Tuesday, October 27, 2020

GVRHA looks to local builders for housing input

Looking at what it takes to build affordably and efficiently

By Katherine Nettles

Affordable housing has had some ups and downs across the valley over the years, with new rental, ownership and deed restriction options coming online in small batches and larger projects on the horizon but major projects like the corner at Brush Creek that have not come to fruition.

The Gunnison Valley Regional Housing Authority (GVRHA) has started reaching out to local builders to get their honest feedback on what makes or breaks affordable housing projects as they move to create more opportunities for the local workforce to live where they work.

During the last GVRHA board meeting in September two experienced local builders, John Stock and Joel Wisian, called in to share their ideas. Both have contributed to successful affordable housing projects in the north valley. Both suggested that clear ideas, an understanding of architectural requirements and higher density will benefit affordable housing projects of the future.

John Stock owns and operates High Mountain Concepts with his wife, Karen, and also founded the non-profit Student Organization Achieving Results (SOAR) in coordination with Crested Butte Community School. Stock has completed several independent affordable housing projects with SOAR in both Crested Butte and in Crested Butte South, as well as projects for the free market.

Joel Wisian owns Bywater Development with his wife, Amy. He recently built the Paradise Park affordable housing development with 27 units near Rainbow Park in Crested Butte, and also builds homes on the free market.

The two builders offered their input on what to do differently to find more traction for affordable housing projects in the future, taking much from their personal experiences working with the town of Crested Butte. Many of their suggestions addressed making affordable housing projects less risky for private developers to invest in, so they get more interest and even competitive offers.

“The public/private partnership is the only way we will efficiently get affordable housing,” said Wisian of the concept.

GVRHA executive director Jennifer Kermode agrees. “They were very informative,” she said. “They came up with a lot of things that I think we can do, such as trying to pack as many of the entitlement fees into the back end of the transaction so that holding costs aren’t quite as expensive on the front end for builders.”

This includes tap fees, which can be very costly to a builder at the beginning of a project when the prospect of return on investment is still a long way away.

“One thing we want to look into is why tap fees are the same for smaller homes as for larger homes,” said Kermode.

Another idea was for homebuyers to pre-qualify for the units in advance of breaking ground. “And then when we do lotteries before construction starts, we have homes that are already under contract,” said Kermode. “That is very attractive to the lender, that they aren’t spec homes that may or may not sell.”

Wisian said that it is important to make sure all parties involved understand the architectural requirements for a project. He said the town didn’t have some things ironed out in advance of the Paradise Park project, and sometimes that held up that process. “Having everything planned up-front is very helpful,” agreed Kermode.

One example of this came up with sprinkler systems. The question of added costs from requiring sprinkler systems was a hurdle with the Paradise Park units and took up weeks in delays as the town council decided how to handle the additional expense. As Kermode reflected, “Obviously, it adds to the cost for the consumer, or in the case of Paradise Park, the town absorbed the cost.”

Scale and density are needed to make a project as affordable as possible, so larger projects with more units can be more cost effective, said the builders.

They advised that the most efficient method for building, despite other market trends, is stick built housing. “By the time you get pre-fab units here, they aren’t really any less expensive. And stick build allows us to use as much local labor as possible, which is another benefit,” says Kermode.

Last, both builders advised that the affordable housing interests have a well done, thought-out RFP [Request for Proposals]. “Frankly, that’s probably why Brush Creek went so sideways. Because the RFP really had no specificity… sometimes it’s beneficial to a developer to tell them exactly what you want,” said Kermode.

Kermode acknowledged that other input from the builders, while ideal, would be difficult to achieve.

“If [private investors] don’t have to pay the cost of the land and can build it into the project, that’s great,” she said. “That can be the case with the land being donated by each of the jurisdictions involved. But we are running out of those options. We need to find a way to start land banking for future projects,” she concluded.

Wisian said he felt the conversation was helpful. “I think the meeting was a great start to furthering discussion on how public/private partnerships can help continue to solve the affordable housing needs in our valley. I am excited to collaborate with the board in the future. My team is excited to get to build more affordable homes for our community,” he said.

“We found it really beneficial to have those two on the call, so we are going to start doing this quarterly,” said Kermode. Next quarter, likely in January, the board will hold discussions with some of the largest affordable housing developers in the state, including Gorman Development, which is finishing a project near Keystone Resort in Summit County.

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