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“It’s scary”: The housing shortage has reached a crisis point in southwest Colorado

A new house under construction in Durango, where the number of homes sold for $750,000 or more increased 169% between 2018 and 2021
Mark Duggan
A new house under construction in Durango, where the number of homes sold for $750,000 or more increased 169% between 2018 and 2021

This story was originally published in the Colorado Sun.

DURANGO — Pagosa Springs paramedic Matt Robison was living with two friends in a 1,200-square-foot house until this summer — when his rent would have leapt 60%, to $2,400 a month. Robison hit the road, working wildland fires and living out of his truck.

Sixty miles west, professor Rebecca Clausen has heard from faculty at Fort Lewis College in Durango who say they’ve stayed in basements or road-trip all summer to save money on rent. One person told her they spend 60% of their take-home pay on a mortgage.

Another 50 miles to the west, Reece Blincoe holed up in an RV with his 60-pound bernedoodle, Bernie, for three weeks because he couldn’t find housing before he started work as superintendent of schools in Dolores. He shuttled back and forth to a storage trailer where he kept clothes that wouldn’t fit in the RV.

“When your superintendent comes to town and has to live in an RV for three weeks, that kind of shows you what we’re dealing with here,” said Blincoe, who eventually found housing with the help of a school board member.

Lack of housing has reached a crisis point in parts of southwest Colorado, where a shortage of places to buy or rent affordably is keeping critical businesses and organizations from hiring and retaining workers. Some residents have resorted to living in cars or on campgrounds, and local officials fear middle-income earners will be priced out of the housing market.

The crunch is similar to that gripping other Western Slope communities that have begun to crack down on short-term rentals amid soaring home prices and a painful labor shortage.

The Durango School District 9-R has 70 job vacancies, in part because would-be employees can’t find or afford housing in the city of nearly 20,000. Local hospitals and Fort Lewis College are grappling with similar difficulties recruiting new employees and retaining those faced with sudden spikes in their rent.

The shortages come after years of steadily rising housing costs in the largely rural region, where new housing has historically catered to part-time home-owners and wealthy vacationers, according to a recent assessment commissioned by the Southwest Colorado Council of Governments and nonprofit Housing Solutions for the Southwest.

Lucrative short-term rentals, a growing number of retirees, and city dwellers eager to ride out the pandemic in a corner of Colorado have added to the housing pressures.

In La Plata County, where Durango is the county seat, some 600 rental units have been turned into vacation rentals since 2010. The number of homes sold for $750,000 or more increased 169% between 2018 and 2021, while those priced at less than $250,000 declined by 37%, the housing assessment found.

Across Archuleta, Dolores, La Plata, Montezuma and San Juan counties, median rent increased 31% between 2010 and 2019 while renters’ median income went up just 19%. More than 11,000 residents were spending more than 3o% of their income on housing in 2019 — 4,689 paying more than 50%.

County assessors say it’s a housing market unlike any they’ve seen in decades.

“It’s getting pretty intense just because there’s not so much supply anymore and there’s a lot of demand,” said Archuleta County assessor Johanna Tully-Elliott. “I’ve not ever seen anything like this, no, and I’ve been here for 20 years.”

The urgency of the problem coupled with a gush of federal relief funding could provide an unusual opportunity to add houses and apartments and overhaul land use codes, advocates for more housing said. But stabilizing the market with new developments could be years away, and may be met with pushback from long-time residents opposed to government intervention, increases in traffic and more densely packed neighborhoods.

In the meantime, local officials fear the shortage could reshape the character of their communities by pricing out families and middle-income earners.

Durango Mayor Kim Baxter said the people who will be driven out by high housing costs are the community’s “core” — those who teach school, work in hospitals, or answer the city’s phones when residents call asking how to pay their water bill. At one city council meeting, a man testified he had an anesthesiologist sometimes staying in a camper in his backyard.

If more housing doesn’t become available, Baxter said, “we will end up with wealthy people — whether they’re retirees or they’ve always lived here or they’re second homeowners, but it’ll be wealthy people — and lower income people who do service jobs.”

Lack of housing leaves jobs unfilled

The dearth of affordable homes has already left critical jobs unfilled across the region.

There are dozens of open positions for teachers, special education instructors and other employees in the Durango School District 9-R, in part due to housing, Superintendent Karen Cheser said. Principals across the district’s 12 schools have said they offered jobs to candidates who later said “no thanks” after looking at the housing market.

Last year, 27 teachers and staff left Durango High School, which Cheser suspects is largely due to housing costs or with frustration over long commutes from more affordable areas. About a third of the district’s employees drive 30 minutes or more to work.

Cheser has experienced first-hand how tight the housing market is. There were no rentals available when she moved to Durango from Kentucky in July. Costs were “outrageous” and beyond what teachers making in the mid-$50,000-range could afford, she said. Houses quickly vanished from the market.

Cheser and her husband eventually paid $760,000 — full price — for a three-bedroom and one-bathroom house with a detached garage. They used cash from selling their home in Kentucky as a 20% down payment.

Businesses and officials across the region say the competitive housing and rental market has forced employees to leave, at times limiting the services they are able to provide.

Tobi Rohwer said three employees of his rafting and tubing company in Pagosa Springs had their homes sold out from under them over the summer. One was turned into a short-term rental.

Dave Woodruff, general manager at El Moro Spirits and Tavern, in Durango, said a new employee had been camping out, and later left because she was accepted into a low-income housing program in Telluride.

“She’s like, ‘Well, Dave, I got to pick this because it’s actually cheaper for me to live in Telluride than it is for me to live in Durango,” recalled Woodruff, who is president of the Durango chapter of the Colorado Restaurant Association.

