Housing

Summit County Colorado Housing

Housing Element


Introduction

As of 2001, there were more housing units in the County (over 27,000) than there were permanent residents (24,330) (source: Summit County Planning Department estimates). Thus, on the surface it would appear that there is a huge surplus of housing units (given that on average 2.5 persons reside in one housing unit). However, the accessibility to that housing supply is limited by a number of factors because of the dynamics of the County’s resort community. These factors include:

• Second home ownership and use for short-term rentals.

• Escalating housing costs in relation to wage increases.

• Residents over-burdened by high housing costs.

• Lack of “affordable” housing inventory for lower income households.

Occupancy and Second Homes

It is estimated that 55 percent of the housing in the County is owned and occupied on a seasonal basis by second homeowners. Some of these second homes are rented while they are vacant and some are not in the rental pool. However, in either case, the vast majority are only available as short-term rentals for visitors. Thus, over half of the housing inventory is not available for long-term rentals to permanent residents. Some of the other housing stock in the County is lodging units, which are also only available on a short-term basis. As a result of these and other factors, only slightly over a third (37 percent) of the housing stock in the County is occupied by permanent residents. Location and cost of housing directly affect the ratio of permanently occupied housing units versus seasonally occupied units (see Table 1). About 75 percent of all housing units in the Town of Breckenridge are considered vacant, while permanent residents occupy approximately 70 percent of the homes in the Town of Silverthorne.

Housing stock increased at an annual rate of close to 5 percent between 1995 and 2001. The majority of the County’s housing stock is located in unincorporated areas (55.7 percent). The Town of Breckenridge has the most housing stock of the towns (19.2 percent of total County stock).

The majority of the County households are comprised of families. Couples, couples with children, and single parents with children make up about 55 percent of all households. Adults living alone (21 percent) or with unrelated roommates (20 percent) each constitute about one-fifth of county households (source: Housing Collaborative Residential Survey, 2000).

Housing Costs

The County’s many amenities have made it an attractive location to live or own a second home. That attraction has resulted in a rapid escalation in housing prices. This makes it difficult for many permanent residents to afford the purchase of a home in the County. Housing costs have increased at a faster rate than median household incomes. The average sales price of all housing types in the County grew at an annual rate of nearly 18 percent from 1990 though 2000. However, during the same time period the County’s median household income only grew at an annual rate of 7 percent. Thus, there is an increasing gap between salary earnings of permanent residents and the cost of housing. Table 3 demonstrates the rising cost of all types of housing units in the County. The median sales price of a single family home in 1990 was $115,800. By 2000, the median sales price of a single family home had escalated to $379,500. The median sales of all housing units jumped from $84,500 in 1990 to $254,000 in 2000, a 200 percent increase. The highest median sales price for single family homes in 2000 was $683,950 in the Town of Breckenridge (compared to $154,000 in 1 990—a 344 percent increase).

National standards consider housing to be affordable provided that the rent or mortgage payment is less than 30 percent of the household’s gross income. On average, the County’s households spend 22.6 percent of their income on their rent or mortgage payment. Renters spend more on average than owners for their housing, 24.4 percent compared to 21.1 percent. Survey results show that just over 27 percent of renters and 17 percent of owners are cost burdened (pay more than 30 percent of gross monthly income on their housing payment). However, research shows that wages among employees covered by unemployment insurance have increased steadily through the last decade, e.g., 6.14 percent from 1996 to 1997, 7.42 percent from 1997 to 1998, and 6.39 percent from 1998 to 1999 (source: Summit Housing Needs Assessment). For approximately the same time period the annual rate of increase for the cost of for-sale housing almost doubled these wage increases. The average annual increase in cost of for sale housing was 13.6 percent each year from 1998 through 2000.

There is a direct correlation between income levels and the percentage of income that is spent on housing payments. The lower the income, the higher the percentage of income that goes toward monthly rent or mortgage payments. Households with incomes below $20,000 per year spend an average of 43.1 percent of their income on housing. This compares with 12.7 percent for those with annual incomes of $150,000 or more. Nearly 80 percent of the households with annual incomes of less than $20,000 are cost burdened.

While costs of goods and services in the County are comparable to national averages, the cost of housing far exceeds average housing prices in the nation. The tables below compare housing and other costs of County residents to the “Standard City” U.S.A. (based on mean costs in 160 metro areas nationwide).



Summit Housing Authority

The Summit Housing Authority is a non-profit organization dedicated to the provision of affordable housing to workers and residents of the County. The Authority both advocates for new affordable housing projects and builds affordable housing projects. Examples of the Authority’s projects include the Ophir Mountain townhomes near the County Commons in Frisco and the Gibson Heights project off Reiling/French Creek Road in Breckenridge. The Authority is also involved in a number of programs that assist County residents in acquiring homes, including first-time homeowner education and downpayment assistance programs.

Commuters and Employment

The cost burden of housing in the County has been great enough that some employees in the County live in an adjacent county and commute to work. Every day hundreds of commuters travel from their homes in areas such as Kremmling, Alma/Fairplay, and Leadville to work in the County. It is estimated that 18 percent of the employees (approximately 3,286 workers) in the County commute from homes outside of the County (Source: Summit County Housing Needs Assessment, 2001). Of this number it is estimated that between 25 to 50 percent would move to the County if affordable housing were available.

