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Housing

Housing in small Colorado towns is “damn near a crisis.” But the solution isn’t as easy as just building more.

The cost of extending roads, and water and sewer lines, and finding developers to work with them are among the biggest challenges facing towns grappling with a housing crisis.

On the outskirts of Mancos, Colorado new houses have been constructed and are under construction to meet the high demand for housing. (Dean Krakel, Special to The Colorado Sun)
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MANCOS — There’s no affordable housing in Mancos. Zero rental units. Nearly no houses on the market. The town’s school district struggles to hire teachers because they can’t find a place to live. It’s the same story with the town government, the hospital and the nursing home. 

It’s an “overwhelming issue” for the town of 1,200 people, where homes put up for sale are often under contract in hours, town administrator Heather Alvarez said. And it’s one without an easy fix: To add housing, the town is facing huge costs to buy land and start construction, something unlikely given its small budget. 

“Mancos doesn’t have $1 million or $2 million that we can just (use to) buy some land,” Alvarez said.

Across southwest Colorado, communities are grappling with a suddenly acute shortage of housing that threatens to displace middle-income workers. But the region’s small municipalities face added difficulties due to their size and limited budgets. Some are struggling to buy land, or extend the water, sewer and other infrastructure lines needed for new developments. Many can’t find builders willing to forego higher-profit custom homes and luxury units to take on their projects. 

A quiet October morning on the main street of Mancos, Colorado. (Dean Krakel, Special to The Colorado Sun)

“At the end of the day, the town doesn’t want to be in the real estate business. But we have to do something to address this basic human need,” Alvarez said. 

Mancos has taken small steps to ease the housing shortage, like applying for government grants and modifying the land use code. The town is working with the Montezuma County government to build homes in a 3-mile radius outside the town’s limits. But for now, most workers commute from Cortez, 20 miles away, where there is more housing available.

Two counties over, in Pagosa Springs, the cost of adding roads and utility lines could be expensive in some areas where the ground is full of shale or has a shallow bedrock that builders might have to blast through.

A privately owned 72-acre property at the intersection of two U.S. highways would be “ripe” for development save for the lack of almost all infrastructure, Town Manager Andrea Phillips said. Another location has utilities next door but the soil there is so rocky it would be too costly to extend them, town councilmember Shari Pierce said.

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“It’s not just all short-term rentals and it’s not just all the pandemic and people moving here,” said Pierce, a Pagosa Springs resident since 1974. “We have these other challenges.”

The obstacles don’t end once parcels of land are found. 

Pagosa Springs, for example, has earmarked land for affordable housing but struggled to get the attention of developers. After receiving zero responses to a request to build a dozen units last spring, the town this fall expanded the development to include up to 64 units on three plots of land, offered at little to no cost. It got three responses. 

“These guys are making good money right now building custom homes,” Pagosa Springs councilmember Mat deGraaf said of developers. “If you’ve ever worked in the trades,  you make hay when the sun shines. And right now the sun is shining so I don’t fault them.”

Miriam Gillow-Wiles, executive director of the Southwest Colorado Council of Governments, said the region faces significant challenges to add houses and that they vary by location. 

Ignacio is surrounded by Southern Ute tribal lands and has little space to expand its boundaries. The town of Dolores runs along a river bed with “cobbly” ground, making it expensive to add infrastructure. Mountainous areas are costly to develop because there’s hard rock, Gillow-Wiles said.

Once a ranching and agricultural community, Mancos has become a popular destination for artisans and tourists. (Dean Krakel, Special to The Colorado Sun)
“It’s hard for anyone to find anything around here to live in,” said bakery employee Alex Gentile, at the Absolute Bakery & Cafe Company on Mancos’ Main Street. “People pay premium prices for a run down trailer, if they can even find one.” (Dean Krakel, Special to The Colorado Sun)

Lack of roads, limited water sources and the cost of replacing aging infrastructure — like wastewater and drinking water treatment plants — all constrain the region’s ability to add housing.  

“Broadband is a limitation. Transportation is a limitation sometimes,” Gillow-Wiles said. “In the grand scheme of things, building a house is not hard. It’s the sheer cost and the political willpower to do so.” 

More recently, the pandemic dragging into nearly two years has thrown supply chains into turmoil, and left truck drivers and steel and other building supplies in high demand. Those issues could be compounded in southwest Colorado, where communities are located hours from major interstates and railways, and where there are a limited number of builders and contractors.

The concerns about building costs and infrastructure come as a housing shortage has seized southwest Colorado. A recent assessment found lack of affordable housing has pushed some residents to camp or sleep in cars, and left hospitals and school districts struggling to recruit workers.  

Montezuma County, where Mancos is, saw a 25% decline in the number of rentals affordable for those making half the area’s median income between 2010 and 2019. In the town of Ignacio, the median rent increased 45% while renters’ median income went up 7%. 

It’s a trend that’s played out across the region and state in the last year and a half, including in Colorado’s mountain communities.

