“Everybody knows we cannot mess this up, kill it with too much process, too many costs; that is just not an option. If possible, we don’t want to be the reason (our own affordable housing project) doesn’t happen.”
-John Cattles, Assistant County Manager, Gunnison County
Many factors imperil a housing project as it winds from through the public processes of planning and early development review stages before a single shovel of dirt is turned. With public entities constructing housing, some now experience their own public land use processes and regulations from the perspective of a private developer. As they too become frustrated with aspects of the process, some revelations are beginning to occur. Gunnison County is the lead developer and owner of Whetstone, a proposed 240-unit affordable housing project. Some County departments review the project while others usher it through the entitlement process. Whetstone will be 100% deed restricted with a variety of rent rates averaging to rent affordable at 125% AMI. The need for such a project is acute. Census.gov listed the median household income for the county at $63,341 per year. In August, Realtor.com listed $895,000 as the median home price for the County, up 21% over the previous year. It’s a stunning figure for one of the most remote counties in the state. Demand for Whetstone’s housing price points remains robust as workers cling to very narrow economic margins.
The largest town, eponymously named as the county, has a population just under 7,000 residents and is 27 miles down a winding road from Crested Butte. Proposed on a county-owned parcel, Whetstone lies two miles down valley from historic Crested Butte and near Mount Crested Butte which together are a vital resort jobs center for the county. The median home price in town exceeds $1.5M (same source). Like the County, the Town of Crested Butte actively addresses the housing challenge. Already, 25% of the housing stock in town is deed restricted for local workers. The town employes a variety of strategic approaches to preserve the viability of a working community consisting of “locals” including various partnerships, assistance with improvements, rebates, a discounted tap fee program and a tax on vacation rentals. Without a long-term commitment from both local governments to regulate, partner and build affordable housing, it is unlikely any would exist. There isn’t much of a private sector construction and development marketplace to incentivize.
In September of 2022, Gunnison County submitted sketch plan for review of Whetstone to its own Planning and Zoning commission after entering into a Memorandum of Understanding (MOU) with nearby Town of Crested Butte to provide water and wastewater utilities. Early successes for Whetstone encouraged both the town and county. In April of 2023 the county was notified by the Colorado Department of Local Affairs that it had been awarded a $10 million Transformational Affordable Housing Grant (TAHG) which it intends to use for “horizontal infrastructure such as roads, water, sewer, electric and sidewalks” according to the Gunnison Times. These are the horizontal investments necessary before vertical construction of residents can begin.
While the project schedule intensifies, constrained by a ticking clock, John Cattles, Assistant County Manager who along with Cathie Pagano, Assistant County Manager is spearheading the Whetstone project for the county appreciates that the Board of County Commissioners (BOCC) has already learned “it is incredibly high-risk to develop housing, including going through our own processes.” He says they are accumulating a list of reforms to implement in coming years. For the County, the land use process no only entails navigating their own red tape and negotiating utility extensions with the Town of Crested Butte, it must also steer the project through an alphabet soup of state agencies that includes the Colorado Department of Transportation (CDOT) for access permits, the Colorado Department of Health and Environment (CDPHE) for a wastewater system and the Colorado Department of Local Affairs (DOLA) Division of Housing (DOH) for the TAHG contract.
Cattles admits to frustrations along the way, a sentiment with which many developers can identify: wishing that government would just “get out of the way” so they can ‘just build the project.’ He appreciates the county is learning it also needs to get out of its own way. He also understands that it is not that simple. For instance, the town has concerns it must assuage, and entities must strive to work together at both a staff and political level. The mutual agreement on the need for the project doesn’t change the complexity of the endeavor.
As of October 2023, seven months after an award notice from the DOH, contracting and commencement of construction for infrastructure remains on hold as the county awaits a final grant contract so final engineering and construction procurement can begin. In the meantime, one construction season has passed between the TAHG notice of award and the contract from the state that would allow the county to move forward.
