Unresolved legal matter with the GVRHA 

By Mark Reaman

The Gunnison Valley Regional Housing Authority (GVRHA) is dealing with the threat of an injunction filed against the organization by the Colorado Real Estate Commission, which comes under the Colorado Department of Regulatory Agencies.

After an anonymous complaint was filed with the commission, the commission members voted unanimously at their April 6 meeting to file an injunction and refer the GVRHA to HUD (Housing and Urban Development). According to the commission meeting minutes, the commission stated that, “from approximately June of 2019 to February of 2021, the respondent acted as the Real Estate Broker on 21 separate transactions on behalf of a Housing Authority without a Colorado Real Estate Broker license. The respondent does not deny brokering the properties on behalf of the Housing Authority but believes they are exempt and plans to continue…”

The GVRHA said they are not aware that an injunction has actually been filed, just that the commission stated the intent to do so.

The Colorado state statute in question governs the division of real estate and licensing procedures and says that, “it is unlawful for any person, firm, partnership, limited liability company, association, or corporation to engage in the business or capacity of real estate broker in this state without first having obtained a license from the commission.” 

GVRHA executive director Jennifer Kermode is not a Colorado licensed real estate agent but has drawn up contracts when dealing with deed-restricted properties. The organization doesn’t believe the statute applies to public officials in the conduct of his or her official duties. The GVRHA charges a two-percent fee with the idea it saves the participants money making the affordable housing properties more affordable. The organization does not believe the statute applies to entities like the GVRHA.

Because the matter is still under legal review, the GVRHA would not go into detail about the situation. In response to a query by the Crested Butte News, the GVRHA sent a statement saying that, “The Division of Real Estate (DRE) has completed an investigation into transactional brokerage activities made by the GVRHA and has determined that there is a possible violation of section 12-10-202 C.R.S. As of this date, there is no formal court action that has been taken by the DRE. It is an unresolved legal matter at this point, thus the GVRHA will refrain from further comment until such time as our legal counsel acknowledges that we should.”

Hiring and retaining employees an increasing challenge

[ By Katherine Nettles ]

Gunnison Valley Hospital is yet another entity within the Gunnison Valley feeling the pain of an affordable housing shortage, even among its employees who are paid the highest wages. In a June 22 meeting with Gunnison County commissioners, GVH CEO Rob Santilli said affordable housing is a growing issue for the local hospital system and poses a challenge to hiring workers at all points on the wage spectrum. The hospital hopes to work out a solution by attaining some master leases for rentals to offer employees in addition to its stock of purchased units. Meanwhile the hospital has a list of several employees in jeopardy of losing their housing in the very near future.

GVH owns 11 townhomes that it uses primarily for transitional housing for employees being recruited to the valley. Three of those townhomes are currently being used by Emergency Medical Services (EMS) staff who are awaiting three new housing units to be delivered to the GVH campus and designed specifically for EMS. Those three units have been delayed in construction by several months due to supply issues. Two of the GVH townhomes are occupied by permanent staff members as well.

Santilli said they have a list of 11 current staff members that are losing their housing and may need to leave their position if they don’t find somewhere new to live soon. “We have reached out to the county and the college in search of more housing leads,” he said.

Santilli said they are hearing about this housing issue even among the highest paid staff, like surgeons. He said he would like the opportunity to get about 10 more master leases as well, rather than just buying more real estate.

GVH’s CFO Mark VanderVeer said there are also 43 open positions within the hospital system (that employs about 400 when fully staffed), or about 10 percent of its workforce. Santilli said that most likely 23 of those employees will be recruited from within the valley and will likely have current housing. “We anticipate 20 of those employees will be recruited from outside the valley and housing will be a critical issue,” he said. “There’s not a person that comes through the interview process for a job that doesn’t get wind that housing is a problem. And they are talking about, is there going to be a subsidy? Is it going to be factored in my pay somehow?”

Santilli said it isn’t just about what people earn, either. “Even a general surgeon we had this year said, ‘you know, I had a realtor when I went around and housing looks like it could be a problem,’” he reported.

“From service worker to surgeon, there is a lack of availability in housing stock, in variety and geographic location” said county commissioner chairperson Jonathan Houck. “One of the top priorities for us is the issue around housing right now.”
Santilli said other hospital systems in mountain towns across the state are having the same issue.

VanderVeer echoed that one of the top concerns consistently expressed by applicants is lack of local housing available. He said the other top question asked is about childcare.

Want these units to “feel like home…”

[ By Mark Reaman ]

In an effort to figure out the best possible configuration of workforce housing units to put on the property in the Slate River subdivision across from the Gas Cafe, Crested Butte officials are engaging with residents to gather their input. The land located at the corner of Sixth and Butte was given to the town as part of the deal with the Aperture annexation and is expected to accommodate 60-80 deed-restricted affordable housing units.

“We want to make this development feel like home,” emphasized town planner Mel Yemma during a work session with the town council on June 21. “It will take out-of-the-box ideas to solve this current housing crisis that is impacting the entire community.”

