Real Estate Crash thread

[AdironRider]

The problem is the math doesn't shake out based on all the other requirements those small mountain towns place on new builds for them to become LTRs.

I'm not a fan of airbnbs but lets be real here, this is a thinly veiled moratorium on building any new units that aren't of the approved, mountain mansion I got mine and fuck you variety.

[summit]

I'm completely confused why the businesses in these mountain town HCOL locales don't just increase the wages paid to labor so that they can either cover their housing costs or transportation costs to live farther away.

Aren't you just subsidizing the externalization of a business cost and poor financial decisions of people who can't actually afford to live in these places with public dollars?

Nail. On. The. Head.

This is the real problem. We have a sales tax and property tax that locals pay, directly and indirectly, to create the housing funds to subsidize a workforce for the tourism industry. Those funds should be solely from lodging and lift ticket taxes.

[Kevo]

It's not surprising. Planning for development was at the heart of a very nasty culture war here during the 2004-2008 boom. At the end, as things began to go totally sideways, a new administration issued a temporary moratorium on new subdivision permits. Within hours, a near riot ensued as hundreds of enraged protesters went down to the county offices and started screaming "don't regulate our prosperity!".

We had something insane like 10,000 undeveloped lots in approved subdivisions. Entire developments were going bankrupt left and right. I can't remember the exact number of "zombie subdivisions" but it was ridiculous. And these dildos were convinced, violently certain, that the problem was too much regulation and not enough development.

What killed the goose that laid golden eggs?

Greed.

That story sounds very on brand for Teton Valley.

There are so many "the free market will solve everything and any governance is bad" true believers. It so different than even the right wing politics that I grew up around in Texas. Texas conservatives are willing to pay taxes for things that benefit themselves, their family and their neighbors so long as it doesn't turn into a handout for someone somewhere else. They are also generally OK with land use regulations- they've fought too many battles (both literally and figuratively) not to. Right wingers here in TV are convinced that any regulation at all is an infringement on their liberties.

[neckdeep]

The legislation refers to my area as a "RURAL job center" with a population of about 1000 people

So why are we talking about big city values for rural areas? Why are we talking about metros and mountain towns like they should be on the same ethos? Why are we trying to make everything big city dense and all this other shit that applies to metro areas with millions of people that are built out such that people literally want to get out of and away from that because it isn't desirable but might be necessary in those cities that have 1000x more people?

Ha. That's like saying Jackson is a small town because it only has 12,000 population. A bit farcical given the 2.5 MILLION who are just visiting over the course of a year. The Rockies resorts towns see appx 25 MILLION skier days over a 20 week season! Those are big city numbers.

I guess the visitors and all the services they require doesn't factor in for you. BUT, you don't get to have a convenient ski resort nearby without tourism and the service industry workers that requires.

If you are sitting on huge appreciation on your ski town house, it didn't occur in a vacuum. That's tourism. You didn't build that. Maybe things were better in the past but you are now surfing on the wave of worker misery. Be prepared to kick something back in property taxes. Jackson has a population of 12,000 but those lucky few require another 10,000 people to drive in every day to keep the town running and their property values sky high.

[alpinevibes]

In cities yes, not that is NOT true in the mountains. It is a different set of problems causing the worker housing shortage.

I've outlined the difference in the source of the problems in the mountains being different than the cities: in the mountains it isn't a lack of building nor a lack of land that is the problem. The problem is insatiable demand from a world market for second homes, remote workers, and STRs vs high build costs. That is why the mountain towns are pursuing a strategy of building subsidized deed restricted MDUs.

This legislation doesn't help with the mountain specific problems, forbids local concerns and community cost considerations, and explicitly prohibits the solutions desired by the towns. THIS is what I mean by centralizing control.

This.

Land use is currently controlled locally. The law takes that power and lets the state decide what the land use rules are, what consideration and impacts and rules around it matter. It prevents local governments from considering whether building units is appropriate for things like parking, water consideration, neighborhood character, transit, or deed restrictions. No community control is permitted in solving their housing problems. Nevermind if the state imposed solution won't solve the problem.

And this.

You are right that Denver mayor is against the law. Although he agrees with the goal of the law, he doesn't like losing power to the state.

That's the fundamental issue - not that hard to digest.

To be clear: *all* 15 of the resort communities in questions are trying to deal with housing/affordable housing as their top priority right now. It's not as-if they're dragging their feet or are unaware or are unwilling to act to change the situation. But bringing the state in and removing a communities ability to guide itself to the right outcome is not a great solution. ADU's and Water are not the top-level issues but they are examples of how this won't play out properly in the long term.

