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Home My WebLink About1.15 Housing Demand ResearchFlying M Ranch Planned Unit Development Application Garfield County, Colorado Exhibit O Housing Demand Research 1 | Page GARFIELD COUNTY HOUSING DEMAND December 8, 2022 "Study after study has documented unaffordable housing prices, inventory shortages, and an ever- expanding commute shed for workers. Moreover, decades of implementing best practices in most of the region's communities has helped many but left still many more needs unmet." From the 2019 Greater Roaring Fork Valley Housing Study Fifty-eight percent of Roaring Fork Valley employers surveyed in the 2019 Greater Roaring Fork Housing Study placed the highest priority on "rental housing for year-round employees." Fifty-two percent of those surveyed in the Glenwood Springs area called housing "one of the more serious problems" in the area. Thirty-eight percent of respondents who live in rental housing said the lack of availability of rentals is "the most critical problem in the region." - More commuters force greater wear and tear on the region's roads. This points directly to a quality of life and sustainability problem and suggests an economic infrastructure that cannot easily be changed due to factors including limited land, land and housing values, ownership patterns, visitor-focused businesses, and the prevalence of short-term rentals. - The 2021 Mountain Migration Report found communities had very few vacant long-term rental units prior to COVID. Most year-round renters remained in their units during COVID, meaning that the availability of long-term rentals did not increase. Many seasonal workers left; however, including J1 visa holders. As seasonal rentals were vacated, property managers responded by converting shared bedrooms into single/couple occupancy and increased cleaning of common areas. Employers who provide housing turned away all but their employees, unlike in typical years when they maintain full occupancy by renting to the general population. This contributed to a rental unit shortage. When buying is not an option "All else being equal, when demand is constant and supply is constrained, the price of housing is pushed higher. This has historically been the case in the region for the past decade and a half. For permanent residents, the prevalence of second homeownership constrains the supply and pushes up prices. Not only does this mean rising property values (property taxes), but for new residents it means locking in greater 2 | Page portions of household income on the cost of housing (new mortgage holders) – both of which are affordability problems." – 2019 Greater Roaring Fork Regional Housing Study - For many regional residents, the availability of a down payment for housing purchases is problematic. In 2019, approximately 12% overall said they have no funds available, and 18% have less than $10,000, meaning about one in three have less than $30,000. - Garfield County sales volume in 2021 was 96% higher than in 2019. The average single-family sale price increased 42% and the average multi-family sale price went up by 39%. - According to a survey of Northwest Colorado Council of Governments residents, 90% of respondents said housing availability and housing affordability got worse in 2020. - Part-time residents in the area expect to increase the time they spend in their homes by an average of 30% (1.2-month increase) in 2022 to 2025 from pre-COVID averages. - Newcomers earn much higher incomes and are in a stronger position to compete for homes than are existing residents who make their living in the community. It seems unlikely that prices will correct to the extent that year-round residents will be able to purchase market homes or compete with part-time renters and newcomers for rental housing. Affordability Gap The affordability gap is defined as the difference between the median price of a home sold and what a household (4 persons) earning the median income, using median household income definitions from the Department of Housing and Urban Development, can afford with current underwriting terms. - The increase in housing supply will help to decrease the pricing pressure. - In 2018, the affordability gap for households in Glenwood Springs more than doubled from $72,450 to $148,000. - When a household spends more than 30 percent of its income on mortgage or rent, it is characterized as being "cost-burdened." Forty-one percent of households in the Glenwood Springs area were cost-burdened pre-pandemic, outspending by an average of $326 per month. - The lack of housing affordability leads to negative impacts on a community's economic health and quality of life. Neighborhoods, schools, and a community's heritage and culture can be negatively impacted over time. Furthermore, the economic component follows a constant feedback loop that has negative consequences for the regional economy. 3 | Page Renting Is More Financially Feasible for Many "There's a lot of 'talk' about affordable and workforce-level housing in this valley, but when decent developments are presented to councils/town halls, etc. they always seem to be denied because of neighbor disapproval. The community needs to be willing to accept some amount of workforce housing, even if it's not exactly in the ideal location for each individual in this valley." Connectivity and the short-term rental and second home factors Second homes and short-term rentals* (STRs) place constraints on housing inventory and exacerbate upward price pressure on housing for local full-time residents. A 2020 report from the Colorado Department of Local Affairs, "Engaging Stakeholders on Affordable Housing in Colorado," revealed second homeowners are occupying the limited housing stock and driving up costs for locals. According to a snapshot of STRs in the 2019 Great Roaring Fork Regional Housing Study, Garfield County had more than 1,600 listings, which is more than 3% of the region's entire housing stock. The lack of inventory on the Western Slope is exacerbated by its remote location and short building seasons. The high costs of land, labor, and construction materials make new development very difficult, especially in remote rural regions where contractors are far away and developing infrastructure is costly. Employers face significant challenges in recruiting and retaining employees when housing is unavailable or too costly in their area. This impacts an employer's ability to grow or even to remain open, as well as deters potential new employers from opening in such areas, which negatively impacts the broader economy, particularly in rural areas 4 | Page Housing needs in one area easily spill over into other areas; a workforce housing shortage in one region can result in diminished availability of affordable housing in a neighboring city from which workers commute. *Short-term rentals are defined as rentals of a furnished home, apartment, or condominium for a "short- term stay." Definitions of "short-term" vary from 5 days or fewer to up to 60 days. Traffic and Commuters The City of Glenwood Springs conducted an Origin and Destination Study in 2022, resulting in data collected from where motorists were coming from and heading to. Key Findings: Between 42% and 50% of people come from western Garfield County. Motorists' origins are from Rifle, Parachute, and New Castle — those destinations that are people who are coming through Glenwood Springs and then continuing south. Of the people commuting from West Garfield County and Mesa County and heading south, 29-33% are heading to Aspen/Snowmass, 16-22% are heading to El Jebel, and about 50% are heading to Carbondale. Sources The Mountain Migration Report 2021 "Are COVID Impacts on Housing & Services Here to Stay?" 2019 Greater Roaring Fork Valley Housing Study GRFV Housing Programs/Strategies Toolkit City of Glenwood Springs Origin and Destination Study, 2022 Colorado Department of Local Affairs 2020 Stakeholder Engagement Report: Engaging Stakeholders on Affordable Housing Policy in Colorado