Sky-High Affordability Gap Strains Ski Town Economies

Vail, Colorado

Vail, Colorado Shutterstock

 

Connecting state and local government leaders

Mountain communities across the West huddle in Vail to discuss the challenges of high costs of living, low-paying jobs and a scarcity of places to live.

VAIL, Colo. — Everyone has a housing hardship story in a ski town: camping, living in cars, six people in a two-bedroom condo, massive rent increases. Experiences that at one time or another had them seriously questioning whether it was worth it to chase the dream of living in a place most people only aspire to vacation in.

In mountain resort communities from Tahoe to Jackson to Aspen, jobs are typically low-paying, the cost of living is sky-high, and housing is scarce and extremely expensive. And more and more people are deciding that living the dream is a financial nightmare. They’re leaving town and leaving businesses that already struggle to find enough workers season in and season out.

Developers, town and county officials, impact investors and housing experts from 26 mountain communities across the West met in Vail this week to try to solve that Rubik’s Cube of supplying enough workforce housing to keep restaurants running, schools staffed and chairlifts churning. In addition, those at the inaugural U.S. Mountain Community Summit also grappled with the parallel problem of providing enough middle- to upper-income housing for key professionals.

“Where do you get housing that accommodates somebody who can afford to spend $500,000 to $1 million? That's really the group that the housing shortage has priced out in mountain towns,” said Adam Ducker, who directs the Urban Real Estate Advisory Group at RCLCO Real Estate Advisors.

“People really can work remotely,” Ducker added. “There really is a lot of upper-income employment growth in Eagle County [Vail] and Pitkin County [Aspen] and other places like this—technical jobs, creative jobs, engineering jobs, jobs with the large employers. So there will be a lot more potential customers trying to compete in a market that's underserved.”

That was the realization APX1 founder Natalie Spencer came to when the Idaho native returned to live in Sun Valley after years of working on refugee resettlement, water policy and infrastructure issues in remote areas of Asia and Africa.

“I had moved back to Sun Valley and I was complaining [to a wealthy friend] how in the seven years that I was gone, it had turned into Jackson Hole and there was no place to live for someone making six figures and what was available was terrible,” Spencer said.

“It wasn't for a family, it wasn't for professionals, it’s kind of these dumpy ski-bum houses. And he turned around and looked at me and said, ‘You know, why don't you solve something in your own backyard?’”

That was the genesis of a six-month research project that culminated in the creation of APX1, which combines a full-service development company with an impact-investment network, and ultimately its summit of thought leaders from around the country. The APX1 mission is to address the affordability gap for people making 50 to 300 percent AMI, or area median income.

“I found that the affordability gap in most of these resort towns was much greater than the majority of the U.S.,” Spencer said. “People aren't used to talking about workforce housing for people making 300 percent AMI. That seems absurd, right? This is very much addressing the missing middle, if you will.”

In places where median family income may only be $70,000 a year but median single-family home values are 10 times that amount, Spencer says the problem cannot be solved without committed impact investors, which she identifies as someone willing to agree to a 10 percent internal rate of return over 30 years versus a typical 30 percent return on investment in three years.

“These are philanthropic dollars that instead of receiving no return receive a very secure, long-term, lower-yield return, which is what impact investment’s all about,” Spencer said. “I raised all of the capital for my last company, a couple of million dollars, on the chairlift. It's an incredible format. Everyone talks about the elevator pitch. There's nothing sexy about an elevator, right?”

Hence the location of the first summit, where attendees broke up into groups after morning panel discussions and headed out onto the slopes to talk public-private partnerships, innovative funding mechanisms and best practices for solving a seemingly intractable problem.

“Workforce housing is consistently listed as the top pain point for local businesses with regards to business growth and employee retention,” said Chris Romer, president and CEO of the Vail Valley Partnership chamber of commerce.We’re not unique. Mountain resort communities across the country are faced with similar challenges.”

Vail has developed both workforce housing and some new affordable townhomes aimed at that “missing middle,” and now the town is working with the ski company, Vail Resorts, on even more employee units. But perhaps its most ambitious effort is its relatively recent Vail InDEED program aimed at deed-restricting 1,000 more housing units by 2027, for a total of 1,700.

In exchange for a negotiated fee, the property must then be occupied by someone working at least 30 hours a week in Eagle County—whether it’s the owner or a renter— and there’s no appreciation cap placed on the unit when it sells, although the deed restriction transfers to the new buyer.

Vail Housing Director George Ruther says partnerships with private-sector developers and local businesses like Vail Resorts are absolutely vital because there’s a great deal of taxpayer risk associated with public development. That’s one of the reasons he’s so high on the Vail InDEED program, which simply preserves existing homes for local workers with minimal impacts.

“Every one of those dwelling units that we acquire comes with no development risk,” Ruther said. “We're not out speculating, it's existing land that's already there, it's an existing home in an existing neighborhood, so there’s no increase in density or impacts from construction or traffic. It kind of takes that NIMBY [not in my backyard] argument completely off the table.”

And in a narrow eight-mile-long town at the bottom of a steep mountain valley surrounded by the U.S. Forest Service, land to build on is becoming more and more scarce, pushing development 30, 40, even 50 miles to the west. What little private land there is usually comes with a big price tag and major hurdles for the few developers willing to do business in the workforce market.

“The biggest obstacle that we see to delivering workforce housing is constantly about the math problem,” said Kimball Crangle of Wisconsin-based Gorman development company. “We don’t get lumber for a discounted rate because we’re delivering workforce housing. Concrete isn’t cheaper because we’re delivering workforce housing. The entitlement process, sadly, in the communities that we work in is often not expedited because we’re delivering workforce housing.