The town staff used an online app to gather input to questions at the work session much like they did at two previous meetings with local citizens. For example, to the question about what people value about Crested Butte, those at the work session mentioned “culture,” “community,” “home” and “character.” Crested Butte planner Patrick Church said similar responses were garnered at the onsite meeting that drew 27 people.

To get the units built, the town will have to clean up sections of the property that used to be the old dump so that will take some time and money. In a memo to the council, the staff said they plan to continue gathering public input this summer and then develop a so-called master plan for the site. The hope is to present a final plan to the town council in September. A request for proposals from interested developers could be opened in October and building of the project would then take place in a so-called “phased implementation” between 2022 and 2024.

Yemma said a town goal is to have 75 percent of the houses in Crested Butte occupied by year-round residents. It is currently at 65 percent. She said the 60 to 80 additional units that could go at Sixth and Butte will get them close to the 75 percent threshold.

Church said the public feedback so far indicates people initially want a “variety” of housing types on the parcel, from single-family homes to dormitory type units. But when the question focused on what is needed, people agree some density is important.

“A consistent theme is that the people say amenities like adequate storage space, laundry opportunities and being pet-friendly are important,” said Church. “Other amenities brought up include the need for good Wi-Fi, perhaps a co-working space, community gardens and solar and sustainability opportunities. People don’t want a cheaply built project but something that will last.”

Mayor Jim Schmidt said the county swears by the use of geo-thermal to make a project more sustainable and it should be explored. He also said having a pathway to some home ownership opportunities would be a good addition to the plan. That could come through some townhome or condo units being included.

As far as receiving more public input, a community meeting is scheduled for July 14 at 6 p.m. and on the same day an open house will be held from 10 a.m. – 2 p.m. to allow people to stop in and review the preliminary plans. Another council work session on the project is scheduled for July 19. A website specific to the project has been created and ideas and questions can be submitted by people. That website link (crestedbutte.mysocialpinpoint.com – Note there is no www) can be found on the town of Crested Butte webpage. Physical “idea walls” will also be placed throughout town this summer for people to write down their ideas.

“We are seeking robust community engagement to make this project feel like home,” said Yemma. “We are trying to make it easy with people that have different schedules to participate.”

Looking at several possibilites

[ by Mark Reaman ]

From taking “baby steps” to allow some camping in town on private property to enacting a moratorium on issuing short-term rental licenses (see page 1), changing zoning regulations, considering new taxes, hiring a housing specialist and possibly selling some town property to fund housing, the Crested Butte council Monday agreed to several measures that address the Local Disaster Emergency declared over affordable housing in town.

Aside from moving toward a moratorium on issuing any more short-term rental (STR) licenses for the next year, the council agreed to allow RV parking and tent camping on private property in town. Currently the town allows such camping for up to 14 days, but in an effort to provide space for workers living in vehicles or tents, the council agreed to lift the time limit. Staff suggested that a permit be required to ensure the viability of the property for camping, verify the owner’s approval of a camping agreement and make sure that campers are confirmed employees that work in Gunnison County.

Town community development director Troy Russ said the idea was to start with “baby steps by initially limiting it to private property to see what sort of demand there is. It is more manageable with a free camping permit.”

“We would rather see people camping in trucks on private property where they probably have access to a bathroom and maybe a shower than in the town right-of-way,” said planner Patrick Church.

“I’m not sure there is enough private space,” said councilwoman Jasmine Whelan. “Do we have a plan in place if a next step is needed?”

“Not right now,” answered Church. “Determining demand is important. We don’t know the data. This is the most manageable way to start it.”

“We are open to using town rights of way once we know the demand,” said Russ. “If there’s an urgency, we’ll hear it and learn.”

Council agreed to start with the “baby steps” and allow more and longer camping on private property in town but Whelan along with councilmembers Jason MacMillan and Mallika Magner asked staff to start looking at possibly allowing camping on the town’s public property as well.

Looking at new revenue sources to pay for it all
Staff will evaluate a number of fundraising ideas to pay for future affordable housing. Some members want to bring back discussion of a tax on houses not occupied year-round in Crested Butte. Councilman Will Dujardin called it a “community preservation fee” while Schmidt called it the old “empty house tax.”

Schmidt said a mill levy would be more fair given the housing crisis impact on all business and citizens but said trying to get such a tax issue on the upcoming fall ballot would take very quick action and be competing with the school district and fire district which are also proposing mill levy increases.

Magner suggested a Telluride model that used bonding to raise significant money for housing. That too would take a vote of the people.

Town manager Dara MacDonald said the staff could “dust off” a previous report compiled to look at a variety of funding mechanisms for housing.

Staff also proposed looking at town property and evaluating whether it made more sense to sell some of it on the free market to raise funds for housing. Schmidt suggested some of the property might be better utilized being repurposed to housing.

Hire a housing expert
Council had approved the idea and the budget to hire a planner who specializes in housing issues in 2022. But given the housing crisis, the staff is suggesting they move that up and immediately start advertising for a housing expert. The idea is to perhaps coordinate with the town of Mt. Crested Butte to pay for the position. No salary has been discussed but the hope is that someone who has experience developing projects could enter the local administrations.