Lumping the County and City reviews into one basket, Cattles says, “it has been an interesting thing to do. In internal conversations we reflect on the town’s processes and our own.” He predicts the county and town approval processes will likely be complete in early 2024, though additional layers of public agency review for the project remain. This is ironically in part because of spending deadlines from the Federal origins of the funds that intentionally placed on the $10 million grant through DOLA which must be spent by the end of 2026. That may sound like a long time until the brief duration for construction at 9,000’, which is less than half the duration than in the Denver metro area is factored in, leading to fear that for Whetstone, a desperately needed affordable housing project for a county short on workers those delays and deadlines threaten to run out the clock on the opportunity-window for Whetstone. The deadline for utilizing a grant was intended to accelerate the construction of such projects.
While funding from the state of Colorado is crucial to the project, the county learns as it navigates a development through all these public processes that their own barn and stable needs scouring, as does, perhaps, many of the new incentives and policies designed by the State of Colorado. Governor Polis in the Summer of 2023 signed an executive order directing state agencies to review their processes for where they may be slowing the development of housing. Gunnison County has suggestions.
Whetstone Incorporates many Strategic Objectives for the County
The Whetstone project checks many boxes for a county regularly recognized for Excellence in Performance Management by ICMA for a unique integrated approach to strategic planning. As a result, Whetstone has been vetted through the lenses of sustainability, fiscal leverage, walkability, maintenance, and access to public transportation. Cattles’ full title is “Assistant Manager overseeing Sustainability and Operations” which is evident as he describes these varied aspects of the project. It also meets some of the county’s objectives in addressing the Gunnison Valley Climate Action Plan which “provides a pathway to 50% emissions reductions by 2030 from the 2015 baseline according to the County’s website. “We are committed to no gas on this site,” says Cattles. The housing will be entirely electric with no natural gas. “We’ve been electrifying buildings for a while. Most county facilities are already off gas appliances and heating.”
The Whetstone project has modern city planning elements that have already been thoroughly vetted by the County Public Works department which intends to maintain the Traditional Neighborhood Design of narrow streets, walkable sidewalks, side street parking that plow drivers in the snow country tend to abhor. “We went through the site methodically and came up with a snow removal plan,” says Cattles “and we continue to receive critical feedback and evolve the plan, we want to make sure what we ultimately land on is the best design we can come up with.” The internal negotiations by the County with their own Public Works underscores that even a project led by one department has regulatory and timing hurdles to clear within its own organization. If the Town of Crested Butte decides to annex, Cattles had feared these negotiations about street design would start again from scratch, but because the town was “in the room” for snow country design process makes it less likely the town would re-review and write such details into an annexation agreement if it chose to annex instead of serving the project extraterritorially with utilities as the county desires.
Situated at the intersection of State Highway 135 and Brush Creek Road at the upper end of the valley, the project is adjacent to “an intersection that has been on our list for a number of years to upgrade” according to Cattles; “the location gives us some land and tools to do better” meaning a better transit stop for the area, a round-a-bout for better traffic circulation, and an underpass for safe pedestrian passage, especially during Gunnison’s famously cold, snowy winters. The intersection solution enables the right of way for a round-a-bout to make the project “transit oriented” while improving traffic circulation on the only way in and out from town. The ghost of a past project on a neighboring property has already taught the county some lessons. Cattles says that Whetstone emerged “from another failed project called ‘Brush Creek’ on a similar, neighboring parcel. Part of (that project) was that we had this co-ownership structure with several other owners two of which were other governments, and we couldn’t agree on some issues. It escalated to where the project failed.” That project had a partner developer that bailed after “incredibly detailed discussions about storage, architecture, and committing to so much detail” and additional costs that the private developer walked away after the first step of entitlement. It taught Gunnison County a lesson that has brought them to where they are now: be the developer; be disciplined about adding costs and be honest with the community about what the project can and cannot sustain, own and manage the project which can be an asset to be leveraged for other projects.
