I’ve been exchanging emails with a Daily Post reader from Texas, discussing the reasons why vacation rentals might — or might not — be ruining our Pagosa Springs economy and “small-town character”. One aspect of the debate concerns an (unintended?) future outcome: that Pagosa will become merely a “resort” rather than a place to live. This has already happened to other Colorado mountain towns, and my friend and I agreed that the once-quaint town of Aspen is a popular example.
The reader wondered if I could provide ‘data’ to support my point of view about vacation rentals. Some real facts. Because economic changes, and changes to a community’s character are, admittedly, dependent on many factors.
We’re supposedly rational beings and can make decisions based on ‘facts’. In my experience, however, the world is incredibly complex, and people can easily find ‘facts’ and ‘data’ to support 1) their gut feelings, and 2) their personal agenda, and 3) their own pocketbook. And people can easily ignore ‘facts’ that are inconvenient. Often, the demand for ‘facts’ and ‘data’ comes from folks with a vested interest in preserving the status quo. In Archuleta County, the current status quo consists of government regulations that allow for unlimited conversion of residential homes into mini-motels.
I proposed that, when a community is undergoing very obvious changes, perhaps the responsibility for providing ‘facts’ and ‘data’ should rest on the shoulders of those who want to preserve the status quo?
My friend wrote:
For this, I think this data would help:
- how many houses are in Pagosa ?
- how many are STRs ?
- how many STR’s owners only have 1 house vs multiple houses?
- how many affordable housing units – apartments, etc – are in Pagosa ?
- what programs has the city enacted to get affordable houses built ?
- how many code violations have been reported on STR’s, and which ones are repeat offenders, so we can break down those causing violations vs those not?
- how many summer tourists visit Pagosa? How many of these stay in hotels or the property they either own or know the owners vs the ones who rent STRs?
I wrote back:
Thanks for the thoughtful response.
Most of the information you asked about (above) is available. Perhaps a computer worker could figure out a way to consolidate it all, and present it to the Pagosa Springs Town Council prior to their “housing crisis” retreat in July.
How many houses in Pagosa? As you know, the incorporated town includes only 3 square miles of the larger (approx. 40-square-mile) community, and includes about 800 dwelling units. About 120 of those dwelling units are dedicated to lower income individuals and families, through tax credits, or through the federal Section 8 program. About 150 units are now STRs, within the town. Nearly everything that I’ve seen built in town since 2012 is now operating as an STR… sometimes “full-time”… sometimes “part-time”.
Our community — and in fact, the entire nation — is desperately short of construction professionals. The Archuleta County Housing Authority is currently building 34 units of low-income housing on Hot Springs Boulevard; tax credit housing that must be rented to low income families for the next 15 years. But their carpenters are commuting to Pagosa from Farmington, 100 miles away.
From what I can tell, the lack of construction workers has resulted from several changes. The most important is probably the construction industry crash in 2008-2012, when a significant percentage of Pagosa’s construction workers lost their jobs and presumably moved on to other careers. After years of unstoppable population growth (percentage-wise) from 1990 through 2008, Archuleta County actually lost population during that period, and housing values declined.
Another factor in the shortage of construction workers: public schools became saddled with the ‘No Child Left Behind’ laws in 2001, which were aimed at getting more kids to enroll in college and seek professional careers, and a lot of schools — including Pagosa Springs High School — dismantled their vocational programs, to focus on math and English test scores.
You can follow the local construction industry progress, after a fashion, by reviewing the County building statistics.
http://www.archuletacounty.org/184/Building-Statistics
The Permit Log lists the current projects. For 2021, we see 18 single family homes, one mobile home, and no apartments or condos. I’m hearing estimates of $250 a square foot for new construction. If that’s accurate, the smallest new home in the 2021 list (1,636 square feet) would price out at $400,000.
An average working family in Pagosa can barely afford $250,000 for a new home. Where does that leave the “below average” families? Because we know, by definition, that HALF of the working families have below average incomes.
I personally don’t think “noise and trash” are a significant problem with STRs. Our Planning Director, when asked by the Town Council, suggested that there are only a couple of STRs that consistently generate neighborhood complaints — out of 150 STRs within the town. (And we have to wonder if that’s mainly because they happen to be proximate to a person who likes to complain?)
But we can’t doubt that a neighborhood’s character changes when it becomes, essentially, a resort district… a “Main Street” where no one actually lives.
Increased computational powers have made it easier to generate “data”… but the main “data” that we have for Pagosa is median home prices, and median rental prices. The real estate industry tracks the home prices, and we know that the median home price has more than doubled since 2012.
No one tracks long-term rental prices; we’re guessing that the increase has been similar. It would appear that way, but we have no hard-and-fast numbers.
What has happened since 2021 to drive up home prices and rents in such a fashion? Pagosa didn’t become “more beautiful.” Average Americans didn’t become “more wealthy”. So, what the heck is going on?
We know that increased demand, or reduced supply, or the combination, drives up prices. How much would you need to increase the demand — or reduce the supply — in order for prices to double? That’s a question you might want to research. If you removed 15% of the existing residential housing in a small town, and converted it to vacation rentals/second homes… reducing the supply of residential options… would that cause prices to double?
If you created an online vacation rental platform like VRBO or AirBNB, to allow second-home owners to profit from their homes when they were living away from Pagosa… would that cause ‘demand’ to increase? Exponentially? Would that contribute to a doubling of home prices?
If a person were working for $18 an hour — working for the hospital or the police department or the school district — and living in a tent, because they couldn’t afford, or find, a rental… and if a mobile home was selling for $300,000… how long would they stay in Pagosa?
Probably not through the winter. No matter how many tourists were in town.
In fact, the more tourists, the less attractive and the less livable Pagosa becomes. Just ask the people who used to live in Aspen.
Bill Hudson began sharing his opinions in the Pagosa Daily Post in 2004 and can’t seem to break the habit. He claims that, in Pagosa Springs, opinions are like pickup trucks: everybody has one.