Change the code
Council agreed to allow staff to make changes to the municipal code that facilitates housing opportunities, including making appropriate zoning changes to allow workers to live in the Ruby Bed and Breakfast since the town has the space under contract. Other changes include reducing the number of parking spaces required for studio and one-bedroom units, changing some definitions to ensure people can have roommates and non-family rental situations and modifying the Resident Occupied Affordable Housing (ROAH) fees.

Long-term projects in the works, but short-term solutions needed

[ By Kendra Walker ]

The Crested Butte Center for the Arts’ Steddy Theatre was filled with more than 150 community members last Wednesday to share their housing concerns, offer ideas and hear from local representatives working on affordable housing projects and solutions in the valley.

The housing forum, also broadcast by KBUT and moderated by Chad Reich, included a panel of valley partners, including Town of Crested Butte community development director Troy Russ, Town of Mt. Crested Butte town manager Isa Reeb, Gunnison Valley Regional Housing Authority (GVRHA) executive director Jennifer Kermode, Gunnison County community and economic development director Cathie Pagano and Gunnison community development director Anton Sinkewich.

All panelists agreed that the lack of housing for locals is a community-wide issue and has affected every part of the community’s demographics and economy – from restaurants and retail, to healthcare and schools. “It touches everything from the lowest income service work to the highest income profession work,” said Sinkewich.

“Housing has been a priority of the Town of Crested Butte since the ‘80s,” said Russ. “When you’re living in paradise there’s a high demand to live here. But there’s an imbalance of demand and supply. It’s almost impossible to keep up. The Town of Crested Butte with our partners have been doing a lot of regional planning with projects that are coming online.”

Russ explained that the town has declared a housing emergency, which will allow the town to bypass and speed up certain processes within the town’s ordinances. The town is under contract to purchase the former Ruby Bed and Breakfast for $2.3 million to house seasonal workers or locals in housing transition. The town is also working on its Community Compass, which will provide a framework for decision making on community needs moving forward, and looking into an in-deed program, which would allow the town to buy deed restrictions on existing structures.

In Mt. CB, “we do have 77 existing deed restricted units in town,” said Reeb. The town also has 22 units of the Homestead project under construction, expected for completion by the end of this year. However, all existing units and the Homestead units have already been claimed and nothing is currently for sale. The town is also working on its Master Plan, which is aimed to identify needed housing and community essentials.

As far as the county goes, “It’s been a goal since 2016 to build new affordable housing units,” said Pagano. She said the county will have 200 new workforce housing units by the end of 2022. “We are really committed to finding meaningful housing solutions for our neighbors.”

Sinkewich explained that the 76-unit Paintbrush project in Gunnison is currently underway and construction for the Lazy K project is launching this month, which will include 44 owner-occupied affordable units and 21 market rate units. The future Gunnison Rising project has potential for 1,700 total units, with 200 affordable housing units. “The infrastructure work will begin in its first phase later this summer,” he said.

The GVRHA is not a developer, said Kermode, but it works with partner agencies with development and affordable housing opportunities, deed monitoring and in some cases, acts as a property manager. The GVRHA also works to make sure deed restriction regulations are being met.

Based on the GVRHA’s recent 2021 Housing Market Needs Assessment, Kermode said the valley needs 960 units to get us through 2026. Kermode noted that even though 240 affordable units have been added to the housing supply since the last study was conducted in 2016, the valley is pretty much at the same point. “We’re like the hamster on the wheel that just keeps getting bigger and bigger. We’re not catching up with what the demand really is,” she said.

Public opens up with personal experiences
Reich invited the public to ask questions, share their own personal stories and offer up ideas for housing solutions.
Lauren O’Rourke, born and raised here, shared that she and her son have lived in nine different houses since she moved back here six years ago, including one of the one-bedroom affordable units in Stallion Park. “The guy that bought it for $60,000 sold it for $260,000,” she said. “Because somebody foreclosed on that, that deed restriction got lifted. It seems like the rules consistently change… How do we stop that from happening? How do we protect that because that’s what they were built to be. It just doesn’t make sense.”

“Those [Stallion Park units] went into foreclosure during the recession so to get them out of foreclosure, you have to buy them and you have to have the money to do that,” explained Pagano. “We had enough money to buy some but 32 units, no. It’s a hard discussion; it’s a hard decision. That’s part of the complexity of it.”

“We do have systems and methods in place where we get notified when a property has a foreclosure notice filed against it,” said Kermode. “We’re all extremely committed to never terminating a deed restriction unless there’s no other choice, and sometimes that will happen.”

What to do about STRs?
Many attendees asked for more focus on non-building options that could help with short-term solutions, such as considering giving a tax break for those that rent their Accessory Dwelling Units (ADU) to locals. “I’d like to see a shift in conversation to incentivize the people that live here to work here,” said Beth Goldstone. “If you develop more and build more, more people will come.”

