Affordable Apartments in Estes Park Serve Low-Income Workers Affected by Floods

Affordable Apartments in Estes Park Serve Low-Income Workers Affected by Floods

The resort community of Estes Park, Colorado, has a shortage of workforce housing that is compounded by economic seasonality, demography, and the catastrophic flooding of 2013. Completed in July 2016, Falcon Ridge Apartments, a project of 48 one-, two- and three-bedroom apartments in flats and townhomes that is the first large-scale housing complex constructed in Estes Park since 2003, represents an important step toward addressing this need. The project consists of a mix of apartment buildings and townhomes affordable to households earning between 30 and 60 percent of the area median income. Victims of the 2013 flood receive preference for occupancy. Developed by the town of Estes Park and the Estes Park Housing Authority, this $14.1 million project was financed with funds from the Community Development Block Grant Disaster Recovery (CDBG-DR) program, the Low-Income Housing Tax Credit (LIHTC) program, Colorado Housing and Finance Authority, and the town of Estes Park.

Estes Park Economy and Housing Market

The town of Estes Park lies in the Rocky Mountains near the east side of Rocky Mountain National Park. The larger area, Estes Valley, includes the incorporated town of Estes Park and the surrounding unincorporated areas of Larimer County. Tourism and service jobs dominate the area’s economy, which depends largely on the national park. The extreme seasonality of the economy has been a long-term problem for the town. To meet seasonal employment needs, the area must fill approximately 3,000 jobs every summer. The town of Estes Park is also a retirement community with a large senior population, creating a need for low- and moderate-wage workers and presenting a unique challenge for workforce housing.

The Impact of 2013 Colorado Floods

Like other communities nationwide, the Great Recession hit the Estes Park economy and housing market hard. As commercial construction began picking up in 2011 and the rate of job growth increased, the area began a gradual but strong recovery. Historic flooding in September 2013, however, reversed this nascent recovery. Unprecedented rainfall levels in Colorado counties damaged and destroyed homes, businesses, infrastructure, and watersheds. The Federal Emergency Management Agency declared Larimer County a federal disaster area, identifying 81 renter-occupied and 554 owner-occupied housing units with various degrees of damage in the Estes Park area. Residents were displaced by damage to their units or cut-off from access to their homes. Vacant rental properties, cabins owned by YMCA of the Rockies, and local hotels provided temporary housing. Recovery began in November 2013 with the completion of several highway and road repairs, but restoring damaged housing units has taken longer. Although the state of Colorado provided residents with rent subsidies and new construction aid, many renters had to compete with homeowners for short-term rental housing. According to Eric Blackhurst, chair of the board of the Estes Park Housing Authority, many people left the area because of the flood, which has depressed the housing recovery.

Shortage of Workforce Housing

In addition to the high rental demand caused by the flood, a decline in the number of rental units created a very tight housing market in the Estes Park area. As the market recovered, long-term rentals were sold to new owners or converted into short-term vacation home rentals in response to the rising number of visitors to Rocky Mountain National Park, and the construction of new rental properties has not kept pace with demand. This shift in the housing market not only displaced renters but also permanently reduced the supply of rental housing. The scarcity of rental housing has caused the number of commuters from other counties and downvalley areas to more than double, from 480 in 2007 to 1,020 in 2015. The need to commute is a severe burden for Estes Park’s workforce, particularly low- and moderate-wage workers, because the cost of long-distance commuting leaves too little income for other essential expenses. Currently, a significant portion of the Estes Park housing market serves luxury buyers and renters, and the town’s housing stock is insufficient to address the needs of essential workers, such as police officers, firefighters, and nurses, who are first responders to a natural disaster.

Falcon Ridge Apartments and Townhomes

Despite the continuing demand-supply gap in workforce housing, there have been few opportunities to channel federal or state resources into the area since 2003. Funding for low-income residential development has always been highly competitive at the state level. The flood was what enabled Estes Park to build Falcon Ridge Apartments and Townhomes, the first income-restricted rental property in Estes Park in a decade. “The flood was definitely the motivating factor for the state to support the Falcon Ridge project to help disaster recovery,” said Blackhurst. Although planning for Falcon Ridge first began in early 2013, the project moved to the top of the list because housing has become a priority in Colorado’s recovery efforts. Construction began in April 2015.

The Colorado Division of Housing awarded Falcon Ridge $1.8 million in CDBG-DR funds. The CDBG-DR grant required the project to give priority to flood victims. Out of the total 48 units, 16 income-qualifying, flood-impacted households initially leased units. Falcon Ridge was also the first flood recovery project in the area that awarded LIHTC equity, which added $9.8 million to the project’s financing. An additional $2 million loan from the Colorado Housing and Finance Authority and $544,771 in deferred developer fees from the town of Estes Park, helped meet the total construction cost, which reached $14.1 million.

Operated by the Estes Park Housing Authority, Falcon Ridge offers 48 one-, two- and three-bedroom apartments in flats and townhomes for households earning between 30 and 60 percent of the area median income (AMI). Four units are available to those earning up to 30 percent of AMI, 10 units are for those earning up to 40 percent of AMI, 14 units are for those earning up to 50 percent of AMI, and 20 units are for those earning up to 60 percent of AMI. Monthly rents range from $365 to $1,075 depending on household income, unit size, and housing type. Notably, Falcon Ridge does not offer leases shorter than a year to ensure that it serves the housing needs of year-round workers. Units are equipped with vaulted ceilings, patios, in-unit washers and dryers, walk-in closets, and energy-efficient appliances. The community also provides residents with a clubhouse and outdoor recreation facilities.

Disaster Recovery for Housing Market Recovery

Unsurprisingly, Falcon Ridge is fully leased. As of April 2018, approximately 220 applicants are on a wait list; 8 percent of these are flood-impacted households who have priority for occupancy. The development of Falcon Ridge was a critical first step toward resolving the severe scarcity of workforce housing in the Estes Park area, which was exacerbated by the 2013 flood. The development, however, falls short of the demand. Flood-related pressures on rents combined with an aging population and increased tourism have changed the fundamentals of the Estes Park housing market. Low- and moderate-wage workers can neither find nor afford reasonably priced housing within the area where they work. Blackhurst expressed frustration about what Estes Park has endured. “Five years after the flood, we are still in a recovery mode in certain sectors of our community. [The] general population has no idea how long it really takes to recover,” he said. The Estes Park Housing Authority is hoping to have more workforce housing development projects in the area with stable funding sources.