The situation is “damn near a crisis,” deGraaf said.

When deGraaf moved to Pagosa Springs 13 years ago, housing was easier to find in the town of 1,600, where most residents work two jobs and many are in industries supporting tourism and recreation. Seasonal employees who work for river guides or for the U.S. Forest Service sometimes camped on public lands as a novelty and a way to save money, he said. 

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But the pandemic took the issue of housing from “simmer to hard boil real fast,” he said. More people are camping out and seem to be motivated by necessity and a sense that “I have no other choice,” deGraaf said. 

“That’s just unfortunate to live in one of the greatest countries on the planet, and we are having these more developing-country-type issues right in my backyard,” he said.

The housing shortage has left people like Amanda Gadomski “jumping from rental house to rental house with multiple roommates.” After moving in 2014 to Pagosa Springs to open a store offering bike tours and outdoor gear rentals, the 35-year-old lived in a home with her three business partners. Later, she paid about $400 for a “crumbling apart” rental she shared with a firefighter.

Gadomski has been looking for a house to buy, but there’s nothing she’s found close to her price range except older mobile homes. The maintenance and structural integrity of those homes gives her pause. 

“I don’t make that much as a business owner, because a lot of my money goes back into my business,” she said. “So I’m going to have to be looking for a rental that is affordable just for an individual. And I think that gets harder and harder.”

Officials look for possible solutions

Local officials are trying to add housing and to incentivize builders to work with them. 

The Pagosa Springs town council may set aside $550,000 in the upcoming budget for housing. A developer is converting the Pagosa Springs Inn & Suites into a housing complex with 98 units, 25% of which will be income-restricted. 

Kierin Poore (L) and Joann Granados work on a construction project for their Building Trades class at Pagosa High School. The class plans to build at least one shipping container home this year for use for teacher housing. housing. (Dean Krakel, Special to The Colorado Sun)
Building trades instructor Torry Hessman works with his students on a framing project at Pagosa Springs High School. The class plans to build at least one shipping container home this year for use for teacher housing. housing. (Dean Krakel, Special to The Colorado Sun)

The town council also recently limited short-term rentals, which residents and officials believe have contributed to the housing shortage and changed the feel of neighborhoods. 

Archuleta County, where Pagosa Springs is the largest town, saw the number of short-term rentals increase 87% between 2018 and 2021, according to the recent housing assessment. About 16% of dwellings in the town are or would become short-term rentals as of this summer.

Mancos has also put in place a moratorium on short-term rentals.

Elsewhere, local officials are combing through land use codes and their own planning review processes to make it easier for developers to build. Some are starting to offer financial incentives, like chipping in to cover adding infrastructure, or may use federal relief funding to pay for extending water, sewer lines and adding roads. 

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La Plata County received $10.9 million in stimulus dollars and may use some to help with infrastructure. The county also is trying to revive a regional housing authority that could float bonds and help coordinate efforts across towns including Durango, Bayfield and Ignacio. 

“I can’t go to the grocery store without having somebody tell me that there’s a problem and we need to get busy fixing it,” La Plata County Manager Chuck Stevens said of the housing crisis. He recently pushed back a new employee’s start date due to lack of housing. 

“He’s coming from the Front Range,” Stevens said, of the employee. “He can’t find anywhere to live.”

(The applicant “never did find housing” and eventually declined the position, Stevens said.)

The region might work together to address the housing shortage. 

The Southwest Colorado Council of Governments is trying to find a developer that will build affordable housing across towns and counties and on multiple plots of land — overcoming potential disinterest with small-scale projects. The hope is to draw builders by creating an economy of scale, streamlining the process so they don’t have to get clearance from multiple boards and commissions. 

Montezuma County officials want to recruit a housing manufacturer to set up a factory in Cortez, the county seat. The goal is to bring jobs and needed building materials to an area that has a big, if little noticed, demand for housing. 

To do so, Montezuma County officials have to overcome the idea that they’re “in the middle of nowhere,” said County Administrator Shak Powers. 

“We don’t have any interstates. We don’t have any rails. We don’t have any major airports, we don’t have any shipping docks,” Powers said. 

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But a modular home factory there could cut down on travel time and costs needed to plug housing shortages across the Four Corners region. The county is close to the Navajo Nation reservation, which covers a more than 27,000 square mile swath across Arizona, New Mexico and Utah and that needs about 30,000 houses, according to news reports and officials in Montezuma County. 

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“Those are being built somewhere so we’re like why not build up here?” Cortez Mayor Pro Tem Rachel Medina said. 

Cortez has become a refuge for workers in neighboring towns and counties who can’t find affordable housing nearby. But Powers said there’s a limited supply here too.

Driving through Cortez one morning, Powers pointed out gravelly mobile home parks as examples of where workers live. In another neighborhood, he stopped outside a modest one-story structure with a law enforcement officer’s truck parked curbside. 

“You see how tiny these apartments are?” he said. “As the county administrator, I’m embarrassed that that’s all their wages allow.”


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