AVON, Colo. — Voters in mountain communities overwhelmingly decided to pass ballot questions in the November election that fund affordable housing projects.
Communities across the state are dealing with a serious housing crunch that has worsened during the pandemic. Some have even declared the shortage to be a crisis.
In an effort to help, town councils in Avon to Crested Butte, Telluride to Vail turned to the ballot box to ask for help.
Voters in Avon were asked to increase the short-term rental excise tax by 2% to help pay for housing. Ballot question 2C won by large margins and is expected to generate $1.5 million in the first year.
“It was really strong support. I think about 70% of the voters voted in favor of this. It’s a pretty clear consensus that the community felt this was the right type of tax at this time to help support community housing,” said Avon Town Manager Eric Heil.
Heil considers the passage an important start for the town, which didn’t have a housing plan until 2018. Like other mountain communities, Avon has experienced a sharp increase in prices over the course of the pandemic.
“It’s probably way past due time to start making normal money available for community housing in these resort areas. There are a huge part of the state economy, and they cannot run without hospitality workers,” said Heil.
The money will go to programs like Mi Casa Avon, a deed restriction program aimed at helping people who work in the community live there as well. It will also help fund the acquisition of land and construction of affordable housing.
Other lodging properties, such has hotels or bed and breakfast establishments will not be affected by the tax increase. The town is hoping to bring 100-200 more units online within the next couple of years.
However, Heil says there’s still a lot more work to be done on both a local and state level.
“There really needs to be a substantially greater investment in housing to really provide something that’s more sustainable,” he said.
Leadville and Ouray voters also passed measures to impose more taxes on short-term rentals in order to help fund their housing projects. Leadville’s short-term rental tax increase is 3% and Ouray’s is 15%.
Telluride’s transitioned its 2% lodging tax from the county to apply only to the town. It passed with more than 65% of the vote.
Telluride also voted in favor of a temporary cap on short-term rental licenses to the number that had been issued by Election Day and double the short-term rental license fee. All of the money goes to affordable housing.
Crested Butte, which declared a housing emergency in June over its affordable housing issues, had placed two questions on the November ballot all aimed at housing.
Ballot question 2C asked voters about imposing a community housing tax of $2,500 per residence for homes that sit vacant most of the year. It also would have increased the town’s sales tax by .5% to help with housing.
However, 57% of voters in the town decided to reject that idea and the question failed.
The second measure, question 2D increases the excise tax on vacation rental properties by 2.5% to help with an affordable housing fund used to buy land and build units.
Crested Butte residents overwhelmingly passed that question with nearly 75% of the vote.
In Vail, voters passed a .5% sales tax increase to fund more housing initiatives. It’s the first time the town has decided to raise its sales tax since 1974.
Roughly 54% of Vail residents voted in favor of the sales tax increase, which is something Town Councilmember Jenn Bruno attributed to the turnout of younger voters.
“We saw a definite surge in the 18- to 35-year-old voters, which was incredible,” said Bruno. “We have to give a lot of credit to the young folks who moved to Vail and want to stay here, and 2A was a way to keep them here.”
The tax is estimated to bring in about $4.3 million annually. The money would be used to fund things like the town’s InDeed program as well as new developments.
In an effort to lessen the burden on families, the town council decided to exempt groceries from the proposed sales tax.
“These housing initiatives that have been passed in mountain communities are a real strong message that yes, we care about our future,” said Bruno.
In Summit County, voters approved a 20-year extension to its sales tax to fund more affordable housing projects.
Roughly 71% of voters in the county decided to extend the .6% sales tax. The money will be used to help the town leverage bonds for long-term housing projects.
“I’m really overwhelmed by the margin with which it won in Summit County. I think it certainly speaks to what a crisis or affordable housing is in the mountains and the voters are very much willing to support resolutions and solutions,” said County Commissioner Tamara Pogue.
Pogue is also hoping to use the money for state and federal money-matching programs for housing.
She believes the recent vote shows that the housing crunch in mountain communities is no longer only about individuals. Instead, entire economies are being affected since businesses are being forced to change their hours or service levels since they can’t find enough employees to work.
However, Pogue’s excitement about the ballot question passing is tempered because of how much work is ahead for the county.
“We’re excited that it does mean a lot of these projects can come to fruition. I think that however the challenging aspect of it is this only generates $3 million a year for us and that is really pennies on the dollar in terms of what we need to move the needle,” she said.
The county is continuing its work to change regulations for short-term rentals, including a new permitting approach Pogue expects to see rolled out by the end of the year.
It’s also considering changing the zoning for short-term rentals within workforce neighborhoods.
The county placed a temporary moratorium on new short-term house licensing in unincorporated parts of the county in September as it works on some of those changes.
However, Pogue and other elected leaders in mountain communities across the state say they need state and federal help to truly address the crisis.
“In mountain communities like mine, know that if we do not find some solutions in partnerships between local government, state government and federal government, the economic impacts for the whole state, not just our community, are going to be tremendous,” said Pogue.
For now, these local leaders say their voters have stepped up to help with the housing crisis, now they are waiting to see whether the state does the same.