I am still absorbing the U.S. Mountain Community Summit presented by APX1 and hosted by the Town of Vail January 14-17th to sift through what set it apart from other forums on the resort housing challenge.
For one, it wasn’t the usual one-hand clapping conversation among public officials and staff comparing same tools in the same regulatory toolbox. Vail Mayor Chapin kicked off the event by saying “too many times we focus on the problem. Lets focus on solutions.” He noted that parking, seasonal economy and housing were mentioned as top priorities in Vail’s first Master Plan in 1973.
The Eagle County Housing Task Force lobbied for the inaugural Summit to be in Vail. The group promoted use of “YIMBY”, as in, “Yes, In My Backyard.” This antidote to NIMBY wasn’t so difficult to sustain for a few days without a site-specific plan or neighbors at the table.
As far as I could tell, each housing project discussed over the three-day summit had a significant degree of public sector partnership or outright public leadership to make it happen. Indeed, the old default public sector approach—write some regulations, keep your distance, take your time, shoot holes at a staff level, then at the P&Z, then at the board level, hold as many hearings as necessary for the NIMBY contingency to get the last word– that approach is a non-starter today.
Being organized by an entity on the private side of the table was part of the difference of the Summit, as were frank forums in which developers and investors debriefed recent experiences from projects in Colorado resort towns side-by-side with public partners, like George Reuther, the Town of Vail’s Housing Director. Development lingo was prevalent and the comfort with which all sides of the table spoke freely was fascinating. At one point, a developer on a panel was half-jokingly nudged into completing a thought by a peer who said, “this is a safe place,” in other words, this is not a public hearing on your project.
Spearheading the three-day event was APX1 “community alchemist and entrepreneur,” Natalie Spencer who returned from working on “all things shelter all over the world” to Sun Valley with her 3-year old where she quickly realized that even a “six figure earner had trouble with housing.” The group that became APX1 thought it would become a thinktank to address the issue, though “after looking at the data” they decided they “needed to be an action company” of investors. They are distinct because of a commitment to a 30-year IRR of 10% (evidently even most affordable housing developers seek less than 10-year RIO of 30% or more). Their focus is on mountain communities with parameters that included a 95% Geofence (public lands), under 50,000 population, more than 30 minutes from an urban area. Higher population areas have a housing affordability issue as well, but they have a much larger toolbox to address the issue. This established APEX1 target market as 26 communities each of which were invited to the inaugural summit. Part of what was different was that for some, the event was clearly a networking junket with mid-day blocked out for skiing. Whatever it takes to attract the investors. Most of the folks I knew there worked through the ski breaks.
In spite of Spencer’s call to start the summit with a call out “looking for investors who are prepared to inject capitol using free market technologies…” it was interesting to learn Tuesday evening how much investment capital (VC as well as Foundations, etc.) is concentrated around Silicone Valley, Boston and NY, with most of the rest of it concentrated in the next predictable list of hot urban places. The consolidation of many banks after the S&L scandal is still an issue. Those of us in mountain communities tend to think there is a lot of investment money floating around just because there are so many second home owners and there is strong support of the non-profit community. Listening to the evening speaker Jeremy Keele, “Innovations in Impact Investing” I wondered how many cool conferences it would take before entire regions decided they needed an innovative “local” investment groups to crack the housing challenge instead of waiting on national investment dollars.
To be very clear, the housing affordability problem persists, not for a lack affordable housing construction activity (many projects were featured), but for the inefficiency of how local governments, developers and investors interact, with each project bespoke from all sides, preventing scalability and the ability to catch up to the rapidly growing problem. Local projects highlighted and dissected in various panel discussions included the Keystone Village at Wintergreen project, the Chamonix Vail project and the Six West apartment project in Edwards among others—each of which overcame challenges which looking back might have provided a reason to back away—outdated PUD guidelines, constantly rising construction costs, affordability clocks ticking for incoming residents (every 1% interest rate increase reduced affordability by $34,000).
Spencer started off the Summit stating, “we have the toolkit. It is just how to apply it in an interesting, innovative way.” This was a theme echoed throughout the conference, underscored by George Reuther, the Town of Vails Housing Director who said, “I’ll never forget the night I presented (Vail INDEED program) when a Vail Council person said, ‘well, go out and study all the other communities doing this and report back on how it is working.’” To which Ruther’s reply from the podium was “I can’t because this hasn’t been done.”
Reuther continued, “if we are not willing to go down a new path, we will go down the same path to the same problems.” The towns choice to focus to “acquire 1,000 deed restrictions by the year 2027 to maintain homes for residents in the community” is a big fat hairy market solution to stem the tide of housing migrating into second homes and investment properties. It also shifts the focus from a project-by-project mindset to a community-wide viewpoint. As the website states, INDEED is “not your typical deed restriction program. No appreciation cap. No income cap. No household size requirement.” Applications, frequent questions are on the website. It has made Reuther a suddenly sought-after speaker. But even that program will only allow Vail to “Keep Up” with the problem, not “Catch Up” which requires new construction. Reuther’s gained perspective on that from being a partner with the development team on Chamonix Vail, he said, “I learned about some of those things that just sounded before like (the developer) whining.”
It appears that communities that are serious about addressing the housing affordability challenge need to find ways to lay down with the lions of the development community.
As an entity representing local governments which paid the steep registration fee in order to share lessons learned, some of my takeaways for public sector players include:
- Public sector should not assume that tools put in place are working, that existing PUD or Zoning will work. If you are assuming that developers will be able to work within those previous boundaries and also deal with dynamic marketplace challenges, and be able to get a project done, you may have a lot of approved unbuilt projects to show for it.
- If you want to make an affordable housing project feasible, contribute land or help finance it
- Time and uncertainty kills projects
- Elected leaders need to buy into larger goals to weigh against their role representing citizens who are skeptical of change and concerned about impacts
- In other words, addressing housing takes a strategic, visionary long-view of community needs and a public sector which can balance a gatekeeper role while actively leaning-in to dynamic solutions
- Not all communities and officials are prepared for this shift. This shift does not mean lowering standards, it means evolving from an us-them perspective
- It may be of benefit for jurisdictions to have a structural internal advocate (like a Housing Department, Economic Development staffer, or a community advocacy group) that can counter-balance the overwhelming din of NIMBY voices
- Financing of housing projects is frighteningly complex
- Communities should only allow housing projects that leadership would be proud to inhabit, in other words, build neighborhoods, build communities, don’t build housing projects
- The State of Colorado studied communities that successfully addressed such challenges as affordable housing and the one common factor for success? Leadership. Are you cultivating leaders who understand and have the perspective to address these big picture challenges?
- Track the accomplishments and share your success stories especially if you expect to go to voters at some point in the future
- Give staff permission to innovate, and the room to “fall forward” doing so
The APEX1 U.S. Mountain Communities Summit was covered by the Colorado Sun, Route Fifty and the Vail Daily.