Another idea was to reduce the transfer tax and eliminate down payments on deed restricted homes. “We received a grant from the state and we’re going to be able to provide down payment assistance,” said Kermode of a new program the GVRHA expects to implement by the end of the month.

A local named Connor shared that his home was recently sold to become an Airbnb. “Right now I’m living in a camper. Is there a way we can balance vacation rentals with long-term rentals and find some way to fill those?”

Russ said the town of Crested Butte has capped short-term rentals (STR) at 212 units. “Through our licensing process we can be more aggressive to make sure they’re more code-compliant…we can set up the framework to the [Community] Compass and follow due process to fix the market.”

“We are at the 212 limit,” said Reich. “Why do I keep hearing of people getting kicked out of their home?”

“We are one square mile,” explained Russ. “They may be doing it somewhere else in the county.” Gunnison County, Mt. CB and Gunnison do not currently have an STR cap, but all representatives said that was something they could take back to their councils. Reeb shared that Mt. CB is also currently working on an annual assessment of their STR licensing regulations.

Secret Stash and Bonez owner Kyleena Falzone said she owns a triplex that she rents out long-term to locals, as well as several properties she short-term rents. “I do put employees in there in the off-season…but I would have to charge $5,400 a month to be able to pay the mortgage and the property taxes,” she said. “I can’t cover the mortgage on the building if I don’t short-term rent it. How do you incentivize the short-term?”

Camping
Many attendees expressed their concerns about camping no longer being a reliable option based on the new designated camping regulations in place to alleviate the backcountry crowds and misuse.

“The community has done a wonderful job of preserving the open space. We’ve limited the supply of housing, is there a way to use conserved land for housing?” asked Reich.

“We never intended to do this at the expense of what makes this place great,” said Russ.

Reich suggested that the Avalanche Park and Brush Creek parcels that are currently sitting empty could be temporarily used for camping while the town plans for those properties’ long-term purpose. Several others urged representatives to allow camping in town, perhaps coordinating with the CBCS for use of its shower facilities.

“We have a very lonely tent site and we would like people to visit it,” said Reeb. The town of Mt. CB has a 26-tent camping site, with a porta potty, trash and recycling. Currently, the town does not allow car camping, but Reeb said the town would look into possibly changing this.

Falzone suggested that local workers should be able to get a special permit to camp.

“The fact that we’re talking about people having to camp to live in town is absurd,” said Ben Wright. “I’m working five jobs…I haven’t even been mountain biking this summer…my quality of life has gone down the tubes. I’ve been here almost 20 years. As an hourly wage earner I’ve only been able to save $40,000 for a condo just to be priced out. Is it even worth living here anymore? We don’t want to live in tents. How long does it take for a second home sale to get approved versus how long it takes an affordable house to get approved? You have to get these second homeowners and these people moving here right now to invest in the community.”

“Why aren’t we looking at rezoning the land that we already have?” said Amanda Fuhrman, suggesting the lot next to Ace Hardware.

“The Town of Crested Butte can rezone,” said Russ. “That’s exactly what the Compass can do. Changing zoning is not an overnight thing. We are committed to starting that September 22 and 23 in this room. That’s where we can effectively change the zoning.” Russ invited everyone to show up in September to offer feedback for the Community Compass discussion.

“The county is absolutely willing to explore all options,” said Pagano. “We need your voices at the table too.”

#HousingShortage
“There’s a lot of advertising for this valley. People know how to get here. But I don’t see responsible advertising and responsible education,” said restaurant server Martha Keene, referencing the Tourism and Prosperity Partnership’s (TAPP) marketing to visitors and remote workers to move here.

“[Visitors] have no idea what is going on because all they’re seeing is rainbows and pretty pictures and they’re not getting the reality of what they’re traveling here for… You’re getting the people here no problem. We’re not telling them what to expect when they get here.”

“Last year was crazy,” said Pagano, noting the influx of new and inexperienced campers. “We do really want to help educate them and TAPP has been supportive of that.”

“I’m waiting on so many people who have no idea, saying ‘I thought you guys opened, I thought you hit your herd immunity,’” said Keene. “We get people to come here and we kind of fool them a little bit because the waits are so long and they don’t want to come back, but why aren’t we trying to cultivate a wonderful experience?”

“I hear you, Martha, and I’d be happy to pass that on to John Norton (TAPP executive director),” said Pagano.

“I think second homeowners and tourists really do want to help,” commented Alex Richland. “Has there been any discussion on how we can get the private sector involved? If given the opportunity a lot of second homeowners and tourists would help, they’d want to donate and enjoy their time here.”

“Personally, I’d love to get it in the works,” said Kermode. “I haven’t thought about the best way to approach second homeowners yet. They’re approachable and I think we should do it.”

“Hopefully the emergency declaration can raise awareness,” said Russ.

“What we have here is a very simple economics problem based on supply and demand. We’ve all acknowledged there’s no affordable housing,” said Joel Benisch. “Especially the government entities…I implore you to please look at every tool of that nature that you have in our toolboxes that give you the opportunity to cut through or go around all the bureaucratic steps…to get those 900 units by 2026.”