There were approximately 1,200 unfilled jobs in the County in 2000 (Source: Summit County Housing Needs Assessment, 2001). A primary reason for this labor shortage was lack of affordable housing. In a survey of employers, the primary reason estimated for employees leaving a job or declining a job offer was due to housing (935 jobs affected), followed by transportation (408 jobs) and day care (288 jobs) issues.

Inventory of Affordable Housing

A number of housing projects have been built in recent years with the billing of being “affordable projects.” These projects have typically provided affordable rates to the first generation of home purchasers. However, without limitations on resale, the value of the units quickly escalates beyond that which is affordable to many County residents. A technique used more frequently today is to deed restrict a unit so that there are caps on the resale price of the unit, ensuring that the housing continues to meet affordability guidelines.

The Summit Housing Authority, in collaboration with the towns and the County, have established parameters for “affordability.” For example, deed-restricted “affordable” housing units are allowed as free density in many areas of the County. The County typically requires the following (Summit County Land Use and Development Code, Section 3202.02 C.2.d.i.):

“Development of housing where the average sale price or rental rate of the units does not exceed affordability limits (as most recently determined by the Summit Housing Authority) for families and individuals at or below 100% of area median income, provided that the Summit Housing Authority or similar agency has an interest. The sales price or rental rate of some of the units may be set as high as 120% of area median income as long as an equal number of the units are priced at 80% and the projects, as a whole, maintains an average at or below 100%. There shall be no income test for persons desiring to buy or rent an exempt affordable housing unit, however the occupancy of the units are restricted to persons who reside and are employed within Summit County. Persons who buy an exempt affordable housing unit may rent the unit as long as it is rented in accordance with the provisions of this section of the code.

Restrictions on the sale, resale, rental and occupancy of exempt affordable housing units must be guaranteed through a deed restriction, or other mechanism acceptable to the County, for a minimum term of 99 years.”

Some of the major businesses in the County provide housing for some of their employees. Both Keystone and Copper Mountain resorts are required to provide housing for employees in their Planned Unit Development approvals. The units provided are required to be deed restricted, or otherwise encumbered, so that the units are only available to employees.

Another opportunity for typically affordable living is found in accessory apartments (sometimes also called accessory housing units or “mother-in-law apartments”). The apartments are relatively small in size and contain a separate kitchen area from that found in the main single family structure. The apartments provide a long-term rental option to local residents and provide a source of revenue to the landowner.

The County allows for accessory apartments in single family neighborhoods with approval of a conditional use permit. The maximum size allowed for an accessory apartment is 900 square feet, or 45 percent of the principal single family structure, whichever is less. There is currently a restriction that no more than ten percent of the lots in a subdivision may have accessory apartments and that accessory apartments must be spaced at least 500 feet apart unless trees or other buffering provide a visual screen between apartments. Accessory apartments in the County are required to be attached to the principal single family structure or located above a detached garage (on lots greater than 20,000 square feet). The property owner is required to live either in the principal structure or the accessory apartment. The accessory apartments are available only for long-term rental (i.e., minimum of six months).

The use of accessory apartments varies by location. Older subdivisions with a high percentage of locals (e.g., Dillon Valley, Silver Shekel) appear to be the most popular area for accessory apartments as they help supplement local family incomes. Newer subdivisions that cater primarily to second homeowners rarely incorporate accessory apartments because extra income generation is typically not a primary motivation of the property holder. There are currently 100 accessory apartments that are approved in unincorporated Summit County. This inventory does not include numerous illegal apartments created without County approval.

Most of the towns in the County also allow accessory apartments. There is typically a size limitation (maximum from 850 square feet in the Town of Frisco to 1,200 square feet in the Town of Breckenridge) and the apartments are either allowed outright or through a conditional use permit. One interesting distinction is that the towns do not cap the percentage of properties in a subdivision that can have accessory apartments.

Projected Needs

The Summit County Housing Needs Assessment, a report prepared in 2001 to identify housing needs in the County, identifies that there is a need for between 1,067 and 1,547 housing units for permanent residents in the County (2001 numbers). The report identifies that need for affordable housing is most critical in terms of home ownership. The report indicates that there is currently an adequate stock of renting units to meet various income bracket needs in the County, with the exception of the very lowest income bracket. However, the needs for home ownership are not being met.

About 12 percent of all households in the County earn between 51 and 80 percent of the area’s median income (AMI), but only 3.2 percent of the for-sale housing inventory is priced affordably for that group (30 percent or less of total monthly income towards housing). About 10.6 percent of the households in the County earn between 81 and 100 percent of the AMI, but only 9.7 percent of the for-sale inventory is considered affordable for that group. Finally, 11 percent of County households earn between 100 and 120 percent of the AMI, but only 17.2 percent of the total for-sale inventory is affordable to that group. The Housing Needs Assessment recommends that the Summit Housing Authority and local jurisdictions should direct their resources of for-sale affordable housing in the following ways: 1) 50 percent of the resources should go towards housing for household incomes of between 51 and 80 percent of AMI; 2) 25 percent of the resources should be targeted towards household incomes of between 81 and 100 percent of AMI; and 3) 25 percent of the resources should be targeted towards households between 101 and 120 percent AMI.

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