Not a great time to build units at low cost
By Mark Reaman
Rapidly rising construction costs in the valley have put a dent in Crested Butte’s affordable housing progress. Instead of starting construction on four duplexes this year in the Paradise Park subdivision, the town has cut back to three, with the goal to get six units up and occupied by next year.
According to community development director Michael Yerman, the issue started to become clear when initial bids from subcontractors came in higher than expected to the developer, High Mountain Concepts.
The bids raised the price of each unit to $275,000, up from the estimated $257,000. That left no room for contingencies or profit. The plans were then revised and some units went from two-bedroom/two-bath units to two-bedroom/one-bath units.
The project was rebid and the costs came back even higher, resulting in the cost per unit being closer to $287,000. That was more than a 10 percent increase in price from original estimates and pushed the potential renters and owners up to the 140 percent of Area Median Income (AMI) level from the 120 percent level. A single person making about $70,000 falls into the 140 percent AMI.
The town is already committed to paying $18,000 in water and sewer tap fees and has contributed to design and survey costs. To return the price point so someone making 120 percent AMI (about $60,000 for a single adult) could participate, it would cost about another $150,000.
“High Mountain has been very good to work with and John and Karen [Stock] have even cut some of their costs to try to make this work and keep the costs down,” said town manager Dara MacDonald at Monday night’s council meeting.
“It is tough right now,” explained John Stock. “Steel in the last three months is up 30 percent,” he said. “You wouldn’t think it matters in a project like this but it impacts a lot of things, including our blades, nails and tools. Cedar is up probably 400 percent. That’s just the tip of the iceberg. It is not a great time to produce things at low costs.”
“I don’t want to waste more time before breaking ground so we want to get this going,” said Yerman. “We have to break ground on this soon to get people in next year.”
Councilman Kent Cowherd asked if the town could provide some in-kind service for something like excavation. Stock said it was possible but if the foundation hole wasn’t perfect, it could add up to wasted money and more time. MacDonald said she could look into it.
Ultimately, the council agreed to amend the original $2 million contract for four duplexes with High Mountain Concepts to now be $1.7 million for the construction of three duplexes.
Block 76 action
In other affordable housing action, the town is sending a letter to the original Verzuh annexation developers asking that Block 76, the property right next to the Rainbow Park soccer field, be included in the 2019 affordable housing build. If Bill Lacy and his partners agree, the council could see an amendment to the agreement at the August 6 meeting. The original annexation agreement stated that the Paradise Park subdivision needed to be completely built out before building could start on Block 76. If an agreement can’t be reached with the developers, the town will explore ways to reach the Paradise Park build out sooner rather than later.
Yerman said four development teams have responded to the Request for Qualifications. The council will choose three teams to continue in the process. The next neighborhood meeting to discuss the project is scheduled for August 15 so the three respondents can get further community input to prepare a conceptual plan.