Yes the demand is effectively insatiable (barring a massive economic decline) when the impact and ability of global money to own and exclude real estate in these communities is well beyond the capabilities of the local municipalities themselves. The municipalities need to have the ability to regulate and balance elements of the future build-out, along with restricting the ADU and/or STR situations, as those will provide little-to-no benefit to the community. Condo median price per sq ft here is $2,500 currently. That number alone precludes realistic solutions from having any chance of starting from a free-market, non-deed restricted, no-local-oversight construction reality. The cost of construction alone (let alone the dangling potential profits seen by STR hopefuls) will inevitably push an unregulated ADU towards STR-type rentals in most cases.

[schuss]

Further illustrating the above point, in my area there is well over 200 acres of undeveloped land in various lots, a good chunk of it owned by Vail Resorts, much of it around current employee and workforce housing areas.

We aren't at buildout.

So why do you need density in the few SFH areas, less than 5% of the housing units in my zone, when those are not going to actually make a meaningful impact on the housing situation?

If you want densification, there are tons of condo buildings on large lots where the buildings occupy less area on the lot proportionally than do most SFHs. You could build 1 or 2 more MDUs that would supply more housing than if every SFH built an ADU, and those two complexes would be at a fraction of the cost per unit of the ADUs.

The biggest issue for creating new workforce reserved housing is build cost vs what the workforce can pay. ADUs have the highest cost per unit of any workforce housing option, which is why they have to be STRs to cashflow.



Eagle Water said the issue will be a lack of capacity necessitating hundreds of millions of dollars in plant upgrades. Local government will have NO say of "this area has water capacity so you can do ADUs in this hood, but that hood doesn't have capacity." Not allowed under the legislation.

The legislation forbids "requiring entities to submit a completed and validated water loss audit report to the Colorado water conservation board."

So your argument is for eminent domaining things and packing more density into areas that already have density rather than allow more density everywhere?

As far as water - chances are those upgrades are needed anyway, so might as well get started. Also plenty of chance those lots that already have condos don't have capacity for more based on septic loading unless there's city water of some sort. I know here in NH it's hard in rural communities as you have to do a bunch of extra engineering for larger properties to ensure proper catchment, release and filtering.

[fastfred]

I'm completely confused why the businesses in these mountain town HCOL locales don't just increase the wages paid to labor so that they can either cover their housing costs or transportation costs to live farther away.

Aren't you just subsidizing the externalization of a business cost and poor financial decisions of people who can't actually afford to live in these places with public dollars?

Um this is America where no one wants to pay the true cost of any product or service

It's a race to the bottom and has been

So we happily offset tge true cost by govt redistribution of wealth through subsidies

Plus people like me want to profit and make good money and have nice things I guess that is wrong

Do I am to pay the lowest wages the market will bear? Fuck yes I do I guess that is wrong

The problem is the consumer I lose endless jobs because I'm extremely high priced and know how to prepare a solid estimate people are always looking for what they assume will be the best number

If my 250 dollar dinner for 2 at rootstock was to double in price to offset the cost of living do you think they'd still be in business?

If rental rates went up 150 a night to offset cost of living bookings would drop

Instead of a shitty 30 dollar breck t shirt it now costs 60 so the clerk can make 36 an hr

[J. Barron DeJong]

Maybe I missed it, but I went back to look: does this CO legislation prevent localities from limiting STR’s?

Saw that ADU’s can’t be deed restricted, but can a town limit the number of STRs they approve, or impose a fee on operators of STRs to limit the market for them?

[east or bust]

Pretty comical that no one who disagrees with summit has made a counter to his point about building costs and the feasibility of actually housing local workers (the entire point of this topic) in the ADUs. I don’t think his argument has anything to do with NIMBYism, more like explaining why the ADU idea isn’t a realistic solution.

Why would someone go through the effort of building an ADU if they don’t plan to rent it at market value (whether LTR or STR)? Outside of special circumstances, people are not that charitable. Low income local workers can’t afford market value in “mountain towns,” that’s why you’ll see people drive into Jackson 5 days a week from places as far as Idaho Falls. I’m guessing it’s no different in any other mountain town. Oh, and don’t forget to add at least 20-25% of what normal building costs would be outside these bubble communities. So sure, the ADUs will house people, but not the target population of this discussion.

