Housing for workforce
La Plata County is facing a significant affordable housing crisis, impacting the economic basis of the community: its workforce. Local businesses have felt the impacts of the lack of workforce housing, finding it harder to hire workers to keep our region’s economy functional.
There is a “once-in-a-generation opportunity” to address the affordable housing system in the state, as there remains $400 million in unallocated funding from the American Rescue Plan Act of 2020. The state of Colorado has released a report recommending transforming approaches to affordable housing. The report suggests a focus on increasing the supply of affordable housing, improving housing for working households.
The People’s Policy Project 2018 report and the Economic Development Alliance (EDA) of Southwest Colorado’s 2022 Housing 101 report provide actionable plans for meeting housing needs through a municipal housing developer (MHD) or nonprofit housing developer (NHD) model, offering benefits over yesterday’s trickle-down economics and developer incentives. In the MHD model, local government entities, such as municipalities or housing authorities, take on a more active role in the development and management of affordable housing. This model is used throughout Colorado’s local regional housing authorities (RHAs). The model offers greater predictability of the number and location of affordable housing units. Additionally, the MHD model offers greater accountability and transparency. The NHD model has been used successfully in Santa Fe not only to create a large number of affordable housing units but also to greatly increase the capacity of the construction industry there.
Incentivizing private developers through tax breaks and other financial subsidies can lead to a lack of predictability regarding the number and location of affordable housing units, as developers may not always choose to take advantage of the incentives. Inclusionary zoning does not address the scale of the affordability crisis. Private real estate investors are happy with a very tight rental market, which increases their profits. Developers and builders have focused for too long on the profits available for the economic elite, leaving the workforce, and thereby other businesses, out in the cold. A 2021 study of regional housing needs identified the greatest barrier to addressing housing needs: lack of/limited interest by the private sector to build affordable housing.
The EDA report analyzes the need for “below market rate” housing for large sectors of our workforce. It’s important to identify the income levels that are being served, or obscured, by unclear words such as “affordable.” Full-time minimum wage income is $31,200, translating to an “affordable” rental rate of $850 per month. La Plata County employs approximately 7,500 workers in retail, hospitality and recreation who need housing in this price range. Since the EDA report was written, Housing and Urban Development (HUD) has provided the annual adjustment to our region’s average median income (AMI); it is now $100,000! These signature industries need housing targets at 30% of AMI: below market rate. The EDA report states its goal is increasing housing opportunities for residents making $80,000 and above.
It appears that our RHA has undergone a significant change in direction during 2022, moving from an attempt to contract for expertise, to their efforts to directly hire an executive director, and finally to contracting with the EDA for administrative support.
It is important to evaluate the level of housing expertise obtained for the RHA through these changes and how they will impact the services provided to the residents of La Plata County. The benefit the RHA sought from hiring an executive director was increased capacity to meet the state’s goal of transforming our regional approach to affordable housing through the MHD model.
Now is the time to act to provide below-market rate housing for our workforce. I encourage the RHA to obtain subject area expertise and leadership.
– Laurie Roberts, Bayfield