The Town Council meeting last night, at the Ross Aragon Community Center, was a bit of a letdown, if you were expecting some ‘big spending’ to take place.
The spending was fairly modest.
I was counting on hearing a vote — for or against — on whether to purchase the 3.4-acre parcel just south of the First Street Bridge for $1.25 million. That vote was supposed to provide the primary content for this ‘Part Two’ of my ‘Big Spenders’ editorial series.
The vote didn’t happen.
The Council did authorize some incidental spending, including $50,000 to hire a company to locate underground pipes in the downtown area using “Ground Penetrating Radar”; $33,000 for new decking on the Veterans pedestrian bridge; and a wood chipper for $64,000.
But when the proposed Ordinance 994 came around — an authorization to spend $1.25 million on a vacant parcel that sold most recently for $62,000 — Mayor Shari Pierce suggested that the ordinance vote be tabled to a future meeting.
Only four of the six Council members were in attendance last night — Mayor Pierce, Matt DeGuise, Gary Williams, and Brooks Lindner — and considering the financial impact of Ordinance 994, the Mayor suggested that the vote be delayed until April 4, so that all six Council members could participate in the decision.
The other three Council members agreed that an April decision would be more appropriate. Assuming all six members can be present, of course. (NOTE: The Town will be accepting applications for a vacant Council seat created by the resignation of Jeff Posey earlier this month.)
The Council also tabled a scheduled discussion about existing Short Term Rental policies.
But they did vote to approve Ordinance 995, which reads in part:
AN ORDINANCE ADOPTING SECTION 6.7.13 OF THE PAGOSA SPRINGS MUNICIPAL CODE ESTABLISHING A VACATION RENTAL WORK FORCE HOUSING FEE…
WHEREAS, Root Policy Research has prepared the Town of Pagosa Springs Short Term Rental Fee Study dated November 28, 2022 (“Study”), which analyzes and quantifies the relationship between the operation of homes in the Town as short term rentals (STRs) and the supply and demand of workforce housing needed to support STRs, and calculates a fee on STRs that is necessary to offset their impact on workforce housing; and
WHEREAS, the Study made numerous findings that are incorporated into this Ordinance as findings of the Town Council, including that:
1. Town has in recent years experienced stagnated population growth relative to Archuleta County, a decrease in the number of children, and an increase in the number of seniors;
2. Tourism-related jobs have increase from 43% of the total to 45% from 2010 to 2019, with health care and social assistance jobs increasing from 7% of the total to 18% in the same period;
3. From 2008 through 2019 the Town has experienced an increase in workers living outside of Town and commuting into Town for work, from approximately 500 to 2,300;
4. Since 2012 home values in Town have increase substantially and the trend accelerated rapidly in 2020, with an increase of 85% between 2009 and 2022 while median income within Archuleta county for the same period increased only 39%;
5. From 2017 to 2022 rent prices have increased 122%;
6. Between 2010 and 2020 the share of housing units in Pagosa Springs that are vacant and not occupied has increased 10%, while licensed short-term rentals have increased from two in 2012 to 124 in 2022;
7. During the Study period, Pagosa Springs has experienced an increase in vacation home stock, declining permanent resident occupancy, rising rents and home prices, and an increase in STR registration and activity;
8. When housing supply for locals declines, availability of workforce housing diminishes and housing rents and prices increase, decreasing vacancy rates in the long-term market and creating a tighter market for long-term renters;
9. STRs decrease workforce housing supply and increase workforce housing demand: every 100 STRs in Pagosa Springs leads to a loss of 3 to 9 rental units and 3 to 7 ownership units that would otherwise be occupied by local residents, for a total resident housing loss of 6 to 16 units; visitor spending from STRs located in Town generates jobs in the lower end of the wage distribution creating housing needs for 13 households;
10. Considering an affordability gap that reflects the difference in market rate housing and what is affordable to workforce, weighted by the income distribution of existing residents, the Study determines that an aggregate annual fee of $2,687 per STR unit bears a reasonable relationship to the costs to the Town to mitigate the quantifiable workforce housing supply and demand impacts created by STRs; and
WHEREAS, the Study demonstrates that the continued operation of vacation rentals has a detrimental impact on the availability of workforce housing within the Town, causing the Town to incur costs to address workforce housing needs…
As the Town’s new attorney, Bob Cole, pointed out, the ordinance will authorize the Town to establish a workforce housing fee based on the negative impacts identified by Root Policy Research last year — but the ordinance itself does not specify a fee amount. The Council will have a chance to specify the amount of the fee at a future meeting, through a separate resolution.
Since this was a public hearing on an ordinance, as required, the Mayor invited public testimony. Henry Mashue was pleased to hear that no fee amount has yet been established, and hoped the fee would be set at a low amount to begin with. STR owner Steve Graham testified that the fee, if established, would impose a financial burden on his family.
The Council — the four who were present — voted unanimously in favor of Ordinance 995.
The next item on the agenda was a discussion about the Town’s existing STR policies, but that discussion was tabled in the interests of including the two missing Council members in the discussion.
At the end of the meeting, Mayor Pierce reminded the Council that they will be having a joint meeting with the three County commissioners on Tuesday, March 28, at 5pm at the County Administration Building.
Obviously, we will have some interesting spending discussions coming up in the future.