Shari Pierce, a Pagosa Springs councilmember, said the town’s police department has openings it can’t fill in part due to a shortage of affordable housing. A business Pierce works for just lost an employee who couldn’t find a place to live. She couldn’t sell her house, she said, “not because it wouldn’t sell, but because I can’t afford to buy something (similar) to move into.”

“It’s very stark, what’s going on,” Pierce said.

And in Durango, a shortage of employees in the local parks department left city properties and a once well-tended river trail overrun with weeds and prompted administrative employees to go clean up the landscaping at City Hall over the summer, said Baxter, the Durango mayor.

Businesses across the board have struggled to find employees during the pandemic and the city says housing is an obstacle to luring mid- and low-wage workers.

“There are people I’ve talked with — their rent has gone from $1,100 a month to $2,100 a month overnight,” Baxter said. “It’s scary.”

Across La Plata County, residential property values have gone up about 30% since the end of June 2020 and homes that used to sell for $450,000 are now going for $600,000 or more. An increase of 5% a year is typical, said assessor Carrie Woodson, a 44-year resident of Durango who’s worked in the assessor’s office for 25 years.

A townhome — with a view of a sewer plant and a highway — had for years been valued at $280,000 but was recently placed under contract for $500,000, she said.

Woodson tried to hire two people in the last six months who both turned down jobs because they couldn’t afford to live there at the salary offered.

She would like to move her mother from Oklahoma. “There’s just nothing available for her,” Woodson said.

Property paperwork she reviews shows much of the housing is being bought by people living in cities in and outside Colorado.

In nearby Archuleta County, where Pagosa Springs is the largest town, Tully-Elliott said property values have been increasing since 2011 but have “gotten insane” since March or April of last year. The average active sale price is now over $1 million and the median is $750,000, compared with around $350,000 last year.

“There’s not a local here that can afford something like that,” said Tully-Elliott, the county assessor.

The county has had at least 1,287 property sales so far this year, up from the 1,253 in all of 2019. There were 1,537 in 2020, she said.

Local officials are trying to add pockets of housing for middle-income earners across the region. Hotels may be converted to housing units in Pagosa Springs and Durango. Deed-restricted townhomes are on track to be built in Bayfield, a town commuting distance from Durango.

Some employers have started to act as landlords to their workers, and managers are helping match workers to potential housing units.

At Fort Lewis College, the board of trustees is considering building on-campus housing for faculty and offering a mortgage assistance program, said Clausen, the professor who represents faculty before the board of trustees.

The Springs Resort, along the San Juan River in Pagosa Springs, recently redeveloped a building to offer eight housing units to nine employees for up to $700 a month. About 10 businesses in town have banded together to see if they can add more workforce housing, the resort’s managing principal David Dronet said.

He’s optimistic the strategy will work in the area, but doesn’t think it could be replicated on a large scale.

“There’s not a lot of money out there that’s willing to make zero return, whether it’s a bank or an investor or even a business,” he said.

At Mercy Regional Medical Center, an 82-bed acute care hospital in Durango, newly hired facilities and shared services director Joseph Ashurst is trying to help an employee move into the short-term rental his family has been staying in. Ashurst’s employee said he might have to leave his job and move away because his landlord was selling the house he’d been renting.

“I’ve never been in a management position where helping people to find affordable housing was an important way to support my team,” said Ashurst, who recently faced a chaotic and cutthroat process to buy a home in Durango this summer.

He and his wife had to “jump immediately” when a house came on the market and ultimately bought a house that is the oldest and most expensive of six they have purchased over the years.

They are now replacing floor coverings, adding shelving, painting kitchen cabinets and two bedrooms, and installing countertops and a new sink in the house, he said.

“I’ve made it work, but barely”

Wages in the region haven’t kept pace with housing costs and even a big bump in pay couldn’t close the yawning gap, local employers said.

Rural school districts have lower pay scales than those in urban and suburban areas, and raises would have to be substantial to make a dent given the current market, said Cheser, the superintendent. Even if she wanted to, there is little room for raises at the Durango School District 9-R, where more than 80% of the budget goes to pay personnel.

The situation is similar at the Durango police department, where many officers commute from more affordable areas outside the city limits, including New Mexico.

Durango Police Chief Bob Brammer estimates his department was losing 8 officers a year before 2020, which marked the start of both a pandemic and a national reckoning over race and policing. Many take jobs along the Front Range where the pay is higher relative to the housing costs.

“We’ve got a lot of great things in Durango with the rivers and the mountains and the outdoor activities and all the amenities that go along with it,” he said. “But none of those things put food on the table.”

Bayfield Trustee David Black remembers when “affordable housing” meant buying three acres for $30,000, and adding a septic tank and trailer house. Now, a three acre parcel with a trailer can sell for $250,000 or more, he said.

His son, a plumber who makes in the high five or six figures, is working on a 9,000-square-foot house, Black said. His parents’ home in Durango — sold for less than $200,000 around 1990 — is now owned by people with a Houston address for a 10,100-square-foot, seven-bedroom home.

“You’re probably going to need to make $75,000 to $80,000 a year as a family just to be able to set up and get rent,” said Black, whose father worked at Fort Lewis College.

At the college, chemistry professor Callie Cole said she moved five times in as many years, bouncing between rental units that ranged in cost from $750 to $1,250 a month. She at one point spent two and a half years living in a colleague’s basement at a reduced rate.

“I’ve made it work, but barely,” she said.

After saving money by living in her friend’s basement apartment, she was able to buy a 500-square-foot, one-bedroom condo for $167,000 in 2019. She can’t imagine raising a family in such a small space. Now, that price is unheard of, she said.

“It just doesn’t seem feasible to make it financially in this town without having a friend or other connection to help you get a foot in the door,” she said.

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