[J. Barron DeJong]

Pretty comical that no one who disagrees with summit has made a counter to his point about building costs and the feasibility of actually housing local workers (the entire point of this topic) in the ADUs. I don’t think his argument has anything to do with NIMBYism, more like explaining why the ADU idea isn’t a realistic solution.

Why would someone go through the effort of building an ADU if they don’t plan to rent it at market value (whether LTR or STR)? Outside of special circumstances, people are not that charitable. Low income local workers can’t afford market value in “mountain towns,” that’s why you’ll see people drive into Jackson 5 days a week from places as far as Idaho Falls. I’m guessing it’s no different in any other mountain town. Oh, and don’t forget to add at least 20-25% of what normal building costs would be outside these bubble communities. So sure, the ADUs will house people, but not the target population of this discussion.

I don’t think the ADU’s are likely to be ‘the solution’ but more housing is more housing. Limit STRs if that’s the concern.

If ADUs are going to be too expensive to build, then what’s the complaint regarding making them legal to build, exactly?

Housing in mountain towns is going to be expensive. There will always be people commuting to them instead of living there. But allowing more building, especially of more affordable housing types, is going to allow more people to live in town.

[neckdeep]

Low income local workers can’t afford market value in “mountain towns,” that’s why you’ll see people drive into Jackson 5 days a week from places as far as Idaho Falls. .

And by "low income local workers", he means 90% of the staff at the hospital and other healthcare services, all the police and firemen, paramedics and rescue workers, virtually everyone responsible for maintaining town and county physical infrastructure...should I keep going? Jackson has 10,000 "low income local workers".

It gets worse because there is a contingent of local middle class folks who bought in 30 years ago. As they age out of the workforce, there goes the managers and supervisors. Another 10 years and 85% or more of Jackson's workers will be "low income" and a day ticket at the Village will be $350.

[Foggy_Goggles]

Is this the thread where we post the Zoom links to the relevant meetings? I'm sure someone can make a drinking game out of it.



Sent from my Turbo 850 Flatbrimed Highhorse

[altasnob]

Maybe I missed it, but I went back to look: does this CO legislation prevent localities from limiting STR’s?

Saw that ADU’s can’t be deed restricted, but can a town limit the number of STRs they approve, or impose a fee on operators of STRs to limit the market for them?

The CO law has no affect on a community's ability to regulate, or even exclude ALL STRs from the community.

The law also doesn't say you can't deed restrict your ADU. What the law says is a community can't FORCE a new ADU to be deed restricted. Of course, why would anyone voluntarily deed restrict their house? But the community could do things to incentivize deed restricted ADUs, like allow two ADUs per parcel if one is deed restricted.

[altasnob]

I don't understand why these high priced resort towns think they are special. Seattle, San Francisco, and Denver have super expensive cost of living, have a fuck ton of tourists, and have a fuck of STRs taking away long term rental housing. There is just as much "insatiable" demand to live in these cities. The mountain towns face the exact same issues, for the exact same reasons, that big, expensive, cities face. But the mountain towns think they know how to fix it better than the cities. They say, don't force density on us. Let us decide how much density to allow. Let us decide how much subsidized housing to build. That hasn't worked in the last 50 years. Why should I trust you that it will work in the next 50?

[zion zig zag]

The sad irony is the county has been trying to hire a code enforcement officer at upper middle class wages for a few years now and can’t find anyone to enforce things like this even if Neckdeep did report it.

Is this job listed anywhere? I looked on the county website but didn't see it.

[altasnob]

I could see that there could be a first mover problem though. If one are liberalizes their building rules while everywhere else is still restricting, that could lead to an area being flooded.

This is how I see this playing out in CO. The powerful resort town NIMBY lobbyist will convince the legislature to exempt them from the law. The law will pass, but only apply to the Front Range. Front Range will get less expensive relative to living in the mountains, making mountain towns even less affordable. The NIMBY's in the mountain will get what they want.

[Core Shot]

I don't understand why these high priced resort towns think they are special. Seattle, San Francisco, and Denver have super expensive cost of living, have a fuck ton of tourists, and have a fuck of STRs taking away long term rental housing. There is just as much "insatiable" demand to live in these cities. The mountain towns face the exact same issues, for the exact same reasons, that big, expensive, cities face. But the mountain towns think they know how to fix it better than the cities. They say, don't force density on us. Let us decide how much density to allow. Let us decide how much subsidized housing to build. That hasn't worked in the last 50 years. Why should I trust you that it will work in the next 50?