“Things have been tense, we’ve all been tourists somewhere. Let’s be kind,” said the local camper named Connor. “We’re going through growing pains and how we deal with these growing pains will form the future of Crested Butte.”

The audience was encouraged to continue showing up to town and county meetings with input and ideas on affordable housing. The Town of Crested Butte is holding an in-person meeting on June 17 at 6 p.m. at the corner of Sixth and Butte to discuss the Sixth and Butte Workforce Housing Plan.

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.

Emergency declaration in effect 

By Mark Reaman

The Crested Butte town council on Monday engaged in a flurry of activity to address the affordable housing shortage in the valley. Over the course of the regular town council meeting the council spent millions of dollars, began the process of tweaking zoning regulations, declared an official “emergency” over the situation and indicated they aren’t finished taking action.

In an effort to address a missing piece in its affordable housing portfolio, the council announced they have put the former Ruby Bed and Breakfast building under contract for $2.3 million to potentially house seasonal or transitional workers. The deal is slated to close July 1. Council also agreed to move ahead with relocating a house slated for demolition to the Paradise Park neighborhood to be used as a rental home for a town employee and also officially declared the local housing situation a “local disaster emergency.”

That declaration should ultimately help get the former B & B up and running as a place for seasonal workers since a number of town regulations must be adjusted in order to move people in. Those include amending the rules inside the T-zone (Tourist-Zone) where the building is located to adjust the income limits on long-term affordable housing and reduce current parking minimums. Deed restricted housing at or below 80-percent AMI (Area Median Income) is allowed in the T-zone as a conditional use.  Staff recommended adjusting the qualifying AMI to make sure seasonal employees wouldn’t make too much money under current town rules to live in the Ruby.

The emergency declaration should speed that process. 

“It is a lot of money,” said town manager Dara MacDonald as the discussion over the purchase began.

“It’s half the price of a fancy home in town,” noted town finance director Rob Zillioux who said the appraisal came in at the selling price.

MacDonald reminded the council that the town has been unable to fill the positions for six seasonal summer workers this year largely due to housing limitations. On top of that, she said that it is common knowledge that local businesses are having difficulty filling staffing positions for the same reason. “We see this as being an incentive for workers in the future,” she said.

According to a report to the council from Zillioux, the 3,300-square-foot building has six bedrooms, each with a private bathroom. One of the bedrooms is larger and considered a “suite.” The property includes generous common living areas, a large kitchen, an industrial washer and dryer, a manicured yard and storage area for skis and bikes. It comes fully furnished.

“It is located on Gothic Avenue in the T-zone so we need to work on some zoning issues to allow it,” Zillioux said. Under current T-zone regulation some deed-restricted housing can be permitted as a conditional use. With seven parking spaces, there is also not sufficient parking under town rules that require two parking space minimum per rental unit. 

“Under the emergency declaration passed tonight we could authorize suspension of some parking provisions to get some people in there,” MacDonald said. The expectation is that the rooms could start to be rented by mid-July.

Staff is also seeking approval to change the regulations to allow adding public sector employee households, regardless of AMI, as a conditional use in the T-zone. Any permanent changes to zoning or parking regulations would be reviewed at public meetings by both BOZAR and the Town Council.

“Ideally this will be used for seasonal workers employed by the town,” emphasized Zillioux. “It might also be used for some transitional housing. We have some flexibility. The urgency now is to acquire this rare property for town’s affordable housing stock. We’re ready to go and it will come in at about $700 per square foot. Newer houses are going for more than $1,000 a square foot.”

MacDonald said staff is reviewing the leases used by Telluride for its boarding house accommodations as a template for Crested Butte leases in this property.

The funds for the purchase that also includes $50,000 for things like an inspection and legal costs, will come from the affordable housing budget along with money from the town’s capital budget. Before the purchase, the affordable housing fund had $866,323 in the bank. The council voted unanimously to move forward with the purchase and adjustments to town regulations.

Emergency!

As for the emergency declaration, the idea is that the action will basically grant powers to suspend provisions of the town’s Municipal Code that might delay necessary action coping with the housing emergency. It could also allow the town to waive provisions for competitive bidding when dealing with housing, transfer town personnel and departments for the purpose of facilitating emergency services and make provisions for the availability and use of temporary emergency housing. 

In a memo to council from community development director Troy Russ, he said the “emergency resolution allows the town to take more immediate actions to address this housing crisis.”

He said the housing crunch was happening in many places and given the history of places like Aspen, it is evident the town “can’t build its way out of this. People want to move here and the pandemic accelerated that. This declaration positions us for grants and the state and federal level and also increases awareness. We don’t see a negative to this. It is a way to get us to the front of the line in some cases.”

Bring in Vogy’s house movers 

Meanwhile council agreed to continue moving ahead with relocating the “Haney House” from 20 Third Street to a town-owned lot in Paradise Park. An architectural review of the structure has estimated it will cost between $355,500 and $425,900 to relocate and improve the structure. The house is 1,317 square feet with three bedrooms and three bathrooms. Staff believes the project will come in well below the market cost of building a new home.

