If you’re aged 19-36 and don’t own your home, you’re probably not reading this in China…
— from an article by Rebecca Seales on BBC.com, ‘The country where 70% of millennials are homeowners’, April 2017.
Alright, yes, I am exaggerating when I say the two-hour Pagosa Springs Town Council debate, on Tuesday, November 2, “left us hanging”.
Fact is, the Town staff was eventually instructed to bring back suggested ordinances to the next Council meeting on November 18. It’s entirely possible the Council will seriously consider those ordinances at that future meeting, and present the town voters with some options that align with recommendations the Council has been knocking around since July. The Council has been clear, that it wants voter input on these important questions.
When the smoke clears, the Council might find enough agreement to approve one, or two, ballot questions for the April 5, 2022 municipal election… concerning additional government funding aimed at addressing a deepening housing crisis in Pagosa Springs.
Emphasis on the word, “might”.
The ballot questions might include a partial reallocation of Lodgers Tax. They might also include a new municipal excise tax on STRs — Short-Term Rentals, vacation rentals — based on number of bedrooms, or based on a percentage of total room fees collected.
As a member of the non-profit Pagosa Housing Partners (PHP) board — a group that has volunteered its services to the Council to help establish additional voter-approved funding — I’ve been paying attention to the Council’s recent debates and discussions, and have participated in the conversations whenever possible.
Back in September, the Council agreed that they’d allowed STRs to run amuck within the town limits. (They didn’t use that exact language, of course.) By allowing approximately 16% of the town’s residential housing to be converted into tourism rentals, the Council had permitted certain neighborhoods to become commercial motel districts, thus altering the former residential character of those neighborhoods. In early September, the Council placed a density cap of 10% on all residential-zoned districts, essentially creating a moratorium on new vacation rentals. Since STR permits are non-transferable, and since no new permits can be issued at this point, the obvious assumption is that the number of STRs within the town limits will eventually approach 10% of the available homes.
Eventually.
PHP would like to see that density achieved sooner rather than later. A series of PHP suggestions shared with the Council over the summer, to create a tax or fee assessed against STRs, have been aimed at accomplishing three things:
1. Provide a substantial funding stream to help subsidize future housing projects of various types, by various organizations.
2. “Level the playing field” between hotels (which contribute property taxes to the community at a 29% commercial assessment rate) and commercial STRs (which contribute to our schools, governments, fire district, library, at the much lower 7.15% residential rate). In other words, to give STR investors a chance to better support our community and its needs.
3. Encourage real estate investors to get out of the STR market and either sell their homes to local families, or rent long-term to local families.
I’ve also been part of a PHP effort to develop workforce housing plans that will move the housing needle in a positive direction. As a group, we’ve been talking with government and business leaders to see what we can do, locally, to address a problem that is global. That has entailed research into housing strategies in Colorado communities, and around the globe.
Following the Second World War, the United States developed a range of housing programs to encourage home ownership and home construction, including financial tools that, incidentally or intentionally, made some bankers and mortgage lenders very wealthy.
The benefits of home ownership are obvious. A family that’s building equity in their property investment is more likely to properly maintain and upgrade the home, as the years go by, compared to a renter who has no investment in the property.
Prior to 1945, less than half of Americans owned their own homes. By 2004, percentage had increased to almost 70%. But following the Great Recession, the percentage began falling, and now sits at about 65%.
The percentage is especially meager among Millennials — young people ages 20-39, here in the US — with only about 35% of families and individuals in that age group owning their own home.
That’s not necessarily a global trend, however. If you are a Millennial, and you are reading this in China, there’s a very good chance that you already own your home. 70% of Millennials in China are happy homeowners, according to the BBC.
Twice the rate of the U.S.
While the overall home ownership — for all age groups — sits at 65% in the U.S., the percentage in China is 89%, according to several sources I found online.
The nation with the lowest rate of home ownership appears to be North Korea, where all housing is (officially) owned by the government. Documents obtained by Wikipedia state that all residential properties are owned by the socialist government. Ownership of a house is illegal under the law, and will be sentenced to hard labor.
Here in America, many folks labor without owning a home — especially, perhaps, in Colorado mountain resort communities, and especially, perhaps, if they are Millennials.
We might ask ourselves: How is it that, after promoting home ownership for the past 75 years, the richest nation in the world finds itself with the same rate of home ownership as it had in 1979? And for young families, one of the world’s more dismal rates?
There’s nothing our local business leaders and government officials can do about America’s failure to facilitate home ownership for young families. But… can we do something about the rate here in Pagosa Springs? Is that possible? Are we clever enough to do such a thing?
At the very least, can we find ways to at least provide affordable rental units? Just because the U.S. as a whole is failing to meet the needs of its Millennial workforce, doesn’t mean we need to fail here in Archuleta County.
One of our PHP board members, Mark Weiler, is fond of the expression: “There’s no romance without finance.”
Based on the information (and the photo) shared above, China seems to be doing a much better job at romancing its housing dilemma than we are here in the U.S.
I wonder how they’re doing that.