If you attended the Pagosa Springs Planning Commission meeting last night — and a fair number of people did attend — you may have been left with the impression that the Pagosa Springs ecconomy was booming. Three ambitious projects were on the agenda, and all were approved unanimously by the Commission:
1. The $500,000 ‘Mountain Transit Facility’ in the Harman Park subdivision, to be funded by Archuleta County taxpayers with the help of a large federal grant.
Last I heard, Mountain Express Transit, our local County-funded bus system, is fully staffed and able to cover all its scheduled routes, and has plans to expand service to Durango. I believe it’s one of the few businesses and organizations here in Archuleta County that has a full complement of employees. I’ve not heard anything about the system’s ridership, although many bus systems in the U.S. are struggling to recover from a loss of riders during the COVID crisis.
2. The Bison Shops and residential units, in Aspen Village adjacent to Pagosa Peak Open School and the new Four Corners Tire shop. Nine residential units and about 4,700 square feet of commercial space are planned for the 0.69-acre-parcel.
The proposal is to construct a mix of uses in three buildings, with a parking lot to south and east of the buildings. Building C incorporates a second floor which will include nine studio apartments, with five tenant-finish commercial spaces in the ground floor spaces.
3. A new 78-room hotel of approximately 79,000 square feet that will also include a 15,000 square-foot spa with 12 treatment rooms, a 1,700 square-foot restaurant, including indoor seating for 80, additional hot springs pools, and a private outdoor music venue on site. The proposal also includes 130 paved parking spaces along with an unpaved area for overflow parking to accommodate approximately 92 vehicles.
Where these ambitious new operations will find employees, and where those future employees will live, is a question that the Planning Commission did not address.
We will discuss the details of these three projects in a future editorial.
As mentioned in Part One, the 2021 study of the housing crisis in southwest Colorado written by Root Policy Research suggested that Archuleta County needed 800 additional housing units to have a more functional economy.
Since that report was written, additional residential homes in Archuleta County have been purchased by vacation rental investors, and converted into small motels.
And as we are discussing in this editorial series, at least one local motel is now being converted into residential apartments, perhaps to accommodate the working individuals and families who have been evicted from the residential homes converted into vacation rentals?
More recently, the local real estate market has been showing signs of falling prices. Depending upon your point of view, this could be a positive development. A 100% increase in the cost of a typical single-family home in Pagosa Lakes, between 2014 and 2021, has been pretty devastating to working families here. The cost of such a modest home has tripled since 2011.
Are we witnessing the beginnings of a ‘market correction’ in late 2022? Only time will tell.
What are the chances the homes prices and rental rates will return to 2011 levels? Or even 2017 levels? Slim to none?
Yesterday, I gave a brief summary of the public tour of the Pagosa Springs Inn & Suites, the three-story motel near City Market that’s currently being converted into 98 mostly-rather-small apartments by a Colorado Springs company called Pagosa Springs Apartments LLC. About 80% of the units will be either studios apartments or one bedroom units.
Here’s how the Pagosa Inn & Suites motel looked a year ago.
And here is how the building looked earlier this week, with new paint, and a new name: Pagosa Springs Apartments.
The exterior dimensions of the building did not change significantly, as we see. Nor did the sizes of the interior rooms, originally designed to house a visitor or traveler for a night or two. The same basic room sizes are now intended to house a full-time resident, couple, or family for 365 days a year. The same basic room sizes, now with an added kitchen squeezed into the room, and additional walls added.
Closet space? Maybe not.
The Town of Pagosa Springs worked closely with the developers to help make this project happen. Part of the cooperative work included the development, by the Town Planning Department, of a ‘density bonus’ policy that allows a developer of residential units to exceed zoning requirement limits, if a portion of the dwelling units are deed-restricted to serve ‘middle income’ individuals and families.
As we discussed yesterday, the Pagosa Springs Apartments set aside 25 units to have rents only slightly higher than what could be afforded by a household with an ‘average’ Pagosa income.
Here’s what the State of Colorado considers to be a reasonable rent in Archuleta County for a household earning 120% of the Area Median Income.
These are the published rental limits for the Colorado Housing and Finance Administration, for Archuleta County. The Town Council, in its wisdom, agreed with the Pagosa Springs Apartments developers that 25 units would be priced at 120% of AMI … or less. The problem with ‘Area Median Income’ in a mountain resort community like Pagosa Springs is, a large segment of the population are relatively wealthy retirees with incomes higher than a typical working family earns in Archuleta County. That fact skews the ‘AMI’ and creates ‘unaffordable rents’ like the ones shown in the chart above.
So then, it would appear that — as a result of their negotiations with the Town Planning Department, this new apartment building is allowed to charge $1,728 for a studio apartment of less than 350 square feet.
Presumably, the rest of the 98 units will be rented at ‘market rate’. Perhaps, for more than $1,728 per month for a studio apartment?
A Daily Post reader sent me a link to a website, yesterday, advertising a studio apartment in New York City’s East Village, one of the more gentrified sections of Manhattan.
New York City is well known for its high rents, and also for its relatively high wages.
Pagosa is becoming known for its high rents and relatively low wages.