Can Affordable Housing Be Expected to Pay its Own Way?
Some argue that residential development never pays its own way since long-term assets like streets, underground utilities and other infrastructure deteriorates over time, leaving maintenance and replacement costs as a burden to taxpayers greater than the new income generated by residents. Others posit that new residents visit local businesses, pay sales taxes, property taxes and generally propel the economy forward. The Sustainable Business Toolkit claims that 73% of money spent locally (at local businesses) stays within the community. In the distant past, cities would extend utilities and streets in a lot and block pattern expecting developers would build and sell houses to grow the city. That was a basic approach to economic development in the last century. Over time all of the costs of development became the role of a Community Building developer.
That debate has led local governments to traditionally expect developers to “pay their own way,” at least covering clear up-front costs. That hardline approach gets tested when it is a local government on either side of the table. Increasingly local governments are looking further out, seeking to negotiate for new developments to cover every conceivable cost they can foresee and writing provisions into the annexation and development agreement. That document usually outlines who is responsible for maintaining what infrastructure elements in the future the town or the metro district or in the case of Whetstone, the County will pay for in the future. Inevitably there are liabilities in absorbing the assets paid for by debt a private developer, usually that translates to passing the costs on to those new residents through a new metro district and homeowners association. Public entities have made adjustments over time to this model by cost sharing and partnering with private developers when it comes to affordable housing construction.
Gunnison County, though it has considerable experience and expertise in housing does have a private partner in Servitas, a “minority and woman-owned LLC” according to the project website, (www.whetstonehousing.weebly.com). The county has contracted with Trestle Strategy Group and Williford LLC to conduct “extensive outreach and technical exploration to create a Sketch Plan that was approved according to the same source where the concept site plan can be found. Though that expertise can be imported, the same cannot be said for the construction workers and such foundational services as concrete plants and truck drivers. Cattles says, “our economies are not working well, especially in construction.” Unlike the front range, “there isn’t a workforce to draw from nearby.” This tests the concept of dollars invested locally recirculating at a high rate.
“Whatever the county does, there is so little workforce available that basic functions of the construction economy are not functioning. We are down to one batch plant in the valley. The other couldn’t keep staff. Even the one operating goes through periods without enough drivers. That is just the construction economy faltering foundationally.”
Cattles hopes that the county building Whetstone and other projects, “primes the pump,” for the private market. “We need to do that in mountain towns.” In other words, as opposed to “development paying its own way,” government is paying the way for new development now, and learning other lessons.
The Town of Crested Butte Approaches County Project with Caution
What would give a town with a population of 1,550 and 1,171 housing units, roughly 17% of which are Short Term Rentals pause about adding another 240 units of dedicated affordable housing? John Cattles, Gunnison County Assistant Manager who with Cathie Pagano, another Assistant County Manager is steering the Whetstone project through the entitlement process appreciates the cautious approach taken by his peers. There are those at the Town of Crested Butte concerned about financial risk, others focused on the engineering and others who wanted to weigh annexing the property. Annexation is the point at which a municipality has the most flexibility and control in the review process, and rarely will it separate parts of the development negotiations from an entire package wrapped up in one Annexation and Development agreement. The County hopes to either sidestep or postpone the annexation question until it can get a project approved.
Shay Early is professionally cautious, as one might expect from an engineer responsible for the financial viability of a small municipal utility enterprise that must be supported by a few hundred users. Early is Public Works Director for the Town of Crested Butte, he says “the town has a lot to weigh with how it operates to serve the Whetstone project beyond the simple idea of a $10 M, two-mile extension of water and sewer system. The current water and wastewater system of the town is gravity fed. To serve Whetstone which is below the new wastewater plant will require lift stations and pumps.” These, Early says, are more complex and costly than what they now manage. Even with the County assuring the town that it will cover all the reasonable costs that can be foreseen, that still leaves a lot of uncertainty over the next 30 years.
