The most significant issue the regional economy faces is a declining workforce and challenges in employee recruitment and retention due to an affordable housing shortage in both the rental and for-sale markets. Without affordable units; local businesses struggle to meet their staffing needs and operate sustainable businesses. The impact is felt across incomes; even employees earning six figures are now struggling to find housing affordable to them. This is because La Plata County has never had a more unaffordable housing market. The COVID-19 pandemic slowed construction while out-of-area remote workers competed for limited housing stock and drove up the costs of housing for the local workforce. Exacerbating the housing crunch was an increase in construction pricing and rising interest rates.

As of October 2023, the Median Single-Family Residential (SFR) Sales Price was: $791,000 and was up 28% year-to-date. Although rental data is more difficult to obtain, there is significant anecdotal evidence that rents are as high as $1,500-1,800 a month for studios, and over $2,000 for two bedrooms which are in much higher demand. 

Fortunately, the region has a Three-Year Workforce Housing Investment Strategy (Updated 2024), a pipeline of below-market housing developments, and several opportunities to apply for new state funds. The passage of Proposition 123 in 2022 created a new $300-million-dollar state housing trust fund which became available to projects in the fall of 2023. All local governments in La Plata County opted in for Prop 123 and will have the opportunity to apply for these new state funds for housing projects.

What is Affordable Housing?

• Standard Definition of Affordable Housing –Households pay no more than 30% of their income on housing costs
• When housing costs exceed 30% of income = housing cost burdened
• When housing costs exceed 50% of income = severely housing cost burdened
• Affordable Housing 101

What is Area Median Income (AMI)?

• Area Median Income (AMI) accounts for the typical income in a specific housing market and compares needs across markets/regions.
• La Plata County AMI Charts

What is Gap Funding?

• The rents/mortgages that low- and moderate-income households can afford to pay are often too low to cover the full costs of development property. The gap between the funding needed to develop and operate a property and the revenue available is called the affordable housing funding gap.
• To fill the gap, developers usually need help in the form of a subsidy. The subsidy most often comes from local, state, or the federal government, but it can also come from other sources.
• The Basics: How is Affordable Housing Funded?

What Types of Subsidies Are Used to Help Fill the Affordable Housing Funding Gap?

• Low Income Housing Tax Credits (LIHTC)
• Private Activity Bonds
• Federal Historic Tax Credit
• State Tax Credits
• State Historic Tax Credits
• Grants and other subsidies
• State grants, subsidies, energy funds, loan funds, and tax incentives
• Land donations
• HOME Investment Partnerships (HOME) Program
• Community Development Block Grant (CDBG) Program
• Deferred developer fees
• Federal Home Loan Banks (FHLBs)
• Affordable Housing Program (AHP)
• Local grants
• National Housing Trust Fund Foundations

What Does Ready to Proceed Mean?

• Readiness to Proceed is a technical term used to refer to a development project being read to receive a funding commitment. Although each funder can have slightly different requirements or information requests; there are several activities and documents that are standard for public funding applications.