Photo: The Pagosa Springs Community Development Corporation and BWD Construction built ten homes last year at the west end of Pagosa Springs, to help address the community’s housing crisis. Only two have been purchased, as of this week.
The term “bureaucratic hell” was not used during the conversation on Tuesday morning at the Archuleta County administration offices.
That’s my own interpretation of the situation, however.
The Archuleta Board of County Commissioners were holding their biweekly morning work session and had listened to a report from Department of Human Services Director Heidi Martinez that touched briefly on the uncertainty of federal funding during 2025, and had also listened to a report on upcoming road maintenance projects from Public Works Director Mike Torres.
Next up was Emily Lashbrooke, Executive Director with the non-profit Pagosa Springs Community Development Corporation, also known as “the CDC”.
Ms. Lashbrooke offered a bit of sarcasm as she began her presentation.
“As you know, our labor of love project — our workforce housing — that we just love… had another hiccup.”
This labor of love began for Ms. Lashbrooke about two years ago, when her non-profit board of directors determined that the biggest barrier to a thriving economy in Pagosa Springs was the lack of decent housing that working households can afford. Ms. Lashbrooke’s background was mainly in other types of ‘economic development’, but she took her mission seriously and began the (painful) journey into the extreme difficulties involved in creating workforce housing in a town where, basically, only high-end housing has been created for the past decade.
The ‘hiccups’ encountered by the CDC over those two years have been overcome, for the most part. But not entirely, as we will see.
Many of the hiccups have involved a state housing bureaucracy that’s trying to address a widespread problem — a housing crisis — in numerous cities and towns blessed with different human and financial resources.
The CDC obtained grant funds in 2023 to assist with housing creation, and contracted with local construction company BWD to build ten homes in the Pagosa Trails subdivision at the west end of town, priced at $320,000 to $395,000. The plan has been to build a total of 35 to 40 similar homes in Trails and in the adjacent Chris Mountain subdivision, over a four-year period, and to sell them to deserving working families at affordable prices, thanks to various government and non-profit grants, subsidies and waivers.
It has proved to be something of a bureaucratic nightmare, to actually sell the first ten homes. As of this week, only two of the ten completed homes have been sold.
This, in a community desperate for workforce housing.
Ms. Lashbrooke:
“Our first two homes were unique situations. The first one was a USDA home, and the second, there was a large sum of money [available for a down payment.]”
USDA Rural Development provides lows interest loans in rural communities. I believe the large down payment on the second home came from Durango-based Homes Fund, which has been receiving state and federal grants to assist with home purchases by qualifying families.
“So this problem with the deed restrictions did not arise until we went under contract with the next two homes.
“The deed restriction was asking for the bank doing the mortgage financing to be the ‘second’ lien holder. Who knew that banks don’t want to be a ‘second’ lien holder?”
Let’s pause here and discuss ‘deed restrictions’. When federal, state or local governments provide grants, subsidies or waivers for housing, those governments typically want a guarantee that the subsidize home will remain ‘affordable’ for, say, 30 years. A deed restriction prevents the first owner of the home from selling the house, later, at ‘market rates’ and walking away with a huge profit ultimately underwritten by the taxpayers. Typically, deed restrictions require a future sale to be to a qualifying, lower-income family, with perhaps a slight price increase above the original price.
But even government-subsidized housing can go into foreclosure, when the owner fails to make timely mortgage payments. When a bank forecloses, they take possession of the house, and want to unload it as quickly as possible.
Apparently, in a foreclosure situation, deed restrictions can become a bothersome and time-consuming hurdle, to a bank which is less concerned about Pagosa’s overall economy and more concerned about the bank’s shareholders.
Ms. Lashbrooke consulted with “experts in the field” and with County staff, and came up with a revision to the County-approved deed restrictions that seems to satisfy the banks, while still protecting the governments’ investment as much as possible.
“Also, there were ifs, ands and buts added here and there [in the deed restriction template], and a little bit of everywhere, which also required us to come back for a new signature on the BOCC’s adoption… so the banks are good with it now.”
Commissioner Veronica Medina:
“Is DOLA still good with it, and anybody else that wants us to have this?”
DOLA being the state Department of Local Affairs, the primary source of state grant funding for the CDC housing project.
Ms. Lashbrooke:
“So, I think some of you may have heard me say this in the last month, but I’m tired of being the test dummy for DOLA. Or the Division of Housing. And this problem caused a ripple across the entire state. So La Plata County has an attorney on it already; Gunnison County; Summit County. I think Creede just ran into the same issue.
“So the Division of Housing is reviewing our deed restriction, and they also have withdrawn their deed restrict template.
“I believer the Division of Housing never ran their deed restriction [template] by bankers before they put it into play.
“Again, this is part of the ‘Building the Plane as Your Are Flying It’. And because we were the first round of grants that were funded, we’re feeling all the penalties. This hijacked us for about a week, non-stop, trying to find a solution so it didn’t collapse the two home sales we have on the table. We have been able to recover those two, and they are moving forward…”
The closing on CDC Homes Three and Four will be delayed by about two weeks.
Assuming no new problems rear their ugly heads.