“It is a quirky house that is a better rental than a for-sale property,” said Russ. “Ideally we will get people in the relocated house by the end of the year with town employees being the priority.”

Big Al hopping in

In the affordable housing realm, Ali Fuchs of Big Al’s Bicycle Heaven asked the town to consider creating a new category for land use titled “employee dwellings.” She plans to expand the building she owns on Elk Avenue and hopes to construct two one-bedroom apartments in conjunction with the construction. But she wants the town to change its code to require only one parking spot per apartment instead of the current minimum of two. That will take an amendment to the town zoning code as it applies to the B-1 and B-3 business districts. 

“I think it will benefit my business, the town and the current housing situation,” she noted. “I hire between 10-15 employees when I can, but having housing will make it easier.”

Council agreed to the next step of having the Board of Zoning and Architectural Review (BOZAR) review the request which will then come back to council for approval. If that happens, Fuchs can make a formal application to BOZAR for the building expansion.

And finally…Slate River housing meetings

Staff reminded council that public meetings have been set up to gather public input on what sort of affordable housing should be constructed in the Slate River subdivision at the corner of Sixth and Butte. The location for deed-restricted housing was part of the agreement with the developers of the Aperture subdivision. The hope is to construct between 60-70 affordable housing units.

The “listening sessions” are scheduled for Tuesday, June 15 at 6 p.m. on Zoom or people can meet at the site on Thursday, June 17 at 6 p.m. to share ideas.

When new councilmember Jasmine Whelan asked if the town had considered buying the old Crested Butte Hostel for housing the staff said they knew it was on the market but couldn’t really say anything else about the property. “We can talk about that off-line,” suggested MacDonald. 

The housing issue is on pretty much everyone’s mind at the moment and rightfully so. With three actual “For Rents” in the newspaper classifieds section next to four pages of “Employment” ads, it is no secret there is a problem.

As Crested Butte has transitioned to a higher-end resort town, the old rentals are disappearing thus moving workers down valley and away from service jobs. Despite the wishes of some, everyone is not entitled to a low-cost three bedroom, two-bath house with a yard for the dog in the quietest neighborhood of Crested Butte — even though there are such houses available to some lucky qualifying worker families. But few would dispute that it is best on almost every count to have workers live near their jobs and be an active part of a vibrant community. Hence the current tension as that is more and more rare given economic realities of an increasingly attractive resort town.

While there are more people living in Crested Butte and the north valley than ever, the recent residents have no need to participate in the service industry workforce. As I wrote a few weeks ago, the community has morphed from a labor market to a housing market and that has made affordable housing really hard to find while leaving jobs open everywhere.

The good news is that in the last couple weeks, there has been a cross section of the community pondering the issue. The young people who want to live and work in Crested Butte are brainstorming ideas that culminated in a meeting at a local business. I know of second homeowners that are brainstorming ideas as well. They are looking at it from a traditional business/market perspective and figuring out what steps are necessary to seriously address the issue. Both groups seem to feel a hard reckoning is needed that will culminate in difficult philosophical decisions if the community wants to change the current path.

There are a few factors that people don’t seem to want to voice at the moment. One thing to keep in mind is that the issue impacts different demographics in different ways. It’s not just about you and your friends. The working family with two kids in school has different needs than the 25-year-old taking a gap year to be a lift op.

Again, there are more people living in CB and the north valley than ever before, so the problem isn’t one of the town being hollowed out by second homes. It’s just that new transplants can make enough money outside the tourism business to not need to work in the valley. The former cheap rentals that were drafty with no foundations have been renovated to nice modern residences with good Internet. That leaves the traditional ‘ski bums’ out in the cold.

The CB town council chose to take the Avalanche Park property it owns just south of Crested Butte and put a solar farm on the land. That is an admirable choice but a choice nonetheless. There had been talk of making it a campground and I would argue it might have been a good spot for a summer worker’s campground. But that would have taken significant investment in road improvements, water and sewer access, even if temporary, through trailers and manpower to oversee the camp. Is there another similar spot? It is worth considering.

Local public land managers are struggling with an overflow of tourist campers coming to visit, so new regulations have been imposed to mitigate the swarm and their impact on the local backcountry. Good move. But that has resulted in cracking down on what used to be a group of workers that lived in tents and campers near Crested Butte so they could save money with little or no rent. Again, it is a valid choice that addresses one problem while impacting another.

The Biden administration has continued to bolster state unemployment benefits to the tune of $300/week on top of Colorado’s $600 at the top end. There are some people living here that did the math and figured earning $900/week on the dole was a pretty good deal. Pulling in $3,600 month to ride your bike is indeed a good deal and one I certainly would consider (but probably get bored with). But that choice is bringing real world ramifications to the business community. So is the fact some longtime workers living in workforce housing are now retired and not working.

