BUENA VISTA — Lisa Rison was walking past the pond at McPhelemy Park in Buena Vista on Labor Day hunting for a job.
She had heard that the monthly cost of her apartment, which she rents with the help of federal housing assistance, will change in 2024. The increase would put pressure on her budget — already tight because of medical expenses.
“I might have to move out because, if I don’t pay the rent, I can afford my doctor,” said Rison, 58. “I’m working through the Division of Vocational Rehab (to find a job). People won’t hire me. They want eight-hour shifts. I can’t. I had two strokes. I can’t physically do eight-hour shifts.”
Many Buena Vista residents like Rison are struggling to find affordable places to live, but housing needs are colliding with another hurdle: a looming water shortage.
One way to boost affordability is to increase the supply of apartments and homes, but those homes need water. And Buena Vista could run out of water for new developments as soon as 2030, based on its latest water assessment. This year, the town, which sits on the Arkansas River, passed a new policy that ties water use and development to specific community priorities, like more affordable workforce housing.
“If you run out of water, you can’t build more housing. But you have to build more housing for affordability, potentially, but you can only do that with water,” said Joel Benson, the town’s planning director and former mayor. “We’re trying to seek some sort of balance for the community, so that whatever water we do have is encouraging development that we need as a community.”
Buena Vista isn’t the only Colorado community facing a gap between water supply and demand. Cities, towns and industries in Colorado currently have enough water, but by 2050, they could be short 230,000 acre-feet to 740,000 acre-feet in the worst-case scenario, according to the 2023 Colorado Water Plan.
Buena Vista’s new water allocation approach is rare and the first of its kind in Colorado, said Waverly Klaw, who runs the Sonoran Institute’s Growing Water Smart program and has helped 68 Colorado communities tackle their water and land use challenges. The Sonoran Institute is tracking similar water allocation policies in northern Colorado, Knightdale, North Carolina, and Gilbert and Chandler, both in Arizona.
Many other communities are trying water conservation and efficiency measures, but some are facing urgent water supply issues. This summer, Lafayette announced abrupt water rate hikes meant to fund water projects that will help the city withstand fluctuations in its water supply.
“They’re now in a really tough spot, and their water users are paying much higher rates,” Klaw said. “I think it benefits us all to plan for community resilience, and water is just a huge element of that.”
In response, many communities are gathering more data on water use, tightening up how new developments are annexed into cities and removing unnecessary turf in favor of more water-efficient landscaping, she said.
“We’re all trying to manage what we have in the most strategic and impactful way, recognizing we don’t have unlimited supply of pretty much anything,” Klaw said.
The price of a home
Colorado is in the midst of a housing crisis: Because of rising prices and interest rates, affordability for home buyers is near its lowest point in more than 33 years and incomes aren’t keeping up with rising costs, according to the Common Sense Institute, a nonpartisan research organization.
In Chaffee County, where Buena Vista is located, average rents increased 43% since 2016, and home prices jumped 41% between 2020 and 2022, according to a 2022 report by the Chaffee Housing Authority.
To address its affordability and housing issues, Buena Vista needs more rental units and homes that vary in costs. Over the next five years, the town would need to build 200 new rental units, 60% of which should be priced at $1,300 per month or less, according to the housing authority report.
“We do not have very many rentals at all in town. Those that are available are gobbled up. They’re passed on by word of mouth, so folks that are looking more broadly don’t know about them,” said Joseph Teipel, a housing authority board member. “We really need more rentals.”
Some projects that are already in progress, like the Carbonate Street development, will provide rental units that are deed-restricted to certain affordability levels, said Teipel, who is a consultant for the project. The development’s 60 planned units are meant to be attainable for workers, although that number could change depending on funding.
“Homeownership is out of reach essentially for 91% of Chaffee County residents,” Teipel said. “That’s kind of staggering if you think about that.”
For potential homebuyers, Buena Vista would need to put 130 new homes on the market over the next five years. About 58% of those homes would have to cost between $130,000 and $345,000, according to the housing authority.
But it’s not just about supply: Building more market-rate homes isn’t going to solve the price issue. The town would need deed restrictions and subsidies to help keep prices down, Teipel said.
One recent addition to the town, the Fading West modular home factory, is helping to lower housing costs. The company launched with the development project called The Farm at Buena Vista.
Sean Dryzmala said he was the first person to buy a home at The Farm, a subdivision with 218 colorful, white-trimmed houses and apartments located just outside of the historic downtown area and slightly down the road from the Buena Vista Correctional Complex.
Dryzmala’s house cost just over $198,000, he said.
“We love it here. It’s quiet. It’s off the main highway. I felt it was affordable,” he said, looking out at the mountains from his front porch. “The view is amazing.”
He works at a grocery store in town. There, high turnover is at least partially caused by the high cost of living, Dryzmala said.
“The turnover is just a lot because there is no affordable housing yet,” he said. “Most people can’t afford $400,000 to $800,000 for a home.”
“We were going to run out”
New homes, businesses and apartments need water — and that’s where Buena Vista has a problem.
The town’s main water source is Cottonwood Creek, which flows into town from the west and pools into the pond at McPhelemy Park before joining the Arkansas River.
Buena Vista’s senior water rights on Cottonwood Creek keep the taps on even in dry years, when more recently established, or junior, water rights get cut off. Town staff look to this water when planning for future residential and commercial development.
Other sources, like the town’s junior rights on Cottonwood Creek and Colorado River Basin water purchased through the Fryingpan-Arkansas Project, are too uncertain to provide a steady supply of water for developments, said Benson, the planning director.
Based on its water rights portfolio in 2021, Buena Vista could serve a maximum of 2,526 single-family equivalents in dry years. One single-family equivalent, which locals shorten to SFEs, equals the amount of water used in a home with three bedrooms and two bathrooms, or roughly 300 gallons per day on average.