“But subsidy is required. We are deliberately limiting our net operating income and the debt we can carry on the property to make sure the people we are housing can afford to live there.”

One solution to cost issues, perennial labor shortages and dicey construction weather in mountain communities can be modular construction—or building the majority of a housing unit offsite and trucking it to its permanent location. The last couple of Vail projects have been modular.

Brian Abramson, co-founder and director of business operations for Seattle-based Method Homes—a sustainable prefab company—says modular construction could help better address the acute housing crunch both in mountain communities and urban areas.

“The same problems that are happening in mountain towns are amplified in our market because of dramatic cost of living increases, real estate increases, so, especially in the affordable housing space, there’s a lot of skepticism [of modular in Seattle], more so than I heard here, which is actually really validating to hear how much it’s been embraced in the mountain communities,” Abramson said.

Microsoft recently announced it’s spending $500 million to address the affordable housing crisis in the Seattle metro area where the company is based.

Steve Glenn, founder of Rialto, Calif.-based Plant Prefab—the first sustainable prefabricated home factory in the nation—said another Seattle tech company, Amazon, recently invested in his company. From both a lower cost and environmental standpoint, Glenn thinks his homes can help solve the affordable housing problem both in mountain communities and in urban settings.

“Minneapolis just got rid of all single-family zoning. If you have a home in a single-family home zone area, you can now do multi-family anywhere in Minneapolis,” Glenn said. “Obviously, the number of units are limited by the size of your lot, but that’s spectacular. That’s going to have a dramatic effect on creating more housing more efficiently. I hope more cities do this.”

David O. Williams is a journalist based in EagleVail, Colorado.

FEATURED CASE STUDIES
Powered By The Atlas
Erie County, PA offers all local restaurants free digital tools to plan for safe COVID reopening
Erie County, PA, USA
MN Water District and High School Collaborate on Stormwater and Education
Forest Lake, MN, USA
New Parking Plaza Adds Capacity & Embraces Sustainability at San Diego Airport
San Diego, CA, USA

NEXT STORY: Is State and Local Cybersecurity Maturing Fast Enough?

X
This website uses cookies to enhance user experience and to analyze performance and traffic on our website. We also share information about your use of our site with our social media, advertising and analytics partners. Learn More / Do Not Sell My Personal Information
Accept Cookies
X
Cookie Preferences Cookie List

Do Not Sell My Personal Information

When you visit our website, we store cookies on your browser to collect information. The information collected might relate to you, your preferences or your device, and is mostly used to make the site work as you expect it to and to provide a more personalized web experience. However, you can choose not to allow certain types of cookies, which may impact your experience of the site and the services we are able to offer. Click on the different category headings to find out more and change our default settings according to your preference. You cannot opt-out of our First Party Strictly Necessary Cookies as they are deployed in order to ensure the proper functioning of our website (such as prompting the cookie banner and remembering your settings, to log into your account, to redirect you when you log out, etc.). For more information about the First and Third Party Cookies used please follow this link.

Allow All Cookies

Manage Consent Preferences

Strictly Necessary Cookies - Always Active

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data, Targeting & Social Media Cookies

Under the California Consumer Privacy Act, you have the right to opt-out of the sale of your personal information to third parties. These cookies collect information for analytics and to personalize your experience with targeted ads. You may exercise your right to opt out of the sale of personal information by using this toggle switch. If you opt out we will not be able to offer you personalised ads and will not hand over your personal information to any third parties. Additionally, you may contact our legal department for further clarification about your rights as a California consumer by using this Exercise My Rights link

If you have enabled privacy controls on your browser (such as a plugin), we have to take that as a valid request to opt-out. Therefore we would not be able to track your activity through the web. This may affect our ability to personalize ads according to your preferences.

Targeting cookies may be set through our site by our advertising partners. They may be used by those companies to build a profile of your interests and show you relevant adverts on other sites. They do not store directly personal information, but are based on uniquely identifying your browser and internet device. If you do not allow these cookies, you will experience less targeted advertising.

Social media cookies are set by a range of social media services that we have added to the site to enable you to share our content with your friends and networks. They are capable of tracking your browser across other sites and building up a profile of your interests. This may impact the content and messages you see on other websites you visit. If you do not allow these cookies you may not be able to use or see these sharing tools.

If you want to opt out of all of our lead reports and lists, please submit a privacy request at our Do Not Sell page.

Save Settings
Cookie Preferences Cookie List

Cookie List

A cookie is a small piece of data (text file) that a website – when visited by a user – asks your browser to store on your device in order to remember information about you, such as your language preference or login information. Those cookies are set by us and called first-party cookies. We also use third-party cookies – which are cookies from a domain different than the domain of the website you are visiting – for our advertising and marketing efforts. More specifically, we use cookies and other tracking technologies for the following purposes:

Strictly Necessary Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Functional Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Performance Cookies

We do not allow you to opt-out of our certain cookies, as they are necessary to ensure the proper functioning of our website (such as prompting our cookie banner and remembering your privacy choices) and/or to monitor site performance. These cookies are not used in a way that constitutes a “sale” of your data under the CCPA. You can set your browser to block or alert you about these cookies, but some parts of the site will not work as intended if you do so. You can usually find these settings in the Options or Preferences menu of your browser. Visit www.allaboutcookies.org to learn more.

Sale of Personal Data

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Social Media Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.

Targeting Cookies

We also use cookies to personalize your experience on our websites, including by determining the most relevant content and advertisements to show you, and to monitor site traffic and performance, so that we may improve our websites and your experience. You may opt out of our use of such cookies (and the associated “sale” of your Personal Information) by using this toggle switch. You will still see some advertising, regardless of your selection. Because we do not track you across different devices, browsers and GEMG properties, your selection will take effect only on this browser, this device and this website.