In the heat of the crisis there seems to be a movement by many to just “do something” and build as much housing for workers as possible as soon as possible. While understandable, there needs to be some strategic thinking involved. The Corner at Brush Creek deal didn’t fall apart just because of the size of the parking lot or the friction between the developer and some local politicians even though both played a role. The two town councils brought up the real impacts of putting 800, 600, 500 new people on that parcel. The concerns included that an already overcrowded CB school would be overwhelmed even more and not only would things like traffic grow exponentially, but learning would be hurt by crowded classrooms. The idea of not enough park space, trail congestion, parking problems, a traffic light or roundabout also came into play. Taking action to address one critical issue has major ripple effects on the other major issues facing a small town.

The same simple idea of turning what is designated as ‘wetland’ behind CBCS into a major 15-building apartment complex applies as well. Of course, we can go all stereotypical developer and dry up whatever we want but not only would that be a major diversion from the environmental ethic of the community it would add how much more traffic to the school area? Talk about a cluster. In the same vein, some advocate for allowing rule changes in town that permit super dense developments and, say, five or six story buildings. That would certainly help the housing issue but understand it would impact much of what we all like as a unique part of a small town. Hello Breckenridge. It’s about choices.

Many also advocate reallocating tax money that ultimately goes to TAPP to market the valley to housing projects. The same has been said of the Crested Butte real estate transfer tax (RETT). The problem there is that the Local Marketing District money is limited in its use by state statute and is prohibited from being used for capital housing projects. The CB RETT is in a similar boat with half specifically designated for open space projects outside of town and the other half for the general capital fund in town. So there is opportunity to use some of the money (the general capital money) for housing projects but designating the entire RETT to housing would put the current revenue source into legal jeopardy under Colorado’s TABOR (Taxpayer’s Bill of Rights) legislations that prohibits any more RETTs.

Many people, even those that are antigovernment, look at the local government to solve the problem. And I believe local officials have taken much responsibility and deserve kudos for actively dealing with the issue. There are hundreds of deed-restricted units in this valley. But what responsibility for employee housing do local employers have? Especially the major employers like Vail Resorts? There has been some business participation is housing mitigation efforts, but should the bulk of the responsibility be on the towns and county?

These are just a few of the uncomfortable realities of addressing the local housing issue. That’s not to say there isn’t opportunity. Good people are actively mulling over possible ways to address the problem. Who knows what will emerge…

Some things to possibly throw in the mix is using the county’s Whetstone property for high density workforce housing but utilizing the Corner at Brush Creek land for a new school expansion (maybe the CBCS middle or high school?) that includes fields and housing for teachers surrounding those fields. The Valley Housing Fund might organize a non-profit or as suggested by a community member a couple weeks ago, a for-profit entity that provides a place for second homeowners that want to invest and contribute to helping solve the local housing issue. They understand the serious situation of seeing their favorite restaurant not being open this summer because of the labor shortage and are probably willing to help. They just need a mechanism to do so. Give them one.

I understand the emotional aspect of the issue and it is valid but it won’t solve the problem. To move toward real solutions will take real strategic thinking and an honest look at the path needed to get there. That won’t be easy. I just hope something really weird and impactful comes out of it so it reflects this unique community.

—Mark Reaman

While on the road trip these past couple of weeks, it became increasingly obvious that Crested Butte is not the only place dealing with rapid change. Most of the other nice places are as well and in conversations with people, similar issues are present. Housing prices are skyrocketing, businesses are finding it hard to get employees, and employees cannot afford to live where they work. Of course, there are always the not so nice places where housing is cheap and so are wages. Austin, Nevada anyone?

But I want to keep living in our valley in a real mountain community. I have purposely not checked in on much news while away, but I did see a lengthy Facebook chain about people worried and upset (as usual this time of year) about finding housing.

Before we left, a friend put forth a theory from another friend of his (a lawyer with many decades of experience dealing with Colorado mountain town land issues) that CB and other resort towns like ours have transitioned from an economy that is primarily a “labor market” to one that is primarily a “housing market.” In the old days, the town existed because laborers were needed to work the mines and to serve the miners. And then laborers were needed to serve the tourists. Now, the economy is driven primarily by housing. We still have tourists and businesses, but we have become a housing market first and foremost. What this means is that many people invest in the housing market but, for a number of reasons, have no intention of starting a local business or working in one, because they work elsewhere even if they live here (high-speed Internet), are here part-time or are retired. They are invested in the housing market, but not in the labor market.

That reality, which we cannot change, results in high housing prices, empty homes and lack of workers because those who need to make money to live here can’t make enough money to do so, given the tremendous infusion of capital into the housing market. As a result, the theory goes that the only way to afford a home here is to bring in capital from elsewhere. You just can’t make enough money here to do it. So, my friend postulates that “we may not be able to ‘fix’ this, if by fixing it we mean rebalancing things in such a way that locals who are part of the working human capital of the town and the valley can earn enough to afford to live here, buy a home, raise a family and so on. And the reason we can’t fix it is that our housing is simply too attractive to wealthy people who do not participate directly in our labor market, either as owners or as workers. Of course, the recent arrivals patronize local business, and many give very generously to local causes and participate in the life of the town in all sorts of positive ways, but their jobs and businesses are elsewhere, and that is where their entrepreneurial creativity and wealth-creation are taking place, not here. It’s not their fault in any way—it’s just the way things work now.”