Around 2014, town staff saw 16 or so new housing units each year. In 2018, that was up to 70 new units per year.
By 2021, Buena Vista was already serving 1,810 single-family equivalents — and only had enough water left for about 700.
The town was on track to run out of dry-year water supplies for new developments by 2030, or 2038 if it started conserving more water, according to the water resources master plan. The growth was going to strain the town’s water treatment facility along with its water rights.
After years of rapid growth, town administrators said they saw the writing on the wall: “It was pretty easy to say, looks like we have this much water currently in our portfolio, and looks like at this growth rate, we’re going to run out of water in ‘X’ years,” Benson said.
A new allocation approach
The town of Buena Vista has been trying to find new water sources to increase its supply.
It’s scouring its aging pipes for leaks, which contribute to a 24% system loss, or 50 million gallons, per year. It purchased two additional water rights in the past three years, both of which were irrigation rights. The rights may go through a court process to be re-designated as municipal rights before they can be used in homes and businesses in Buena Vista, according to Phillip Puckett, town treasurer.
Buena Vista is also developing an agreement with the Upper Arkansas Water Conservancy District to purchase extra water from groundwater sources in the Arkansas River Basin.
The new water allocation policy, approved in February, is the town’s latest attempt to address its long-term growth and water problem. A related ordinance, approved in July, updated the town code.
The allocation policy takes all of the town’s available water supply and divides it among priority categories, which town staff like to call “buckets.” Each bucket is allocated for a specific purpose, like emergency use, multifamily rental housing, economic development and workforce housing.
Of about 478 single-family equivalents allocated through the policy, about 373 go into these specialized priority buckets. The rest goes into a general development category for projects that don’t quite fit into the other groups.
“Our plan isn’t to hit zero on water. … As we can afford it, and as opportunities align with town goals, we’re going to add to our water portfolio,” Puckett said. “This gives transparency to everyone involved about what the town wants to see and how we want to utilize our water resource based on what’s available to us right now.”
The town also did not want to see the rest of its water taken up by a single development, knowing there was a huge need for affordable housing, Puckett said. Some developers with large-scale projects have already reached out to the town, he said.
“We need housing of that price point now, not 20 years from now,” he said. “So this policy helps prevent a single development from buying up those water resources and sitting for an indefinite period of time.”
The new policy and ordinance changes how developers move through the approval process.
When a developer proposes a new project in Buena Vista, they have to include details about where they plan to source water for their development. Under the new allocation policy, a developer might propose pulling water from the general water bucket — the catch-all category — for 20 market-rate units.
They don’t have a water guarantee until they have their final approval in hand, a process that can take more than a year for larger projects. During the review process, general bucket water might get allocated to other projects — a risk for the developer.
The town hopes that developers will include more affordable housing or economic development goals in order to tap into the buckets of specialized water, which the town says will likely be used up more slowly than the general bucket. So instead of 20 market-rate units, a developer might include 10 affordable units.
When a project is approved and all fees are paid, the town allocates water to the new development for up to 10 years under the new ordinance. The developer has to get a building permit within that window or they forfeit their water.
Some developers have pushed back against this time limit. They’re worried that banks won’t want to loan them money for a project when that investment could be lost after a decade, Teipel said.
The allocation policy also includes criteria that trigger a re-evaluation period for the policy itself, said Teipel, who drafted the allocation guidelines while working as planning director for the town of Buena Vista.
Those triggers are vital, he said. The policy has to be updated to make sure the local economy isn’t stifled, people can still find jobs and affordability issues can be addressed. As the town’s needs evolve, the buckets need to evolve, he said.
Buena Vista is trying something new for better or for worse, Teipel said.
“It’s just so easy to treat these things as simple topics that we have simple choices as a community … and we just chose to do this water allocation policy ordinance,” he said. “It shouldn’t be assumed that because we’re the only ones doing it, it’s like, ‘Oh, BV has it figured out.’ I don’t think we do, necessarily. I think we’re still trying to figure it out.”
A housing solution? Not so fast.
The water allocation policy is just one step in a process that is going to require multiple tools, town staff said — and there could still come a day when there isn’t enough water left for new developments.
“This isn’t a fix-all. It’s not going to solve our need for affordable housing. It’s not going to guarantee us new commercial development,” Puckett said. “However, it does make sure we have water available for those priorities as well. Like it doesn’t get gobbled up in just general development, which is the avenue we were heading down pretty quickly over the last five or six years.”
Still, even with the policy to help intentionally allocate water, the town could see a day when it doesn’t have enough water for new developments. New water supplies could get hung up in court cases or slowed down while negotiating agreements, and the town might have a real-time gap between their supply and demand.
“Yeah, if the timing works out where demand keeps hitting us hard, and we don’t have the new resources online, there will be a time where, ‘Yep, we’re out,’” Puckett said. “And there is no development for a while.”
At that point, the answer to new development proposals would be “no,” Puckett said.
“Our legal counsel has made that very, very clear — that the town has no obligation to provide water it doesn’t have,” he said. “So it’s really important for people to understand that.”
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Knowing that, he encouraged developers to make sure their projects didn’t overextend themselves assuming there would be water in the future.
But in this scenario, it would also be harder to address affordable housing issues that require more, or different, types of housing. Instead of building more units, Buena Vista would need to start looking at its existing housing stock and coming up with solutions.
“We’re not going to build our way out of it. We don’t have enough resources here,” Puckett said. “Our infrastructure systems, transportation: It doesn’t support a population that would eventually bring the price point of housing down.”
More rural mountain communities will start facing the same question, he said.
“That’s not a realistic way to go about solving housing pricing,” he said. “Maybe the Front Range can, but it’s just not realistic here.”