WINTER PARK, Colorado – Somewhere between breathtaking beauty and the hustle and bustle of business, you’ll see it: a small town getting a little bigger. Across Winter Park, the noise of construction can be heard in the distance as the city expands to try to accommodate all of its residents.
Like other mountain communities, Winter Park is facing a home affordability crisis that has been exacerbated by COVID. In addition to a previous housing shortage, more and more distant workers are moving to the region, putting even more strain on the housing stock.
“The market has skyrocketed and this has essentially created a scenario where our housing inventory is not accessible to any of our local workforce,” said Winter Park Mayor Nick Kutrumbos.
The city council did not declare it an official emergency, but Kutrumbos says it is a crisis that will require local, state and federal solutions.
The housing shortage is so severe that businesses are forced to adjust their hours or close a few days a week because they cannot find employees to work. Kutrumbos is concerned that this could quickly become a health and safety issue that could impact response times in an emergency.
In an effort to help, the city has annexed some areas, almost doubling in size over the years, and it has put in place mechanisms to negotiate with developers on certain lots. Kutrumbos attributes foresight to city councils 15 to 20 years ago.
The current city council is considering changing its building codes and designs for new projects. He also set up the Winter Park Housing Assistance Fund with the help of the Great Foundation, which reduces the rent of certain residents by $ 400 per month.
This money goes directly to the landlord for up to a year before the tenant has to reapply for the program. Almost 400 families were able to benefit from financial assistance during the current application cycle.
The city is also moving forward with an emergency ordinance to deal with short-term housing in the area. He formed a short-term rental panel two years ago to investigate the matter further.
City council has committed $ 325,000 to a program that would try to encourage homeowners to convert their short-term rentals (like AirBnB and VRBO) into long-term rentals for people living in Winter Park. The city council hopes that it will be enough to accommodate at least 40 workers.
“What we’re trying to do is compete with short term rentals. In Winter Park, I would speculate or guess that over 80% of our housing stock is in the rental market, ”Kutrumbos said.
For a studio or one-bedroom home, the current city plan is to offer homeowners up to $ 5,000 for a six-month lease or $ 10,000 for a 12-month lease.
For a two or three bedroom home, the current plan is to offer homeowners up to $ 10,000 for a six month lease and $ 20,000 for a 12 month lease.
City council doesn’t want to ban short-term rentals as there aren’t many hotels in Winter Park and the city needs short-term rentals to help attract tourism.
“We know we want them and we need them. We don’t want to take them all away, we don’t want to limit them just yet. But, I think the dollars and the incentives offered by this program will be enough to make people think twice, ”Kutrumbos said.
City is reportedly asking realtors to help by advertising the program to anyone who buys property from them
The money to pay for the program will come from the general city fund. According to Kutrumbos, if Winter Park fails to resolve its housing issues, businesses will close and the city will lose revenue regardless.
However, some are concerned about the message this decision will send to current owners of long-term rental housing.
David Jamison is a real estate broker in the area and says he has seen the number of long-term rental units start to decline rapidly.
Jamison attributes the decline to two factors: a booming housing market where homeowners can sell properties for much more than they originally bought them and a growing number of people moving to the mountains thanks to the prevalence remote work.
He doesn’t think housing affordability issues are new, but he does believe COVID is exacerbating the problems.
While he acknowledges the city needs to do something to help, he fears homeowners who have already made long-term rentals will feel disappointed, but city council with the emergency ordinance.
“Definitely, this will cause a lot of people who are already doing long-term rentals to wonder where their city paycheck is,” Jamison said. “How do you pay people who have been doing it for 20 years? “
Some short-term rental owners also might not like the fact that they won’t be able to access their home for a visit.
The emergency ordinance also does not limit the amount that landlords can charge for these rentals, meaning that homes are not necessarily more affordable.
The city has received positive feedback on the idea and plans to launch a website with program details in the near future. The program will last for a year but could be extended in the future.
The approach of a company
As Winter Park tries to entice homeowners, Mountain Parks Electric, Inc. is taking matters into their own hands. The 65 employees of the electric cooperative serve approximately 22,400 customers in Grand County.
Mountain Parks Electric has struggled to recruit qualified employees in the area due to housing affordability issues. Previously, the cooperative wanted its employees to live within 30 minutes of the office.
In recent years, however, it has increased that radius to 45 minutes, potentially lengthening the time it takes to respond to an outage.
In addition to COVID and other remote workers, the East Troublesome fire has also strained the housing market in the region. The fire destroyed more than 300 homes north of Winter Park.
Two of Mountain Parks Electric’s employees lost their homes in the fire and several others were displaced due to the damage. The fire has made an already tense real estate market even more tense.
“A lot of the displaced people, others who owned homes, have now had to find housing to rent while they rebuild their homes,” said Scott Simmons, deputy general manager of the co-op.
In an effort to help, the company decided to sell a piece of land it has owned for over 30 years to invest the money in employee housing.
Mountain Parks Electric had originally purchased the 2.7-acre land for about $ 60,000 with the intention of using it for a substation.
Over the years, however, Simmons says the co-op determined that a substation in this area was not feasible.
The land is now in the process of being purchased for approximately $ 1.25 million.
“We will use the money either to build housing for our employees or to buy existing housing,” Simmons said. “We would like to have some kind of a program where we can help people buy a house. “
The company plans to set up an endowment fund with the proceeds from the sale to help employees.
In all mountain communities, the availability and affordability of housing are becoming major issues. Cities and even individual employers are trying to help solve this problem, knowing that it will take years of effort and a number of ideas to really solve the problem.