To address the trend, my friend’s idea is not so much to fall back on the “tax the second homeowners” idea, or to continue to emphasize only philanthropic giving, affordable housing and deed restrictions (all useful ideas), but rather also to encourage and inspire those investing in our housing market to also invest directly in our labor market. Many who have second homes here do that in a sense already by generously supporting the non-profits in the valley, so there is a pattern in place. Instead of setting up another charity, however, his idea would be to create a for-profit vehicle whereby those with financial capital can also invest in local human capital. Call it “The Crested Butte Business Investment Fund”—think “CB Shark Tank” or a larger ICELab. Investors would buy into an enterprise to which local businesses would then apply for funding their businesses. The new fund would essentially be a small venture-capital enterprise. Local businesses would pitch a return on investment if the fund supported them with start-up or growth and innovation resources. This would then, in turn, serve the community by creating successful businesses that in turn create good jobs.

A CBBIF wouldn’t make it possible for local owners and employees to purchase the new norm of $4 million single family homes, but it could make it that much more likely they would get into some kind of local housing. The businesses would be that much more likely to be able to hire local workers and thus be able to turn a profit, and the second homeowners or new residents would then get businesses that are open because they have workers. The workers would get a roof over their heads and the opportunity to live in a really good place. And our new full and part-time residents would be able to put their skills and dollars to work in a way that draws on their experience with creating prosperity.

CBBIF. CB Shark Tank. This kind of free market idea might interest the new wave, successful people with capital who want to live or spend time here, providing a meaningful way to support the place they have come to love and integrating them into the community. The local governments can help with land or grants, with support for non-profits and appropriate taxation and deed restrictions, all of which have their place, but having a for-profit community-based investment fund might also help to make the affordability problem a bit more affordable. As my friend asked, “Is it pie in the sky? Perhaps. And if actually successful, such initiatives would inevitably lead to further growth, in a cycle we have been watching in western ski towns for many decades. Still, since this growth is unavoidable, such a program—that I’ve never seen in a town like ours—might foster a more community-based kind of development than we see when the housing market overwhelms everything else.”

Being on the road lends itself to thought and perspective. I am not sure if such an idea would really work but I do know we aren’t the only community dealing with the issue. I also know this community used to rebel against the normal way of doing things and endeavored to try out-of-the-box ideas. This might qualify as such an idea…and I would think the local planners and housing experts could determine pretty quickly if it would work.

Planners from the county and municipalities have been meeting monthly to set a housing direction. There are opportunities with land at both ends of the valley. Housing is top of mind for pretty much every elected official in the valley. I would expect to see more units available sometime in 2022. There is movement.

Anyway, it certainly is something to think about. Which is a perfect thing to do on a road trip…but then it becomes time for tangible action.

—Mark Reaman

Addressing both housing affordability and climate issues

[ by Mark Reaman ]

Starting in February, owners of deed-restricted homes in Crested Butte will be able to apply to receive a heavily subsidized energy assessment and energy efficiency upgrade for their houses. This should help lower living costs and make residing in Crested Butte more affordable for those in deed-restricted homes.

The town and Gunnison Valley Regional Housing Authority, through its GV-HEAT program, are forming a partnership to help pick up most of the cost, making deed-restricted houses more efficient, affordable and safe.

The Crested Butte Town Council on Monday, January 4, agreed to contribute $30,000 toward what is being called the GreenDeed program. That is expected to be the amount allocated annually for the next five years and address approximately seven structures per year.

In a memo to the town council, Crested Butte planner Mel Yemma said the program addresses council goals in both the climate action plan and the affordable housing initiatives. The subsidies will be available for current deed-restricted homes in town and to those that might eventually participate in a future InDeed program, where owners of free market homes agree to put a deed restriction on their property for a negotiated price.

“Annually, the GreenDeed program will cover assessment costs and full energy efficiency upgrades for up to seven deed- restricted homes within the town of Crested Butte, on a first-come, first-served basis,” Yemma’s memo explains.

She estimated that while the initial assessment would cost about $350, the upgrades could cost in the $3,000 to $4,000 range. Homeowners would have to supply a $50 application fee to encourage buy-in and establish commitment, but other costs of the upgrades up to $5,000 would be handled by the town program.

GV-HEAT has committed to provide a $1,000 matching contribution to each home (up to seven homes) as part of their annual funding award from the Gunnison County Electric Association and Tri-State Energy.

“Overall, this program is a great opportunity to make significant headway on increasing energy efficiency in our existing building stock, while simultaneously making participating homes more comfortable and less expensive,” Yemma said. It is estimated that through the program a home could achieve a 10 percent to 20 percent energy use improvement.

The program will start this year with homes inside Crested Butte but the hope is to expand the program regionally. The town of Crested Butte will begin accepting applications on February 1.