Colorado's mountain communities fight to retain workers as locals become more expensive

To address the housing shortage caused by second-home and remote workers, communities are looking for innovative solutions, such as lease limits and new taxes.

Colorado's mountain communities fight to retain workers as locals become more expensive

TELLURIDE (Colo.) -- Telluride is a small canyon that's surrounded by 13,000 foot peaks. Telluride appeals to both vacationers and adventure seekers. As the Covid-19 pandemic continues, a new balance has been established. Long-time residents have been forced to leave as remote workers from out-of-town move in.

Silverton is a remote community in southern Colorado. Workers live in tents or in cars, as they are unable to find homes. Others have to travel up to 100 miles to reach work, or they are forced to live in one-bedroom apartments in order to rent.

Telluride had only one or two restaurants open last summer due to a shortage of workers, according to Hayley Nenadal, a filmmaker who lives and works in Telluride. The historic town is known for its challenging slopes and annual film festival.

Nenadal stated that "you don't get coffee anymore" or "you don't go out to dinner anymore or have no place for friends to meet anymore." "People feel a loss in community and a decrease in quality of life.

Housing has been a critical point in cities' efforts to retain local workers and businesses as the pandemic continues to impact people and institutions in the U.S. Experts and residents agree that the issue of housing has been a problem in Colorado's mountain communities for a long time. But, experts say that the pandemic has driven it to overdrive.

Jason Peasley, executive Director of Yampa Valley Housing Authority Steamboat Springs said that "it took what was a slowly increasing problem and made it into a rapidly growing issue." "It is very difficult for local wage earners, to compete with those coming from out-of-town with significantly greater resources."

The issue that was once confined to low-wage earners is now affecting the middle class. It has a direct impact on teachers, nurses, and police officers. High-country areas have had to find creative solutions to the problem, such as limiting short-term rentals or increasing taxes on those who own second homes that are left vacant for long periods.

Nenadal and others proposed a citizens initiative for 2020 that would have kept Telluride's short-term rental count at under 600. Voters rejected the plan, and instead approved a 2-year pause which will maintain the current 787 short-term rental licenses.

"Housing can have such far-reaching implications," stated Margaret Bowes (executive director of the Colorado Association of Ski Towns), which represents 40 cities or counties. It's affecting the quality of service that mountain towns can offer their guests and could have a significant impact on the town's reputation.

Housing authorities and cities have been purchasing or converting properties for sale to workers at below-market prices for years. They've been trying out new ideas like providing rental assistance or down payment to local buyers, putting deed restrictions on properties so that they can be sold to area workers, limiting appreciation to properties to make them more affordable over time, and offering cash incentives for property owners to switch from short-term to longer-term leases.

Some business owners even buy properties to rent out to their employees. Eagle County, which includes Vail, Colorado's ski town, is planning to launch a loan program to property owners who wish to construct or renovate additional dwelling units that can be rented out to local workers.

Anne Lowe, the open space and trails manager of Breckenridge, said that "it really is a struggle." "It is rare to find a single-family home below $1 million. And any of them require tons of work.

Lowe and her husband purchased a single-family home through HousingHelps in 2019. This program allows buyers, homeowners and investors to put deed restrictions on properties that guarantee they will be used locally. The current resident-occupied rate in Breckenridge is 11 percent, but the goal is 35 percent.
Lowe and her husband were able to receive 15 percent of the home's purchase price to put towards a down payment. This lowered their monthly mortgage payments and saved them money for necessary repairs.

Lowe stated, "We didn’t have to stress or take up second jobs in order to afford to live near the town."

Breckenridge's October pilot lease-to-locals program has transformed 55 bedrooms into long-term rentals.

However, there is still slow progress. According to Kim Bell Williams (executive director of Eagle County Housing and Development Authority), the waitlist for Eagle County’s deed restriction program has jumped from 100 buyers to almost 500 in the past two years.

As state legislators debate how to spend $400,000,000of federal Covid relief money that they have earmarked for housing, some of these efforts could soon be boosted.

Colorado is still facing a shortage of homes despite these new initiatives. Fading West Development is a Buena Vista construction company that plans to fill the void by building 600-700 modular homes per year in a 11,000-square foot factory. It opened its doors in November.

The first modular housing community in Buenavista, The farm at Buenavista was opened in 2016. It featured homes made in Nebraska. Fading West is currently building homes in high-country communities across the state, including Gunnison and Montrose.

Charlie Chupp, founder of Fading West and CEO, stated that there is no way to build affordable housing using the resources available in these communities. "There is not enough plumbers, electricians, or general contractors.

"It is crucial that off-site construction can be used to increase supply. This is my opinion the best way to deliver housing.

Bowes, from the ski town association, stated that it will take time for broad-scale success but that "we know every unit can be won is a win."


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