Vail sets big, tangible goals for employee housing in 2023
Current projects, new sites and county-wide collaboration could create significant opportunities for the town to take a bite out of the housing crisis
Between ongoing redevelopment and development projects, new site and unit acquisitions and eyeing countywide collaboration, the town of Vail is heading into 2023 with the aim of creating tangible progress on its employee housing goals.
“This past year and a half, (with) rising interest rates and huge run-ups in pricing, (there’s been) lots of headwinds, but still there’s lots of reasons for optimism in our housing world,” said Steve Lindstrom, the Vail Local Housing Authority chairman, on Tuesday, Feb. 8, during the authority’s annual update to the Vail Town Council. “A lot of things are cooking here in town and also in the county, the towns of Avon, Eagle, Gypsum, there’s stuff happening everywhere. It takes a while, but there’s stuff happening,”
Vail InDEED, one of the town’s biggest housing initiatives, demonstrates some of the challenges that persisted around real estate and housing in 2022.
“With Vail InDeed, we did face a bit of a headwind this year with the rapid rise in real estate prices and the hangover effects from that exponential increase in real estate prices around COVID and mountain migration,” said George Ruther, Vail’s director of housing.
In 2022, the town acquired four deed restrictions, spending $585,007 on these purchases. According to Ruther, while this increased the overall number of resident-occupancy for Vail residents to about 380 in 80 residences, 2022 was the year with the least number of deed-restriction purchases since the inception of Vail InDEED.
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Ruther, however, expressed optimism for the year ahead to “reignite and catalyze where we’re at with Vail InDEED” as interest rates steady and real estate price stabilization. He added that the town has already received some applications this year.
The perfect housing soup
Lindstrom said that the “soup” that makes housing happen has three ingredients: land, funding and entitlements. He added that there were opportunities for the town and housing authority in each of these buckets this year.
“Sometimes, here, right now, it feels like housing is happening everything, everywhere all at once. But at the same time, so much of this stuff happens in the background and it only surfaces when it’s finally ready — there’s only one project under construction right now, and who knows if there will be one next year. These things have such a long lead time,” Lindstrom said.
Comparing the current approach to a dog chasing squirrels, Lindstrom added that it’s “time to really start focusing on getting some things done and figuring out which are the (projects) we want to do right now.”
The need for housing, while well established, has a lack of quantifiable data. The most recent housing needs assessment was completed in 2018 and identified a housing deficit of 5,500 dwelling units. Since then, Ruther said that the town has seen an increase of 52% in the total number of deed-restricted homes, but that meeting these needs is an “ever-moving target.”
Land (and projects)
Housing was identified as Vail’s top priority for the year following recent strategic planning. As Vail targets its broad goal (set in 2017) of acquiring 1,000 additional deed restrictions by 2027, the town has also set five tangible goals for addressing housing in 2023.
The five projects include completing the Residences at Main Vail development; starting the entitlement processes for Timber Ridge and West Middle Creek; amending commercial linkage requirements and adopting residential linkage; initiating the acquisition process for one additional parcel of land to create a regional housing development; and acquiring a parcel owned by the Colorado Department of Transportation in East Vail.
At Tuesday’s meeting, Ruther said that if the town can get one or two of these larger projects moving forward, he believes the town is “on pace” to hit the 2027 goal.
In the housing soup, finding developable land can represent a significant hurdle. In the goals above, there are already several parcels that the town has identified as developable opportunities for housing.
This includes projects on town-owned land including the under-construction Residences at Main Vail, the pending redevelopment of Timber Ridge apartments in West Vail as well as West Middle Creek, which the town recently rezoned for residential housing.
It also includes new opportunities, like a 1.02-acre parcel, currently owned by the Colorado Department of Transportation, in East Vail. Located south of I-70 at the corner of Spruce Way and Columbine Drive, the town is working toward a purchase contract with CDOT, and hopes to make a financial acquisition of the property “in the not too distant future,” Ruther said on Tuesday.
In an email to the Vail Daily on Wednesday, Ruther said the town has been in talks with the state agency for nearly three years to acquire the site. Based on an evaluation of the site by the town, the site could have 12 to 15 homes.
