Future Affordable Housing
By Marc Donadieu
Glacier City Gazette
While most people acknowledge shortage in Girdwood affordable housing, how to address it is another matter.
Turnagain Arm Service Coalition (TASC) is in early stages of funding a market study for Girdwood Family Village that could lead to a proposal for affordable units in a multi-use building.
In conjunction with TASC, Girdwood 2020 held the fourth and final lecture of its new annual series. The presentation began by Grace Pleasants introducing three residents to explain housing challenges in Girdwood Valley from different perspectives.
The first was homeowner Dale Goodwin. Ten years ago, she and her husband bought a former marijuana grow house to fix up. They did much of the work themselves on a slapped together ‘80s house. The wiring and plumbing needed replacing.
“When we got there,” Goodwin said, “it had a plywood floor, broken windows, serious lime green bedrooms and a lot of shelves for the plants.”
Next up was recent renter Jessica Szelag who moved to Girdwood six months ago and is a Seattle homeowner. She has an urban planning background and had been studying the Girdwood rental market for a year before moving here.
As she and her husband were new to town, they had to take what they could get through Glacier City Realty because little was available. Their lease is up in September, and they need to plan their next step to either buy or find a new rental. Szelag said there is not a lot of variety in rentals but there are decent 1 to 2-bedrooms places with newer construction units going for $1,900-2,200 a month, excluding utilities.
“We’ve looked at dry cabins,” Szelag said. “We’ve looked at the poorer, older construction. We could go there if we wanted to, but it’s not a great place to be when you know you have to move but there are not a lot of options.”
Szelag said lack of affordable housing options results in people living out of cars and motels. She also said a more lucrative short-term rental market removes units that could be affordable housing.
“I don’t think Girdwood’s real estate market is at a point yet like Breckenridge and Vail are,” Szelag said, “but what I know about those places is that they were kind of caught off guard. When the economy came back after 2008, workforce housing was snatched up quickly by out-of-towners, or second home properties or people that held on to property because AirBnB and VRBO makes it an attractive option.”
The last resident to speak was Craig Schubert, owner of Schubert General Contracting. He has been in residential building for almost 25 years in Girdwood. He said there is a cost increase ranging from 5-20% in Girdwood stemming from bad soils and higher labor costs due to commuting. Schubert noted a difficult climate that features rain and snow during building season. The rain and freeze cycle is tough on houses, wearing them down. There is also a lot of rot due to the moist climate.
Schubert identified a key problem he encounters. “With the city,” he said, “we have land use planning as opposed to a Title 21 to inspect. We don’t have any inspections going on in Girdwood for new construction or an old remodel. Some people may see that as a positive, but as a builder, I see it as a negative. You end up with poorly built houses. You get homeowners who lose money because they don’t know what they are buying because it hasn’t been looked over by somebody who knows whether it was done right or wrong.”
The main speaker was John Warner, former mayor of Breckenridge, Col. from 2008-16. He was instrumental in promoting a variety of affordable housing projects in Breckenridge and continues to do so. He brought a lot of insight as a resident in a ski town of 4,500 residents with a limited amount of developable land, high housing costs and heavy road congestion. Warner also recognized the impact of vacation rentals on the affordable housing market because they can rent for much more.
Warner pointed out the similarities between Girdwood and Breckenridge, which was a mining town that became a ski town. Breckenridge is surrounded by mountains and has one of the busiest ski resorts in North America. Heavy traffic and gridlock are staples around 23 days a year, causing problems for residents and visitors. However, all neighborhoods are connected by a free bus system.
Breckenridge is reaching its maximum limits for real estate development, and estimates indicate it will be out of usable land by 2023. The town is surrounded by U.S. Forest Service land, with the only developable property on a limited valley floor.
“It’s one of those things that you get what you wish for,” Warner said. “In 2023, I don’t know what real estate prices are going to look like. It will probably be very expensive, but they are hideous now. In 2005, you had to make $54 an hour to afford an average priced home in the town of Breckenridge.”
In 1996, Breckenridge recognized a housing shortage, so public policy was implemented to create affordable workforce housing for the benefit of the community. The town had a number of successful projects buying and developing property, working with private developers, and enacting development code to support workforce housing.
“It has taken 20 years to get where we are at right now,” Warner said. “It’s 20 years of political will. It’s 20 years of finding revenue to build affordable workforce housing. It all started with the master plan to cut down our density because we didn’t want our community to be so crowded and so congested.”
Breckenridge had a variety of options at its disposal. The first project bought a lot in a central location that used to be the bad edge of town. In 1998, Breckenridge opened its first rent controlled, affordable workforce housing rental complex consisting of 74 units. The Area Median Income in town is $58,000, and the price of the units is set for people who make within 83% of figure, which means it works for people earning $45,000 a year.
“It was a niche that needed to be filled,” Warner said. “This place has been at 95% occupancy for 19 years. It has served a great purpose. It’s now on a good road with bus service. It’s a block and a half from the recreation center. It’s a block and a half from the main grocery store. It’s a block and a half from the county jail, so it’s very centrally located.”
Warner cited the Wellington Neighborhood as another example. The project was driven by a private sector developer and guided by Breckenridge’s development code. Eighty percent of all developments must be deed restricted to be within Breckenridge boundaries. The deed restriction places a three percent appreciation cap on property sales.
There is also a capital improvements cap. “If you buy a deed restricted unit,” Warner said, “you can’t improve it more than 10-15% of the purchase price, depending on the project.”
To incentivize the projects, Breckenridge pays for permit fees and water taps, which can be $10,000 each. The town reviews projects and applies incentives to a developer depending on the plan. Sometimes Breckenridge buys land, and other times it does not. While the town’s norm is7-8 units per acre, there is greater density allowed at 11 units per acre for affordable housing. Warner cited the benefits of denser housing.
“Density can be good if it’s designed well, thought out well, close to good transportation options,” Warner said. “We also like to mix the housing up. These neighborhoods are not just projects. They are neighborhoods where people like me, a dentist, can live or a real estate agent. Teachers live here. Ski area employees live here. The whole community is represented in these neighborhoods.”
As Warner’s presentation concluded, he summarized the positive impacts affordable housing has in a community with a finite amount of developable land. He said Breckenridge now has more families and child care. There is decreased commuting that saves 100,000 miles a week and less traffic fatalities since 47 percent of workers live in Breckenridge. He also said affordable housing is good for businesses and local spending, which leads to financial and social paybacks.
During the Q&A afterwards, John Gallup asked if there were any Breckenridge housing projects that included units for lower wage workers that are essential for resort towns to function.
“Regarding entry level people,” Gallup asked, “the lift crew and the table servers, do these programs reach down far enough to get them?”
“Nope,” Warner said, “they really don’t. We’re not there yet.”