professionals are increasingly going to have enormous student loan debt burdens. That problem is just going to get worse. I’m grateful that I have only $50,000 in student loans, as opposed to $250,000. So this is a problem that’s only going to get worse….”