On Tuesday, the Town Streets Department was already plowing the snow on my dead-end street in downtown Pagosa Springs, before I was even out of bed. As a result of their early-morning work, the 16 people who live on my street were able to more conveniently tend to their various jobs and errands, around town.
In my own case, I was able to make a trip to the grocery store, where I spent about $50. Roughly $2 of that amount consisted of sales tax which will be remitted, at some point, to the Archuleta County government. Archuleta County will in turn share $1 of that amount with the Town government.
If everyone living on my street bought $50 worth of groceries on Tuesday, then the Town government would take in about $16 in sales tax. I suspect we could all agree that having our street plowed, first thing in the morning, was well worth $16.
The lady behind me at the grocery store spent $200, meaning that she contributed about $4 to the Town government yesterday, and another $4 to the County government. But she lives in Aspen Springs, and the Town Streets Department does not plow the roads in Aspen Springs.
Nor does the Archuleta County Road & Bridge Department plow the roads in Aspen Springs. This lady pays an additional property tax amount every year, to help fund the Aspen Springs Metro District — the government entity that plows her roads.
The man who operates the road grader in Aspen Springs, and plows the lady’s road, however, lives off North Pagosa Boulevard, in Pagosa Lakes. He was able to get to work on Tuesday because the Archuleta County Road & Bridge crew plowed his road.
We all pay our taxes — or maybe we don’t?
But for those of us who pay our taxes — income taxes, property taxes, sales taxes — the money we fork out is not necessarily spent on us, personally. That’s just the nature of taxes. You pay… knowing that someone else might get more of the direct benefit. Or less of the direct benefit.
In November 2021, the voters in Ouray, Colorado, agreed to create an excise tax, to be paid by tourists staying in vacation rentals. The tax amounts to $15 for every $100 rent collected by Short Term Rentals (STRs), and the revenue is dedicated to the Ouray sanitation system and to local housing programs. In exchange for their 15% tax payment, the tourists staying in Ouray STRs can enjoy flushing their toilets safely, and can eat at a restaurant where the waitress might someday have a house to live in.
Here in Pagosa Springs, STRs pay an annual licensing fee amounting to either $500 (within the town limits) or $700 (out in the unincorporated county). The Town applies half the license fee to housing programs, but from what I can discern by reading the Town budget for 2023, that amount will total only about $30,000.
The County also uses a portion of their licensing fee to support housing programs, but again, the amount is rather meager, compared to the size of the problem.
According to the vacation rental website AirDNA, the average income earned by an STR in Archuleta County is about $3,000 a month, or about $36,000 per year. AirDNA reckons that we have about 1,000 active STRs within the 81147 zip code. Give or take.
If the voters of Archuleta County and the voters of Town of Pagosa Springs imposed a 15% excise tax on tourists staying in local STRs — similar to what was approved by the voters in Ouray — that would conceivably generate more than $5 million per year, and the funds could be used — for example — for housing programs and road maintenance.
As we’ve discussed before in the Daily Post, our local governments have grown their budgets, over the past 20 years, at a much faster rate than most Pagosa Springs household budgets.
In 2005, the Town of Pagosa Springs — population then, about 1,650 — had expenditures of $4.0 million. In 2023, the Town of Pagosa Springs — population now, about 2,085 — expects to spend about $15.0 million.
How many of the 2,085 people living within the town limits have seen their budgets more than triple since 2005? Like, 375% growth? I think, not many. According to a 2017 study by Economic and Planning Systems, the average wage in Archuleta County grew, between 2000 and 2016, from $27,455 to $37,786. That’s a growth of only 38%.
The wages earned by local government employees, meanwhile, had more than doubled.
The Archuleta County government has also seen impressive revenue growth, though nothing like the Town government has seen. County expenditures in 2005 were about $22.6 million. In 2023, the County expects to spend about $53.4 million. Slightly more than double, over 18 years.
While our local governments were seeing remarkable growth in their revenues, and similar growth in government employee paychecks, the housing situation for much of the non-government workforce has deteriorated.
According to the Short Term Rental study provided to the Town Council last month, which 22-Town-Council-RootPolicy-1you can download here, the vacation rental industry’s negative impacts on housing did not come primarily from the conversion of residential homes into motels. The consultants at Root Policy Research calculated that the conversion of a hypothetical 100 homes into STRs resulted in the loss of only about 15 workforce housing units in Pagosa Springs.
Of course, that would suggest that — with an estimated 1,200 STRs now operating in Archuleta County, the workforce has lost 180 potential homes. Nothing to sneeze at.
The more important negative impact, Root Policy determined, was that our successful STR industry generates low-paying tourism-industry jobs, providing wages inconsistent with the high rents and home prices in Pagosa Springs.
The local construction industry has shown only a mild interest in addressing the workforce housing shortage, for understandable reasons. Rising interest rates; increased cost of building materials; and the superior profit margins that come with luxury home projects.
And the shortage of workers, of course.
Do the voters want our local governments to address these issues? To judge by last year’s ‘Workforce Housing Fee’ election, I would have to say, “Yes.”