Early recently estimated the towns utility system needing over $61M in Captial Improvements in the next 19 years. A new wastewater plant recently was estimated to cost $8M. Instead it came in at $17M after significant scope reductions. He just made the case in September 2022 to town council to increase in-town water rates by over 50% to set aside funds for aging infrastructure that dates from the 1960’s and 1970’s.” That was before accounting for Whetstone. Most of the existing water and wastewater systems are nearing the end of their useful life, which contributes to how the town approaches new development. In the news article, Early is quoted as saying, “some water flow pipes installed in the 1970s were basically a mystery” (like a lot of what occurred in the 70’s).
By law, the town of Crested Butte is the only water and wastewater utility option with capacity for the project 2 miles down valley. Towns don’t get to choose when a project is proposed, they do need to be sure they understand what they are getting into with additional infrastructure. In addition to the construction costs and the operating costs of the new system, as well as the long-term replacement costs.
In addition to new growth the Town of Crested Butte must weigh unforeseen costs that seem to come down every few years from CDPHE, the Colorado Department of Public Health and Environment which is charged with seeing to the air and water quality around the state. CDPHE regulates wastewater and water quality. Recently, staff at CDPHE revisited existing regulations for nutrient levels and ratcheted up the calculations impacting nearly every utility in the state. “Even if a town has diligently kept up with the costs (of aging infrastructure), knowing these requirements are coming down the pipeline, how do you adjust to a 10% to 15% water quality or wastewater standard mandate from the state?” These seem to come around every decade or so. Then there is the factor of rising cost of construction materials for water utilities. Construction costs have skyrocketd. “We decreased the cost of our wastewater plant and it still doubled in cost,” says Early referring to the 110% increase between engineering phases. The costs are real to both the Town and County. Both parties understand someone will need to pay. In most private developments, these eventually become a burden on the homeowners.
Cattles said that months ago the conversations started with utility system capacity, then the annexation question arose. During meetings the Town Council agreed on “a friendly solution, to agree to provide utilities first and annex later” which is one exception they would be highly unlikely to do with a private developer. “I give them credit,” says Cattles, “they (the town) had to trust us. We asked, ‘what are the potential pain points for you guys if you annex in the future’ and we will work with you to create plans that work for you. We agreed to negotiate.” The town and the county are each relinquishing some certainty and control in this “friendly solution.” That trust has been earned. As of October 2023, the Town of Crested Butte and Gunnison County have each compromised, allowing the project to proceed across one hurdle.
As of October 2023, it appears that the town and county have come to agreement with as John Cattles, Gunnison County Assistant Manager says, “we are agnostic about annexation. What we are asking for is water and sewer services so we can build. We have gotten there with conditional approval. The terms are performance based. To me that is an engineering problem. The political hurdles we have more or less gotten past. The County is paying for everything (not covered by grants).” One condition of the towns is that the County do a fiscal study to prove that the tap fees charged will be sufficient to operate the site and maintain it. As an exercise, “that makes it pretty simple,” says Cattles, “we just look at a 30-year horizon for the plant and would those fees be sufficient? If not, (the town) may have to add a special fee for the project.” Existing utility customers for the town who have just taken their lumps will expect that this affordable housing project “will pay it’s own way” when it comes to future unexpected costs related to the utility extension.
Sympathetic to the County’s predicament as he weighs the costs to the town’s existing utility customers, Early says, “apply that to an affordable housing project. Someone is going to come out losing in the end. It negates the ability of someone to afford the affordable housing project. To build and then sell $400,000 units for a project with deed restrictions.” The math just doesn’t add up if this were a private developer. Covering all the costs and coming out on the other side with a product that must be affordable by definition. Early says, “That is a problem he isn’t paid to solve.”
