Vail Valley’s housing problem ‘hibernating’
VAIL VALLEY, Colorado – As the Vail Vailley’s economy here boomed in recent years, worker housing became one of the most-discussed topics in local government.
The county faced a chronic shortage of employees, a rapidly growing population and an influx of second-home owners and retirees.
But, in the clutches of an economic downturn, those forces have changed. Help-wanted ads have disappeared, and the unemployment rate is nearly double what it was last year. The real-estate market has cooled, and home sellers are lowering prices to make deals happen.
Is affordable housing here still a “crisis,” as it was sometimes described by politicians during the height of the boom years? Or do politicians’ housing efforts go on hiatus?
“I think some of the urgency, politically, has slackened, for sure,” said Jon Stavney, a county commissioner who made affordable housing a priority when he ran for office last year.
At the same time, the issue isn’t disappearing, he said.
“If you’re taking the position today that the problem has gone away and is not coming back, I think you’re fooling yourself,” Stavney said.
The downturn brings opportunities in the realm of housing, Stavney said, including buying land as well as working with “distressed” developers who need financial help with their projects.
The county is in the process of selling the Lake Creek Apartments, which would net the county millions of dollars for such affordable housing projects.
In 2006, Eagle County commissioned the Urban Land Institute, a research organization that focuses on land use, to study the county’s affordable housing situation. The resulting study said that the county will need 500 to 600 new homes per year to accommodate growth – and 3,500 homes were needed right away to satisfy demand. The free market would not solve the housing shortage, and government action – in concert with the private sector – was needed to stimulate continued economic growth, the study said.
Don Cohen, executive director of the Economic Council of Eagle County, said the 3,500 figure might be up for debate now, but the long-term assumptions of the study – that population here will grow significantly, that workers will be in demand, and that real estate prices will continue to climb – will remain in effect.
“The demand has lessened, and the pressure for population growth has decreased for now, but I have no expectation that that’s a forever thing,” Cohen said.
Cohen said he expects demand for worker housing to be strong again in two to five years.
“I think there’s a strong sense from town governments and the county that the pressure is off, but the problem is only in hibernation,” Cohen said.
For now, decreases in prices of homes have allowed people to buy free-market homes that had previously been too expensive, said Tom Edwards, a Gypsum councilman. Homes that were probably worth over $300,000 might sell for $240,000 now, he said.
“You can get into the free market for less money than you could before,” he said.
Edwards said he doesn’t anticipate Gypsum participating in any new worker-housing development projects over the next couple of years, in light of the recent approval of both the Sawatch View Condominiums and Stratton Flats. Those projects have plenty of available of homes still waiting to be bought, he said.
Cohen and Edwards agreed that efforts to create worker housing lag behind demand as it cycles up and down along with the economy.
But, this time, Eagle County will be better prepared to ramp up efforts once demand returns, Cohen said. Cohen cited the recent creation of the Valley Home Store, which serves as a clearinghouse for deed-restricted homes in the valley. Its board is made up of representatives from towns, the county and businesses.
At Miller Ranch, the 282-home affordable housing complex, demand is high for for-sale properties, said Alex Potente, housing and development director for Eagle County.
But downvalley deed-restricted homes have seen a reduction in demand, he said. Sales at Stratton Flats, a partially built housing complex in Gypsum, have been slower than expected, Potente said. The town is involved in talks with banks about restructuring the project’s debt, he said.
The county has also started work on senior assisted-living housing, Potente said.
Looking forward, the downturn does create some opportunities for housing projects, Potente said.
“Land is cheaper,” he said. “Existing stock is cheaper. (There are) some struggling developers that don’t have a lot of options for exiting out of the marketplace.”
New housing projects usually take at least three years before they are ready, and the county figures that demand will have grown again by then, he said.
Mark Gordon, a Vail councilman who has pushed for more affordable housing in the town, said that housing remains one of the top issues for the town. He doesn’t think the town should be letting up its efforts now.
“That’s the mistake that’s been made in the past repeatedly,” he said.
Now is a good time to do projects like a planned duplex on town-owned property on Arosa Drive, taking advantage of lower construction costs, he said.
The town has seen seven interested buyers for the two homes at the site, it said last month. A lottery will be held in October to determine who has the first shot at buying them.
Staff Writer Edward Stoner can be reached at 970-748-2929 or email@example.com.