Bottom line: the economy has taken a huge hit; employment and wages are down; the oversized inventory of housing units currently on the market will likely remain for years and years – but the need for affordable housing in both Ouray and San Miguel counties is still not being met.
Thirty percent of all households in Ouray and San Miguel counties are “cost burdened,” said Melanie Rees of Rees Consulting, Inc. of Crested Butte, one of two study authors. That is, using the federal Affordability Test (which states that no more than 30 percent of a household’s income should go to pay for housing), 610 Ouray County households are cost burdened, while 1,513 households meet that threshold in San Miguel County. “That means 30 percent of the population lives in housing they can’t afford,” Rees said.
This most recent study documented changes “from the peak of the construction boom to the depth of the recession,” said Chris Cares, the other presenter, representing RCC Associates out of Boulder. Three previous needs assessments over the years were prepared for the San Miguel Regional Housing Authority. The most recent was in 2007, “right before everything happened,” said SMRHA president Shirley Diaz.
By everything, of course, she meant the recession. The numbers are sobering. Since 2007 when employment was at its peak, Ouray County has lost 573 jobs, a decrease of 20 percent. San Miguel County lost 1,155 jobs, or 15.5 percent. Thirty-nine percent of households in Ouray County (or a total of 789) reported a decrease in income over the same period. It was 42 percent (1,450 households) in San Miguel County. The average loss was $33,000 in Ouray County, and $43,000 in San Miguel.
Sixty-one percent of employers in Ouray County who responded to the survey said they had reduced their workers’ hours. Fifty-six percent said they had frozen wages and salaries. These reductions have impacted the ability of employees to afford housing, said Cares. Foreclosures and the large number of units on the market have increased housing availability, Cares said, “but the prices are still too high for households with incomes under 200 percent AMI.”
AMI, or Area Median Income, the presenters explained, is a way to understand whether housing is affordable or not. The median income in Ouray County is $63,300, which equals 100 percent AMI. The trouble is, most properties for sale are too expensive for someone with that income. The study found that 42.7 percent of homes listed in Ouray County required an AMI over 250 percent. A lower-earning household, with a 51 percent to 80 percent AMI, would find only five percent of the listings affordable. In San Miguel County the discrepancy is even greater: 73 percent of listings required a 250 percent AMI or higher.
Home prices have tumbled in the two counties since their peak in 2007. San Miguel’s median home price dropped about 20 percent to just over $1 million. Ouray’s fell even further, down about 26 percent to around $425,000. “While prices have dropped,” said Rees, “so has the ability to buy.”
What about renting? The average rent in Ouray County is $810/month, according to the researchers. In San Miguel County, the number is $1,261/month. Deed-restricted housing in San Miguel County commands an average of $817/month. The lower figure for Ouray County, Rees speculated, was due to its proximity to Montrose, where rents are considerably lower.
Vacancies in rental housing tell two different stories. In San Miguel, the vacancy rate is very low, just 5 percent (29 vacant units out of 584 total). In Ouray County, 13 of 24 units are currently vacant, a 54 percent vacancy rate.
“There is no need for you [Ouray County] to go out and build units here,” Rees said.
Although the study did conclude, Cares wrote, that “additional deed-restricted units are still needed for commuting employees who want to move closer to their work.”
“It might come as a surprise to some in Ouray County that you have any deed-restricted housing here,” said Rees, who went on to list examples: 10 single family homes in Ridgway’s River Park, two lots in the Parkside subdivision (also in Ridgway), 16 accessory dwelling units in Ridgway, one duplex and six accessory dwelling units in Ouray, and a four-plex parcel in the Preserve subdivision in Ridgway.
Seven hundred twenty-five housing units are deed-restricted in San Miguel County.
“Come to my town of Crested Butte,” Rees said, “and walk the alleys. You’ll see a lot, about 170 new accessory dwelling units.”
The study concluded with prognostications for the future. In spite of the slow economy, the study authors forecast growth in housing demand by 2015. They based their calculations on three different growth rates, from conservative (0.5 percent), to aggressive (3 percent).
This means, they said, that in four years, Ouray County will need between 31 and 193 new units to house a growing workforce. Based on the preferences of existing employees, 40 percent of those new units should be located in Ridgway, 26 percent in the unincorporated county, and 17 percent in the City of Ouray. Eighteen percent would be built outside the county for employees who prefer to commute.
Of course, building new, affordable housing requires participation by the private sector, which in these uncertain times remains a question mark.
And, Cares said, “decisions by public and private developers aren’t made based on the percentage points in our studies. They are political decisions. We hope that by providing the numbers, we can elevate the conversation.”
The complete study is available at smrha.org.