Colorado Governor Jared Polis’ Has Ideas for More Housing
How a story such as Whetstone sounds under the golden dome 4 hours away in Denver is something of a mystery to rural resort counties involved in affordable housing. Governor Polis, for one, doesn’t think the system for producing housing is working. His approach to the uncertainty in the housing market it appears from the failed SB23-213, is to take decisions out of the hands of both the Town and County in such cases as Whetstone. What doesn’t translate well to the high country is that the Governor appears to believe the primary issue is government processes getting in the way of a private development sector that is chomping at the bit to build thousands of affordable homes as soon as some new state laws can be enacted. That robust private sector construction economy is not apparent in Gunnison Valley.
Last year’s housing bill, SB23-213 was an ambitious kitchen sink full of reforms many of which passed or were proposed in nearby Western states. Those ideas include abolishing single-family zoning, allowing up to 6 units on what had been a single-family lot, making Accessory Dwelling Units a use-by-right, various methods for increasing density around transit-oriented locations as well as requiring fast track review for housing. While the planner-speak may not set off alarm bells to the public like “defund the police” that doesn’t mean these ideas are any less radical than the alternatives to traditional policing that are also being tested across the country. Lengthy and tedious as it has become, the current land use review system for new development including affordable housing projects provides ample opportunities for public input. Of course, that may just be the problem.
The Gunnison board of county commissioners was hardly alone in publicly opposing the Governor’s housing bill last year. In that they were joined by representatives from the Town of Crested Butte and associations that represent them such as Colorado Association of Ski Towns (CAST) and the Colorado Municipal League (CML). In the spring of 2023, representatives from local governments lined-up for a committee hearing at the Colorado legislature where 300 speakers provided over 12 hours of testimony (mostly) against SB23-213. That bill which Colorado Governor Jared Polis conceived with a host of reforms to the local land use process, in many cases limited the time or extent to which local government could review a housing project. The intent was to pry back a lot of the “red tape” baked into the kind of processes that Whetstone seems to be mired in currently.
The response from local leaders? Preserve “local control” because locals know better than the state what is best for their community and can protect or advance those local interests better than any state law.
Gunnison County has a strategic plan for building housing that has learned from being bruised through navigating their own processes. Local governments have ramped up their response to the housing crisis considerably since 2020, the year in which Short Term Rentals, COVID and remote work converged to accelerate the housing affordability issue and drive out long term locals and with them, much of the workforce. These issues have been simmering for years. Towns, counties, and housing authorities are innovating, rapidly adapting and making unprecedented progress on housing.
The success of Gunnison County’s effort to build Whetstone is very much wound into funding from the state while on the other hand being hamstrung by permitting by state agencies. Besides the $10M TAHG grant awarded by the Governor’s office, the County also applied to the state for a Transportation Alternative Planning (TAP) grant to secure $3.1 M for a pedestrian underpass where the development connects to State Highway 135. The first application for that funding was denied. To a motorist, a connection to a state highway may just be pavement, signals and signage. To an engineer or maintenance supervisor at The Colorado Department of Transportation charged with maintaining a vast highway system each one is a complex question requiring a permit for consideration. Another agency, the Colorado Department of Health and Environment will not allow the County to even submit a permit for the wastewater lift station until it has a signed utility agreement with the Town. The existing MOU between the town and county is essentially an agreement to work together; not a contract. At the point that the County has an approved agreement of a fully engineered plan to supply water and treat wastewater, CDPHE by it’s own rules can only then begin a state review process that the county’s consulting engineers estimate could take a year or more for approval. That could mean the 2024 wildflower season could turn to fall colors into another ski season before a permit is issued by CDPHE for the 2 miles of underground utility construction to begin. No other work can be done until that work is completed, creating a major logjam in the process. Cattles says, “(4-12 months) is a range that is impossible to plan around. We need to issue debt. And we need a permit from the town. It is a very step-by-step process. We hear (the state) is very backed up on those reviews.” So while wary of the state’s intervention in housing policy on one hand, local governments are somewhat dependent on the state for supplemental funding for these projects on the other hand.
