with units selling at a price far lower than how much it cost to build them . The two-bedroom units , which cost about $ 550,000 to build , are listed at $ 279,000 , and the three-bedroom units are listed at $ 329,000 , with a build cost of $ 600,000 .
“ If we had listed them for market rate , there ’ s no way they would sell here ,” she said .
The City is targeting income of 80 % to 140 % of the annual household median income for the county , where 100 % area median income is $ 94,200 for a household of four , Scott said . Many local residents were surprised that the median annual income was that high , but jobs at the power plant and the coal mines pay much more than that , she added .
Housing affordability
Many communities are wrestling with housing development , which can be complicated and filled with a long series of problem-solving exercises .
“ Local governments tend to be riskaverse , and real estate development is inherently risky , so it can be really challenging ,” Scholl said .
In the Craig project , the interest rate was 3 % and construction pricing was reasonable when the team started the project , Scholl said , but the rates increased to about 6.5 % by the end of the project , and , like the rest of the country , the builders were hit with some of the largest inflation hikes seen in decades . At the same time , the grant funding required the homes to be sold at a price that wouldn ’ t exceed 30 % of the total housing costs , which is the national standard for affordability . As the interest rates increase , the purchase price increases and that limits people ’ s ability to invest in housing . The mortgage programs and payment assistance the Colorado Housing and Finance Authority offers are only so helpful . Smaller , rural communities are often passed over for housing development because of the high costs , which far exceed people ’ s ability to pay . As a result , communities are having to become more active in the housing development market , but they often lack the know-how or capacity to take on challenging projects and assume private developers will just be drawn by the quality of the community .
“ If developers thought your community was financially attractive , they ’ d be there already ,” Scholl said . “ Developers are like water ; they ’ re going to follow the path of least resistance . They ’ re going to go where they can make money .” Much of Ayres ’ work with rural communities is guiding communities to take on the housing challenge themselves and become their own developer . With Craig , the City set up the housing authority to act as the developer , but the housing authority didn ’ t have funding beyond the support provided by the City , which meant Brixius had to take on the role of leading the housing authority in addition to being city manager . Scholl admires Brixius ’ and the City ’ s willingness to lead . Many communities don ’ t want to take on the risk , but this team was up for it .
Scott said other communities that are working to develop more housing need to search for grant opportunities , which can even include grants that will fund a housing assessment , a crucial component of such projects . The City ’ s housing needs assessment provided the evidence grant providers sought .
“ Completing a housing needs assessment is the first crucial step in the planning process in order to initiate any type of housing development ,” she said .
www . AyresAssociates . com 7