Housing Needs Assessment update paints dark picture

County is hundreds of units short

[ By Mark Reaman ]

An official update of the 2016 Gunnison Valley Housing Market Needs Assessment was released recently and it includes no real surprises. The key takeaways include: Employers in the county are struggling to find employees and employees are struggling to find housing; the COVID-19 pandemic added momentum to trends already taking place with people from other areas moving here and buying houses; the gap between housing needs and market prices has worsened; the number of housing units needed to find balance remains high; and the community needs increased momentum for local housing solutions.

Gunnison Valley Regional Housing Authority executive director Jennifer Kermode described the update as full of information but “gloomy.”

“Unfortunately, we’re not surprised at the information contained in the update,” she said. “Anecdotally, we were looking around the county and saying, “Things have gotten worse,” but it’s helpful to have the data that tells us how bad things really are. The report gives us a clearer picture of what kind of housing we need and where we need it. The update is a valuable tool in planning and in hopefully finding dollars to help bridge the financial gaps in development.”

The 2021 report was compiled by the Williford/Rees group that also conducted the 2016 study. The first key finding in the update is that, “Employers currently have heightened concern about attracting and retaining qualified employees compared to 2016, and a growing awareness of the strong correlation between housing problems and unfilled jobs. In 2016, 69 percent of employers felt housing attainably priced for their employees was, “the most critical” or “one of the more serious” factors affecting the economy. In 2021, this rose to 90 percent of employers.”

The report states that employers have increased the ways they are assisting employees with housing including providing higher wages compared to other areas, master leasing housing units and renting them to employees, and providing assistance with relocation.

One indicator confirming the data in the report is that the newest affordable housing project coming online in Gunnison has hundreds of people hoping to get an apartment. The Gatesco developers are finishing up the Paintbrush complex near the Gunnison Recreation Center. According to Gary Gates, 12 units will be ready for occupancy in late July and another 48 in August. More than 300 applicants are hoping to qualify and get one of the units.

The Zoom Boom impact
The pandemic has apparently had a major role in the most recent housing situation as people discovered they could move to nice places and do their work from home. The reports states that “A desire to live in an amenity rich location and the ability or requirement to work remotely has driven increased investment in real estate from households with assets and income from outside the Gunnison Valley. The strong reputation of the local school district and commitment to in-person learning drew additional families with school age children to the valley for full time residency.”

As for locals who work in the valley, the affordability of building a house is disappearing. The report indicates that, “The gap between the cost of construction and price points attainable to locals is increasing. Private sector developers struggle to increase supply with rising construction costs for both materials and labor, necessitating outside subsidies and/or participation from local jurisdictions to make attainable housing feasible.”

The same situation applies to for-sale properties. The report notes that there are only 10 listings available for households making below the 200-percent AMI (an annual income of $110,800 for a single person or $158,200 for a family of four). In 2016 there were 62 such listings. In the South Valley there are only four listings for households below 200-percent AMI, about 18 percent of all listings. These listings include two condos, a townhouse and a single-family home built in 1960. In 2016, about half of South Valley listings were affordable to households below 200-percent AMI.

The big squeeze
“The picture is equally grim for renters,” the report reads. “Nearly half of households that rent in the North Valley have incomes below 80-percent AMI, yet there were only three apartments listed with rental rates that would be affordable for them between January and March this year. In the South Valley, 70-percent of renter households have incomes below 80-percent AMI and only six units were affordable to these households over the same three-month period.”

Even with hundreds of deed-restricted units coming on the market in the last four years, the number of needed units for people living and working in the valley remains high.

“The 2016 assessment identified a need of approximately 960 housing units by 2020 inclusive of homes that the free market will provide and units that require subsidies, incentives and/or are mandates to build. Since 2016, there has been a great deal of time, money and dedication toward building deed restricted units, yet at the same time, increasing prices, construction costs and amenity migration have put additional pressure on housing for the local workforce. These dynamics result in a total estimate of new homes needed by 2026 similar to the prior report – just under 1,000 … Projecting housing need as the economy rebounds from COVID is challenging, yet it is estimated that at least an additional 470 units are needed to keep up with job growth through 2026.” The report came up with the number of 960 units being needed between rentals and ownership to close the need gap by 2026.

“While we hoped that the 240 units added in Gunnison County since 2016 would have made a dent in the longer term view, I don’t think any of my staff or the GVRHA Board was shocked by the new numbers,” Kermode noted.

There’s always a big winter…
While the real estate market is red hot at the moment, few expect it to maintain its current pace. Like many locals, the update predicts that a couple of what used to be typical winters might open up the market.

“While there are no signs yet of the market softening, realtors in both ends of the valley expect that many of the newcomers to the Gunnison Valley will move away within a few years. The lack of conveniences, restaurants and nightlife was not an issue in 2020 with COVID restrictions in place everywhere but, over time, the lure of urban opportunities will likely cause many to leave the Gunnison Valley,” the report concludes. “Shifts in the way that businesses operate, however, will likely provide continued opportunities for employees to work remotely. Those who prefer the rural mountain lifestyle will be able to stay and enjoy it. After the ability to work remotely, the single biggest factor likely to impact the extent to which newcomers settle in the Gunnison Valley will be the severity of winters. For now, there is still strong confidence in the market. Price softening in the for-sale market is not expected soon.”

The report makes clear that “When 2020 Census data is released, additional analysis of the valley’s demographics and housing inventory will be completed relative to 2016.”

In the meantime, there are several housing projects on the drawing board in the construction phase. “The Paintbrush Neighborhood in the city of Gunnison will be the first to put homes on line this summer with the Lazy K Neighborhood projected to have up to 15 homes available for sale before the end of the year,” Kermode said. “The Mt. CB Homestead Neighborhood should finish completion of 22 for-sale townhomes by the end of 2021 and into 2022. Crested Butte will be adding about 13 homes in the Paradise Park neighborhood, which could realistically be ready for occupancy starting in late 2022. The county’s Whetstone parcel and the Slate River Annexation in the north end of the valley will add close to 300 homes when they’re done, but that won’t be for at least a year or two because building takes time.”

Gloomy indeed. The full update can be seen on the Gunnison Valley Regional Housing Authority website.