As I mentioned in Part Three of this editorial series, the Liberal Government in Canada, late last month, invited King Charles III to open the new session of Parliament, and they provided the King with information about what the Parliament hopes to accomplish in this session.
From the King’s “Speech from the Throne” on May 27:
Critically, the Government will undertake a series of measures to help double the rate of home building while creating an entirely new housing industry – using Canadian technology, Canadian skilled workers, and Canadian lumber. The Government will introduce measures to deliver affordable homes by creating Build Canada Homes. This mission-driven organization will act to accelerate the development of new affordable housing. It will invest in the growth of the prefabricated and modular housing industry. And it will provide significant financing to affordable home builders. The Government will make the housing market work better, including by cutting municipal development charges in half for all multi-unit housing. The Government will drive supply up to bring housing costs down.
We are seeing a different set of priorities, coming from the current Trump administration.
The current White House budget request seeks $33 billion in cuts to the Department of Housing and Urban Development, including cutting HUD staffing by 50%. The White House has also proposed the elimination of Section 8 housing vouchers, cutting rental aid by 40%, and repeal of the Fair Housing Act. The administration has ordered the Consumer Financial Protection Bureau to stop nearly all its work, effectively shutting down an agency created to protect consumers after the 2008 financial crisis and subprime mortgage-lending scandal. The overall effect will be a dramatic reduction in federal oversight of mortgage lending, servicing, and consumer protection, essentially returning to a regulatory environment of pre-2008 financial crisis standards.
It would appear that Colorado communities dealing with a lack of safe, affordable housing cannot expect much help from the federal government over the next four years. Quite the opposite, in fact.
From that perspective, you might say we’re on our own, to solve our own housing crisis. But Colorado’s Division of Housing wants to help out, and using money from the voter-approved Proposition 123, they have contributed to a housing effort by the Pagosa Springs Community Development Corporation (CDC).
I’ve been reporting on a short community meeting held on May 20, hosted by the Division of Housing, and I’d like to share one more quote from that meeting. We’re listening to Shak Powers, Regional Programs Manager, at Region 9 Economic Development. He was addressing about 20 local leaders involved in various aspects of the housing problem.
“This is a legislative thing [at teh state level]. It’s not anything that your level can do anything about.
“Somebody said earlier, these one-size-fits-all solutions aren’t working. And it’s because our well-intentioned Legislature puts together a bill, and after that bill is passed, they tell the good folks at DOLA and the Division of Housing and OEDIT and whoever is involved in the bill, ‘We want you to now take what we’ve given you, and come up with programs that work for the Eastern Plains and for the Front Range and for the Mountain Resorts and for the San Luis Valley and for the Western Slope.
“And they do the best they can, but what they end up with is often programs that don’t work for anyone.”
This comment resulted in knowing laughter from the gathered leaders.
He mentioned the cost of a Pagosa Area Water and Sanitation District (PAWSD) water and sewer taps for a new house in Pagosa Springs, which now total about $25,000.
“You’re never going to build an affordable house when the tap fees alone are $25,000.”
This is quite true.
But PAWSD has a policy to waive certain fees if you are building affordable workforce housing. Which is something the Town of Pagosa Springs has been attempting to do — unsuccessfully — since 2021, when they contracted with Texas company Servitas to design, build and manage about 70 rental units in the South Pagosa neighborhood.
That project was later relocated to a 3.5-acre parcel behind Walmart. The ground for the project has not yet been broken. The Town staff applied for a housing grant in 2022, but did not win the grant… and the project went into a holding pattern, as the cost of construction continued to skyrocket.
At the May 20 Council meeting, Servitas VP Garrett Scharton presented the latest version of the often-revised project plan, with numbers that seemed much more reasonable than what we saw back in 2022.
The project is now being referred to at “The Enclave Project” rather than as “The Servitas Project” and would include 58 apartment units and 12 townhomes, to be built using ‘modular construction’. It would be financed and owned by the Town but would be managed, presumably at a profitable rate, by Servitas. The current plan is, however, dependent upon a massive loan from the Prop 123 program.
As I understood the presentation, the construction costs would be partially covered by a Certificate of Participation — COP — issued by the Town government. We’ve often discussed COPs here in the Daily Post. The Colorado Constitution requires state and local governments to get voter approval before creating a long-term debt, so the financial industry invented COPs — which the Colorado courts have defined essentially as ‘short term debt’ even when the payments continue for decades. This is essentially an ‘end run’ around the voters and taxpayers, but it gets done regularly by state and local governments.
Conceivably, the Town could choose to use a General Obligation Bond (GO Bonds) to help finance the ‘Enclave’ housing project, and conceivably pay a lower interest rate than they would pay with a COP. Yes, the Town would need to get voter approval, but this route might result in lower rental rates for our workforce households.
Is the Town afraid of its own voters?
I myself don’t see the voters as a fearsome and daunting populace, but maybe I’m just too much of an optimist.
This May 20 presentation appeared to be simply an introduction to the latest Servitas housing plan. The Council did not vote to move forward with the plan. It was more of a ‘question-and-answer’ session.
Here’s a comment from Council member Brook Lindner.
“I mean, the last thing we want is to build this, and then Pagosa West builds their apartments… but then, nobody can afford the rent…”