The Archuleta Board of County Commissioners had a number of real estate decisions on their agenda on Tuesday. Three of them were tucked into the so-called ‘consent agenda’ — a set of perfunctory approvals that typically receive no discussion, nor even any thought. Here’s a sample of the three lot consolidations approved on Tuesday.
C. Consideration Of Resolution 2022 -_____ To Consolidate 2 Lots Into 1 Lot In Aspen Springs Subdivision No. 2, Owned By Harry And Pam Wilson
This request is to consider a Resolution authorizing the consolidation of Lots 30 and 31, Block 9, in Aspen Springs Subdivision No. 2, to become Lot 31X, owned by Harry and Pamela Wilson. This consolidation has been reviewed and is recommended for approval by the Development Services Director. The impact to the County budget includes fees paid per the County Fee Schedule, generally balanced by reduction in property taxes.
A seemingly endless stream of such lot consolidations have taken place over the past couple of decades.
Wealthier homeowners in Archuleta County often purchase the vacant lots on either side of their own parcel, “for privacy”. However, because a vacant parcel in Colorado pays a higher property tax rate — 29% — than a parcel with a residential home on it — 7.15% — a property owner can reduce their property tax burden by consolidating an adjacent vacant lot with their main residential parcel, making it into a single property.
This whole process reduces the number of available vacant parcels in the community, and — due to the law of supply and demand — drives up the price of the remaining vacant parcels.
Lot consolidations are just one of the mechanisms that has helped triple the price of a modest 3-bedroom home in Pagosa Lakes… on less than 1/2 acre… from $157,000 in 2011… to $450,000 in 2021.
But I personally believe the main cause of this enormous price increase was the arrival of out-of-town STR (Short-Term Rental) investors, plugged into Airbnb and VRBO. The laws of a ‘free market economy’ virtually dictate this type of small-town tragedy. As the housing supply is swallowed up by STR investors, the unsatisfied demand drives prices up.
And up…
And up…
Last September — faced with this housing crisis — the Archuleta BOCC decided to use their access to taxpayer funding to encourage the construction of modest single-family homes like the ones that now sell for $450,000… with a policy aimed at increasing the supply of homes, by incentivizing home builders to construct homes costing $300,000 or less.
In a ‘free market economy’, a substantially increased supply ought to drive prices lower.
The BOCC’s incentive plan was pretty simple. If you were a builder, and were willing to build a new single-family home for $300,000 or less, the BOCC would reimburse you an amount equal to the County property tax, for up to five years. This reimbursement would amount to approximately $2,000 over five years, on a $300,000 property. (Relatively less, for a home selling for less than $300,000).
You can download that September 2021 incentive plan here.
Of course, if you sold the house for, say, $310,000… well, you’d miss out on the ‘incentive’, but you’d end up with a significantly better profit than what the BOCC was offering you. And selling even a modest Pagosa Lakes house for $310,000 seems like a walk in the park these days.
Since the incentive policy was created in September, no home builders had indicated the slightest interest. (I have no idea if anyone actually knew about the policy.)
At any rate, the BOCC or County staff came up with the bright idea of making the incentives more attractive. They wrote up a new policy that applied not only to newly-built homes, but also to ‘used homes’ purchased by a new owner. And they bumped up the maximum price qualifying for the taxpayer subsidy, to $400,000.
This new proposed policy was on the BOCC agenda on Tuesday. (You can download it here.)
In a departure from normal procedure, BOCC chair Alvin Schaaf allowed the public to comment on the new policy, before it was voted on. So I stepped up to the podium and posed a question.
According to this policy, a retired couple from California can waltz into town, and buy up an existing $400,000 house (that might otherwise be suitable for a local working family, if it were priced more reasonably) and the County will give this California couple a five-year tax rebate… out of the taxpayers’ pockets?
Is such a policy really going to help our housing crisis? I suggested that it might do the very opposite, at the expense of the taxpayers.
A couple of other members of the public also raised questions about the proposed policy. County Attorney Todd Weaver then noted that, according to his online search (conducted during this discussion), there are currently a total of three homes on the Archuleta County real estate market priced under $400,000.
Faced with questions from the public, the BOCC tabled the proposed policy, with the apparent intention of designing a more reasonable incentive.
The other real estate issue facing the BOCC on Tuesday was the proposed sale of the historical County Courthouse, overlooking the San Juan River. The BOCC has received a number of offers, at various price points, offering various arrangements for allowing the current County uses of the Courthouse. Some offers suggest demolition of the historical building; some suggest preservation.
You can click on the chart below to view a larger version of the various proposals.
But a last minute offer had arrived on Tuesday morning, which the commissioners had not yet had enough time to review. Commissioner Ronnie Maez made a motion to allow additional offers to be submitted until 5pm Tuesday, February 22, with a final decision on whether to accept any of the offers set for Tuesday, March 1.
One of the offers the BOCC has received — from local developer Bob Hart — includes the stated intention of converting part of the 25,000-square-foot structure into new workforce housing units.
‘New workforce housing units’ is something our community desperately needs. As has been noted.
But who, exactly, builds those units, and with what goal in mind, will make a huge difference to the way Pagosa Springs unfolds in the future.
There are good housing solutions, and there are bad housing solutions.
There are also downright ugly solutions.
Let’s consider these options. Before our governments start throwing money at them…
Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.