The Crested Butte News Serving the Gunnison Valley since 1999
Dispelling rumors
By Alissa Johnson
The Crested Butte/Mt. Crested Butte Chamber of Commerce hosted a meeting for local business owners last week to discuss the housing situation for the local workforce and dispell rumors. The topic drew a much broader audience than business owners, however, with roughly 40 people filling Town Hall and seeming to be evenly split between business owners, elected officials, government employees, and concerned citizens. Several of them, including business owners, had been affected by the housing shortage.
Michael Yerman, town planner for Crested Butte, and Karl Fulmer, executive director for the Gunnison Valley Regional Housing Authority (RHA), kicked off the meeting by recapping current efforts to create affordable housing and then invited questions and ideas from the public. Despite the hot button nature of the issue, the tenor of the meeting was calm, focused on understanding the lay of the land and coming up with new ideas.
Affordable housing efforts in town
Yerman outlined several housing projects in the town of Crested Butte, including the opening of the Anthracite Place apartments in July and the installation of infrastructure for affordable housing units on blocks 79 and 80. The first lottery for eight lots will be held on June 21, and the town’s goal next year is to build and sell units on some of those lots.
“That makes planning easier for applicants because we can do a conventional loan instead of a construction loan,” Yerman explained. That can bring the down payment as low as 0 to 5 percent instead of the 20 percent required for construction loans. Another idea is to build rental units that business owners can purchase and rent to employees.
Yerman explained that there are currently 210 deed-restricted units in town. When blocks 79, 80 and eventually 76 are built out and the new Anthracite Place apartments come on line, there will be more than 300 deed-restricted units, or 25 percent of the town’s housing stock.
“That’s a pretty impressive number for a really small community. It certainly didn’t happen overnight. There have been a lot of efforts and there are certainly lessons learned,” Yerman said.
“When you are a pioneer and you’re going out to start a program you make mistakes and learn from those mistakes… We’re trying as we go to continue to improve affordable housing,” he continued.
A housing needs assessment is underway, and will better illustrate the need and help secure future funding. The town’s possible upcoming designation as a creative district would enable it to apply for $5 million in workforce housing development through Space to Create, a program funded by the Colorado Creative Industries and the Boettcher Foundation. That could be used to create up to 40 additional units—some of which would be designated for artists—north of the Gas Café, where the town has signed a pre-annexation agreement with Cypress Equities.
The town is also working on enforcing restrictive covenants on accessory dwellings that are not being rented long-term, and possibilities are being explored for the Avalanche Campground near the county shops. The latter could be used to supply workforce camping or long-term camping for visitors to alleviate pressures on local drainages. Finally, a short-term rental committee is looking at ways to regulate vacation rentals by owner.
Affordable housing across the valley
When it comes to the Regional Housing Authority, Fulmer explained that it used to function as a county department that focused more on the south end of the valley. In 2013, it expanded its focus to serve the county, Gunnison, Crested Butte and Mt. Crested Butte, with all four funding the authority.
While it does offer traditional public housing programs like Section 8, the RHA also has a focus of securing more rental properties for the north end of the valley.
“We put together the proposal for Anthracite Place…” Fulmer explained. “It was not overnight. That took two and a half years from when the idea hatched [to completing construction].”
Now the RHA is looking to 2018 to complete an application to fund another project like Anthracite Place, a timeline dictated in part by Colorado Housing and Finance Authority, the state agency that distributes the funds—Anthracite Place needs to be operational for one year before reapplying. And the location of such a project would be influenced by the needs assessment.
This year, Fulmer said, the authority is working on putting together more conventional financing to build 12 to 16 deed-restricted units in 2017 throughout Crested Butte, Mt. Crested Butte and unincorporated parts of the county. The majority of those will be intended for ownership. “If the Housing Authority builds ‘business-owned’ units in Crested Butte, these will be designated for rental to area employees,” Fulmer said.
Challenges with housing projects
Fulmer and Yerman both shared some of the challenges with building affordable housing, namely, the time it takes to get such projects off the ground and the cost. Yerman kicked off the meeting by pointing out that the typical project takes about three years to complete.
“Odds are we could be in another recession before another project was on the ground,” Yerman said.
The town of Crested Butte generates housing funds through a resident-occupied affordable housing fee for new construction. That generates about $130,000 a year, but it would take an estimated $500,000 to $1 million more per year to put a dent in housing needs.
“Funding isn’t coming through a big giant gusher to help us build,” Yerman said.