“While not yet determined, opportunities exist to create a for-sale type of home product similar to the townhomes with the Chamonix Vail Neighborhood In West Vail,” Ruther wrote. “At this time, however, no final plans have been approved, nor have any applications for development been prepared or submitted for review.”
The town is, however, in the final stages of negotiating a deal with CDOT on the parcel, he added.
Another opportunity is a parcel at Traer Creek in Avon, which represents a “significant development opportunity that could actually provide some real partnership opportunities in a downvalley opportunity for housing going forward,” Ruther said. Conversations on this are ongoing and “more exploratory than anything,” he added.
The final opportunity Ruther pointed to on Tuesday was a State Land Board parcel in EagleVail that is part of a proposed Senate bill. If passed in the current legislative session, Ruther said it could provide a “funding source for some significant work to begin in the planning and designing of what a future housing development could look like” on this parcel. The development of housing would include collaboration with not only other county municipalities but also state agency partners.
Funding and financing
As the town looks at these projects and opportunities, the large price tag can be a deterrent. For this reason, Lindstrom said the authority is looking into different bonding options including tax-exempt bonds and using the housing authority as a bond issuer to lessen the burden on the town. This also includes seeking potential opportunities with private partners.
A recent influx of state and federal grant opportunities could also provide funding for employee housing projects if played correctly.
“In Eagle County, this first batch of funding from the state, there were 10 funding proposals from within the county, uncoordinated. We’re competing against ourselves,” Lindstrom said. “The more that we can figure this out, get it together with our close neighbors, the less we’ll be competing with them and the more that we’ll be cooperating with them and probably (will be) more successful that way.”
The final ingredient required is entitlements, which Lindstrom said the housing authority is hoping to evaluate this year. Specifically, he said it wants to push forward development review process reform.
“We’ve got to figure out some ways to make this stuff work better,” he said. “It doesn’t cost anything to make it more streamlined and it can actually make projects more cost-effective because 30% of a lot of projects goes to entitlements. If we can cut that somehow down, that all flows through to the end project and shortens the time horizon.”
Within this, the town’s fourth strategic goal this year is to look at its overall code and ensure it is aligned with achieving its goals, primarily its goals around housing. The approach, as stated in its action plan, would be to make sure that the code not only supports the goals but also find opportunities to improve efficiency in the development review process.
Timber Ridge redevelopment’s big price tag
One of the projects that the town is continuing to make progress on is the redevelopment of Timber Ridge. Through monthly updates to the council as well as committee meetings (comprised of town staff, Town Council members and Triumph Development), the town has created a preliminary program and design for the project.
The most recent designs presented by Triumph on Tuesday included a six-building design that would bring 284 units (and 567 bedrooms) of housing to the site, a sizeable increase from the 192 bedrooms currently on the site.
The size, scale and magnitude of this redevelopment project also mean it’s likely to have a significant price tag. Preliminary cost estimates — based on the input of two general contractors — put a total price tag of around $148 million on the project.
With this, the committee has been looking for ways to pair down the project into “bite-sized pieces to be completed and developed affordably,” Ruther said.
“The reactionary thing to do would be say, ‘Oh no, we can’t go that big,’ and start to pair down where our debt ends up by reducing the number of units, but all the input has been: we need to max this out as best we can,” said Council member Pete Seibert.
While the town and developer are still fleshing out and vetting ideas, one that stands out is to leverage local employers and “seed” the project rather than having the town subsidize it.
“The difference in our mind is you put this money in, three to four years, you get it back,” said Steve Virostek, the co-founder and principal at Triumph, adding that this money could then be spent on other future housing endeavors.
As this idea continues to be vetted, the town is forging ahead on many other aspects of the project.
This includes the acquisition of another parcel from CDOT. As currently designed and contemplated, the town would need to acquire a 0.75-acre parcel of land from the state agency located adjacent to the parcel, to construct the six buildings. Initially acquired by CDOT to address grading when I-70 improvements were constructed, Ruther said the agency no longer has that need but sees the value of housing on the site.
The town is currently on track to acquire the parcel, with a hearing in front of the Transportation Commission on March 15, which would allow Vail to get it via resolution.