Those three cities are wayyyyy different than mountain towns. The percent of STR is nothing like ski or vacation small towns. Yeah. I’m sure there’s a few STR in those cities. But as a percentage of housing units it’s nothing.

Ski towns? So many vacant units. But they used to be owner semi occupied.
Now? They are bought for STR from the beginning. Shit has changed. Man.

[altasnob]

Those three cities are wayyyyy different than mountain towns. The percent of STR is nothing like ski or vacation small towns. Yeah. I’m sure there’s a few STR in those cities. But as a percentage of housing units it’s nothing.

Ski towns? So many vacant units. But they used to be owner semi occupied.
Now? They are bought for STR from the beginning. Shit has changed. Man.

It doesn't matter what percentage of homes are STR. What matters is whether the average day worker can afford to live in the community. In that sense, Seattle, Denver, and San Francisco are no different than mountain towns.

If you think STRs are 100% the problem. Fine, go ahead and ban ALL STRs. That CO law doesn't say you can't do that. People are attacking ADUs by making arguments against STRs when that is a totally different subject.

Specifically, the CO law says a community can't put restrictions on ADUs that are more restrictive than SFHs. So you can't say you can STR your SFH but can't your ADU. But you can still restrict and limit STRs all you want. You just have to do it across the board, treating both SFHs and ADUs equally.

[neckdeep]

Ski towns? So many vacant units. But they used to be owner semi occupied.
Now? They are bought for STR from the beginning. Shit has changed. Man.

This bears repeating. AirBnB: 1% of hosts manage nearly 25% of listings and account for approximately 30% of revenue.

[east or bust]

I don’t think the ADU’s are likely to be ‘the solution’ but more housing is more housing. Limit STRs if that’s the concern.

If ADUs are going to be too expensive to build, then what’s the complaint regarding making them legal to build, exactly?

Housing in mountain towns is going to be expensive. There will always be people commuting to them instead of living there. But allowing more building, especially of more affordable housing types, is going to allow more people to live in town.

You're missing the point. These towns need more housing for a specific demographic, namely the one neckdeep referenced.

The point summit is making is that if ADUs aren't deed restricted, they aren't providing housing for the people who actually need it. They don't expand the pool of affordable housing because market rate isn't affordable for low income/essential/whateveritmaybe local workers. If ADUs are mandated to be deed restricted, then people have no incentive to build them unless they're receiving a subsidy and that program doesn't exist... yet.

[altasnob]

The point summit is making is that if ADUs aren't deed restricted, they aren't providing housing for the people who actually need it. They don't expand the pool of affordable housing because market rate isn't affordable for low income/essential/whateveritmaybe local workers.

But ADUs, whether they are or STR or not, don't reduce that pool. You can still build all the large scale, multi-family subsidized housing you think you need.

Basically, summit's argument is "I want more subsidized housing and since ADUs don't provide that, I don't like them."

[east or bust]

But ADUs, whether they are or STR or not, don't reduce that pool. You can still build all the large scale, multi-family subsidized housing you think you need.

Basically, summit's argument is "I want more subsidized housing and since ADUs don't provide that, I don't like them."

Well no shit, I believe he's saying he doesn't like them as a solution to the affordable housing problem... But I'll let him speak for himself.

[J. Barron DeJong]

You're missing the point. These towns need more housing for a specific demographic, namely the one neckdeep referenced.

The point summit is making is that if ADUs aren't deed restricted, they aren't providing housing for the people who actually need it. They don't expand the pool of affordable housing because market rate isn't affordable for low income/essential/whateveritmaybe local workers. If ADUs are mandated to be deed restricted, then people have no incentive to build them unless they're receiving a subsidy and that program doesn't exist... yet.

I think my point is that this legislation enables building of ADUs which -may- provide some more affordable housing (especially if they aren’t allowed to be used as STRs), and it doesn’t preclude any of the other housing solutions being advocated for, as far as I can tell. So what’s the issue?

[jackstraw]

Attachment 455556

[altasnob]

it doesn’t preclude any of the other housing solutions being advocated for, as far as I can tell. So what’s the issue?

To the "mountain town people," who already own their own place or scored a subsidized pad, the issue is they only want worker housing. Any other form of new housing is considered bad, and will make things more crowded. But things are really expensive, and they need labor, so they want worker housing (out of necessity), but only worker housing.

The problem with this is they have no ability to stop other, non-subsidized housing from being built. New SFHs will be built regardless of whether you can put an ADU in the backyard or not. And like I said before, I don't think any community in the US can exist with 100% of their workforce living in subsidized housing. This isn't Singapore.