By Brandon Leuallen, The Business Times

Scarcity of affordable housing emerged as a key reason School District 51’s enrollment declined by 2,049 students in the past 5 years.

The impact of that decline was center stage at two District 51 Board of Education meetings last week, during which the board voted unanimously to close three elementary schools at the end of the 2024-25 school year.

District 51 demographer Shannon Bingham collected data that showed lack of affordable housing, especially starter homes, was one of the primary factors in an overall reduction of the Grand Valley’s school-age population.

Meanwhile, in a recent interview with The Business Times about housing inventory, Grand Junction City Council member Scott Beilfus said, “Single-family homes is our biggest economic issue around here right now. We need to have an affordable way for working families to put down roots in Grand Junction and not just rent for the rest of their lives.”

Beilfus later added, “When you look at the demographics, elementary kids are the smallest group here and they should be the largest group. You know, in a family, once you have two kids you don’t want to live in an apartment anymore. You want a house. So, we should be addressing that issue big time.”

Identifying affordable housing as a problem is easy. Addressing it, on the other hand, is not so easy.

The Business Times reached out to local officials, builders and other stakeholders to explore the challenges preventing the construction of starter homes that young families desire and can afford in the area.

The demand is clearly there for building affordable homes, according to Diane Schwenke, a governmental affairs consultant for the Home Builders Association of Western Colorado and the Grand Junction Area Realtors Association. She said 80 percent of people who rent want to own a home, but they can’t afford it.

“It’s the lack of inventory that is driving up the cost, which is making it almost impossible for people to own a home, for sure,” she said. 

In turn, she added, “The high cost of housing and lack of inventory makes it harder to bring businesses to town.

“We are competing with counties like Pueblo for business to move here. Pueblo’s cost of housing is at 82.7 percent of the (national) median. Grand Junction is at 116 percent. I mean, we’re up there with, we’re not quite Denver, but we exceed Colorado Springs in cost of housing.”

Similarly, Beilfus addressed the lack of single-family attached homes, such as condominiums. “We’ve had virtually no condos built here, which is a great entry-level housing piece, but in Colorado the warranty laws on a condo building enable the whole condo to sue a developer if something goes wrong in one of the condos.” 

Beilfus continued, “They’re working to change all that, and I think if that ever happens, it’ll benefit Grand Junction, it’ll benefit the whole state. But right now, it is what it is, so we just have rentals in Grand Junction coming online.” 

Echoing that sentiment, Schwenke added developers are likely to continue building multifamily units that they rent out themselves, and they’re unlikely to build multifamily units for sale.

That lack of affordable housing, especially single-family, detached homes, also stands to prevent District 51 from regaining the students it lost in recent years.

Data compiled by Bingham shows apartments have the lowest yield of students to the district, with just 0.12 students per unit. In comparison, single-family homes yield about 0.42 students per unit, while mobile homes generate roughly one student per home. 

Despite the need, building affordable single-family detached homes is not part of the City of Grand Junction’s efforts to transform the city into a vertical, high-density urban community. According to Grand Junction Mayor Abram Herman, the city wants to avoid sprawl and bring residents closer to services within walking and biking distance. It also has incentivized high-density housing through a tiered system, offering builders lower fees as density increases.

“You’re trying to grow smart as a city,” Herman said. “And also, the less dense the development is, and the farther out it falls, the more expensive it is to extend road infrastructure. To set up everything like that becomes much more expensive for taxpayers to provide that kind of infrastructure when you don’t have density. 

“So there’s nothing saying people can’t do single-family … there’s many areas where they can. But we definitely want to try and incentivize dense development, especially at the city core, because it’s a much more effective use of taxpayer dollars, and it’s a much better way for any city to grow.”

Beilfus said the city has done well building rentals, and more are coming online, “which is great.” But, he added, “We have almost no affordable single-family homes, and the developers that are building some single-family homes under $400,000 are pretty much doing it all in the county.” 

A major reason, he said, the county doesn’t have all of the city’s infrastructure requirements that potentially deter builders.

“If they have access to sewer in the county, they’ll do it out there, because they don’t have to do bike lanes,” Beilfus said. “They don’t have to do landscaping. They don’t have to do large sidewalks. It’s infrastructure. Our connection fees are a little higher than the county.” 

One drawback for the county, he said, is “there isn’t the same access to services,” but that’s not enough to make a builder overlook the city’s infrastructure requirements.

Beilfus then said a relatively small difference in monthly mortgage payments make a big difference in affordability.

“When you’re talking about the difference between a $2,200 a month house payment and a $1,900 a month payment, for most people that’s make it or break it on buying a house,” he said. “That’s the difference in the fees they pay in the city vs. the county. The developers want to build in the city, and they will continue to build more expensive houses here, I believe, but it’s just hard to make it pencil out.”

Schwenke added builders aren’t inclined to build subdivisions populated with smaller, less expensive houses, because infrastructure costs make them less profitable than subdivisions with larger, more expensive homes.

Providing a builder’s perspective, Ron Abeloe of Chaparral West Inc. said, “Infrastructure costs $45,000 to $65,000 per lot and doesn’t include land costs, or unit fees. This is all before starting to construct the home.”

Abeloe said he builds homes with the same floor plans in the county and city, other than the finishes in some of his projects, but the city’s entitlement process is more intensive, drives up his engineering costs, and it takes longer. One of his current developments in the county is a 106-unit, urban-style neighborhood with houses priced as low as $330,000 in Whitewater. Of note, the homes are connected to Clifton Sewer, not septic systems.

Abeloe said he suggested to Grand Junction officials that they could have exceptions for low-volume sidewalks to reduce costs and increase the number of homes being built in a neighborhood, but they wouldn’t budge. “Why aren’t sidewalk widths based on actual data for the volume of traffic on them?” he asked.

Abeloe said the cost of housing is going to continue to increase because of upcoming regulations at the state level.

“Due to state legislation,” he said, “on a 1,500-square-foot home it will add another $10,000 to $15,000 per home. So that’s the difference between 2024 and sometime in 2025.”

Mayor Herman has heard the suggestions and complaints regarding regulations and offered this: “There needs to be a reasonable conversation there about what’s most impactful. But just saying that we need to completely reduce regulations, well, if that’s what you’re looking for, you can see examples of that. That’s Clifton, that’s part of the county. That’s Delta, and if that’s the form of development you like, I think that’s different than what we aim for.”

When asked about developers paying for multimodal infrastructure such as expanded sidewalks and bike lanes, Herman said it is similar to developers paying for roads already.

“Why would existing taxpayers pay for that impact?” he said. “If they’re building units for people moving into the community, it would just be fundamentally unfair to our taxpayers.”

Schwenke said home buyers ultimately pay for the increase in infrastructure costs because they pay for it in the price of the house, then said, “The impact study that the city is currently doing would increase those fees substantially.”

One of those fees being considered, Schwenke said, is a linkage fee to help pay for affordable housing.

Grand Junction City Council member Cody Kennedy said the city is looking at charging the linkage fee to builders of commercial property rather than residential.

“I’m all about affordable housing, but putting that on the backs of commercial development coming into Grand Junction is just going to shut down economic growth in the community,” Kennedy said.

A community meeting concerning potential increases in impact fees is scheduled on Dec. 10 at the Lincoln Park hospitality suite, 1240 Gunnison Ave, and a Grand Junction City Council workshop will address the fees on Dec. 16.