And while public funding has helped fill that gap, one of the challenges with using public funds is that the federal government limits the income of renters, in the case of Anthracite place limiting it to those who make 60 percent of the annual median income (AMI) or less, which is $28,950 per year or less. The state typically limits it to 80 percent or less, which is $38,500 or less. That prices out people at other income levels who might still have a hard time finding affordable housing.
“We have lot of young professionals who work for the school district or the hospital or the town for that matter who don’t fall under 80 percent AMI but aren’t making enough to buy a house here,” Yerman said.
Ideas and questions from the audience
While most of the audience asked questions, local resident Anne Moore wanted to talk about ways to meet this summer’s housing needs, particularly in light of talk about a worker strike in July to call attention to the lack of housing.
“This housing strike is definitely what brought us all here, so let’s talk about what we’re going to do right now to address these problems,” Moore said.
She suggested that the town incentivize homeowners to rent to locals by giving them a break on property taxes, implement a luxury tax on rentals to raise funds, and allow for a tent city or legalized camping in town.
“Each one of these options by themselves is a little soft, which is why I suggest we do all three and right now. They’re immediate solutions that don’t involve ripping up the ground, spending money or building anything,” Moore said.
Local resident Lisa Merck wanted to know whether summer housing had been secured with Western State Colorado University. Fulmer confirmed that there were four to six three-bedroom units available at Western but discussions were still in the works about price. There seem to be opportunities for more units next summer.
Drew Henry, owner of the Dogwood Cocktail Cabin, wanted to know if the town could put price caps on accessory dwelling units. Yerman confirmed that under state law, it is illegal for the town to implement rent control but other regulations are in place to incentivize renting.
Other constituents asked for further background on the situation: Had the county and municipalities reviewed regulations to encourage the type of development that could alleviate the lack of housing? Given how long it takes to acquire public funding, what are the possibilities for private sector partnerships? Can the income requirements for renters be changed?
While Yerman and Fulmer were both open to the ideas and suggestions, it quickly became clear that there are a lot of forces at work. Income regulations are set by state or federal governments and cannot be changed, and while there are regulations to encourage affordable housing in town, Yerman pointed out that some market forces create disincentives for the private sector to get involved in larger scale projects. The private sector can build at a higher price point and potentially make more money than it could on affordable housing projects.
What business owners see
Business owners in the audience confirmed that housing has had an impact on their businesses. Some offer a higher summer pay rate to help deal with what they called “the crunch” and others have long-term employees who live in Gunnison. A couple of owners indicated that their managers are applying for housing in Anthracite Place and the business owners risk losing them if the employees don’t secure that housing.
Fulmer wanted to know how receptive employees are in general to living in Gunnison. “Ultimately that’s going to be part of the reality because Crested Butte is running out of land. It’s harder to develop up here, it’s much more expensive and transit and housing is down valley,” he said.
Woody Sherwood, owner of Alpine Express, noted that 15 years ago, his mechanical and repair facility was at the north end of the valley because 60 percent to 70 percent of his employees lived there. Now it’s the opposite, and the company moved the facility to Gunnison.
“Gunnison itself is an incredibly different town than it used to be 15 years ago. It has a nice vibe now,” Sherwood said. “It may be that it’s more of family type of transition down there, but every time someone moves to Gunnison… it opens up a place in Crested Butte, so a waterfall opportunity occurs…
“While I understand the pressures of the moment, if you look at the 20-year window we’ve been pretty doggone successful,” Sherwood continued.
By contrast, Monica Mesa of Yoga for the Peaceful said the housing situation makes it hard to keep front-desk staff. “Most of them would rather move back home than move to Gunnison, and one of the main themes I’ve seen is that a lot of them are getting kicked out rapidly because their rental is being vacation-rented,” Mesa said.
Henry made the point that business owners themselves are often affected by the housing situation. When Yerman sought feedback about the idea of building rental units for employers to buy and rent to employees, Henry pointed out that business owners as well might want to live in the units.
Where to go from here
In moving forward, Yerman feels the meeting was extremely valuable. “We were able to get information out to the interested members of the public to make sure there is correct information out there. There is a tremendous amount of value in making sure people understand the true facts,” he told The Crested Butte News.
The town and the county will continue to work on housing projects that are already in the pipeline, and Yerman said discussions are ongoing about new funding sources. The short-term rental committee is discussing a possible tax for affordable housing, and discussions for a regional funding source are also underway.
“Next steps, the town is going to continue to work on all the projects we have slated to go. I think one thing we did hear about was camping. Most of the council was there, so we’ll see if council wants to try to tackle camping this year,” Yerman said.
