A Case Study: Affordable Housing Dilemma of a Small Town

This story was produced through the Daily Yonder Rural Reporting Fellowship, with support from the LOR Foundation.

Kevin Connor spent a few months living in the Bridge Homeless Shelter transitional housing when he first moved to Cortez, Colorado, after getting out of La Plata County Jail. The Bridge has 12 transitional housing units with most residents paying under $200 a month for housing. 

After leaving the Bridge, Connor lived in a hotel for a bit but was paying more than $400 a week and found it unsustainable. After that, he lived in a storage room at one of his workplaces for four months. 

Connor couldn’t afford a rental in Cortez even while holding multiple jobs.

According to a housing needs assessment, presented at a city council meeting for the City of Cortez, Montezuma County, Colorado, has had the greatest rate of housing cost increases in the State of Colorado between 2018 and 2022 — 16% per year.

Most importantly, for people like Connor who need an affordable place to rent, there are very few rentals that fit the definition of “affordable housing,” which means that they are available for less than 30% of the area median income. In Cortez, for a one-person household, this is around $863, according to Colorado’s Baseline Assistance Tool. During the time of this reporting, the Daily Yonder was able to locate fewer than five rental offers on local rental websites that fit that price range.

In 2022, Colorado voted to approve Proposition 123, which modified the state’s affordable housing programs to create a State Affordable Housing Fund. Several hundred million dollars will be available for municipalities, counties, and tribes to implement affordable housing. To receive the funding, however, municipalities, counties, or tribes have to commit to raise their affordable housing by 9% in three years above a baseline number, determined by the Baseline Assistance Tool. 

Numbers Matter

The issue is that some of the data provided by the Baseline Assistance Tool is wrong. 

According to the tool, the town of Dolores (also in Montezuma County), which has a population of 805, has 334 available units, and 282 affordable units. But the Town of Dolores has 543 households, which would mean that half of the households in Dolores are living in affordable rentals, which is untrue. According to the Tool, this means that Dolores needs to create 30 new affordable units in the next three years.

“There’s not a place to put 30 units in Dolores,” said Shalako Powers, who is currently working on updating this incorrect data. “It’s confined by walls of the canyon on both sides and then a hill coming out on the west and a river canyon on the east. Where are you going to put 30 units in Dolores?”

Powers works for Region 9, the economic district that contains Montezuma County as well as the neighboring four counties that make up Southwest Colorado. Region 9 is a nonprofit community economic development corporation that works closely with the counties and cities on projects like housing, broadband, transit, and other types of economic development.

When Powers spotted the discrepancy in the data, which was originally presented in a publicly available spreadsheet, he worked with the Colorado Division of Housing to develop the Baseline Assistance Tool. Municipalities are required to use this data, but the Baseline Assistance Tool allows the user to adjust for inflation, housing size, and other variables. This means the number can get closer to what feels reasonable for municipalities to commit to. 

But even after committing to Proposition 123, municipalities are then only eligible for the money from the Affordable Housing Fund. Nonprofits, developers, or governments can apply for the grant but are not guaranteed funding. Powers is worried that even if the towns or counties in Southwest Colorado did commit to Proposition 123, they would not receive the funding. 

“Proposition 123 failed in Montezuma County,” said Powers in a Daily Yonder interview. “It did pass as a state but it failed here. My concern is that we’re going to see what we always see. The taxpayers of our rural areas aren’t going to get their money back in their tax refund and none of that money is gonna come back here to provide housing and the people here are just going to get screwed like they always do.” Powers referred to how Proposition 123 passed by 52.6% for the state of Colorado, but lost by 54% in Montezuma County, reflecting the community’s conservative-leaning politics and lack of belief in the solution behind Proposition 123. 

Powers thinks that cities and counties on the Front Range — where the population centers of Denver, Colorado Springs, and Boulder are located — will get the majority of the money because they have grant writers who can pursue it, compared to the more rural areas on the Western Slope where there are fewer staff able to pursue funding. Municipalities have until November 1, 2023, to submit their commitment to qualify for funding. 

A Universal Problem

In the days following the Daily Yonder interview, Connor secured housing – a $750 trailer in Cortez. But he said about the unit that “The entire park should have [been] condemned 20 years ago. These places are almost 50 year old dumps. I also think what I’m in right now was condemned at some point.”

Daniel Stern, communications and outreach manager for the Washington, D.C.-based Housing Assistance Council, said that other rural areas around the country are facing similar challenges around housing availability and affordability. The common issues he sees are lack of supply, aging supply, and a challenge with scaling construction in rural areas. 

“In a rural area, if you need 40 homes or a multi-family house, it’s harder to make that profitable for construction,” Stern said. “That’s why you see so much luxury construction because that’s what pencils out the most unless you use some of the federal programs that are built for building out affordable housing. But those programs… really, really work once you get to a certain scale and that scale is hard to achieve in rural areas.”

Correction: This story was updated to clarify the location of Kevin Connor’s incarceration.