Colorado has been here before. The state pre-empting the local review by local governments of a site-specific project where neighbors have significant sway upends an accretion of land use policy that dates from the early days of the last century. Zoning was made legal by a Supreme Court decision dating from 1926 and has only become increasingly layered with comprehensive plans, building codes, environmental regulations and review by multiple agencies. There are layers upon layers of review of any project in a project like Whetstone that has a town public utility, a county land use process, and at least three major state agencies involved. Some in the public argue this complex process is not transparent enough. Planners who manage the regulatory and review processes for local governments often see it differently. The public holds significant persuasive powers over local elected officials. The system is not designed for speed. Governor Polis recognizes that that accretion of policy is no longer serving the Colorado economy. Then there is the equity and discriminatory angle: for those looking at state pre-emption from an urban view, they can point to scholars who have argued that zoning has been used as a discriminatory, exclusionary tool confirming bias against lower income and minorities and created stale, inefficient suburbs. The process has allowed public input to enforce a status quo bias on change, by allowing plenty of input for “Not In My Backyard” (NIMBY) opponents of a project. Though they come from a perspective of grievance, NIMBY’s have become so powerful a force in today’s public land use system that many see them as the primary impediment to affordable housing.
Undaunted, Governor Polis has promised to return to the legislature again, saying in The Atlantic July/August issue that solving the affordable housing crisis in Colorado is “beyond the capabilities of (local government) even if there’s a city council or mayor with the best of intentions.” The Governor admits those leaders want to solve the housing shortage, while emphasizing their inability to do so at scale; “The thing is, they’re not doing it.” Essentially, the current system is an impediment to the construction of new housing. Interviewed inside St. Cajatan’s Church by Jesse Paul of The Colorado Sun on September 29th, 2023 at SunFest, Governor Polis “doubled down” repeatedly when asked about coming back with another bill saying, “213 didn’t go far enough. It really needs to be bigger and bolder.”
Gunnison County Assistant Manager John Cattles, who is spearheading a 240-unit project near Crested Butte, could argue that Gunnison County actually is “doing it” when it comes to housing. Since 2019 the County’s built 102 units and have another 32 in process for completion in the summer of 2024, 58 of which are owned and operated by the County, the rest were developed and are operated by a developer through a public-private partnership. Reflective already about a process of developing state housing policy that hasn’t yet played out fully in relation to what he has experienced as the developer of Whetstone, Cattles is guarded. He points out that the Gunnison County commissioners, his employers, came out strongly against the Governor’s housing bill last session, but, he says, “as one government trying to do housing in the boundary of another jurisdiction, the governor may have a point; Entitlement processes can be improved but there are complex intersecting issues, engineering, and approvals and oversight that simply overruling local land use and zoning control won’t affect.””
Gunnison County Retains Housing as a Regenerating Asset
As part of the plan to finance Whetstone, the county will be using the rent revenue from Sawtooth, another 50-unit project self-funded by the county utilizing some of the one-time revenue and sales tax increases many local governments have experienced over the past 3 years. Owning a property “is a huge asset, and we shouldn’t just be giving these things away to developers to take profits if we can find a way to keep revenue generated by projects and reinvest into the community,” says John Cattles, Gunnison County Assistant Manager. Having a cost-coverage model allows revenues to be re-invested in the community as opposed to a profit-based model where profits would be extracted. Gunnison County is self-financing, with some assistance from the DOLA Division of Housing. “We are holding the debt. Our goal is for the project to be a sustainable revenue source based on rent revenue to pay down debt. We have done various public private partnerships and LIHTC, but we are advising our board to be careful” of those models. With this approach, “we leverage public dollars so that the County can create longer-term benefit from public ownership.” Financing and operating the housing projects allows the county to serve renters “as low as 80% AMI.” Cattles points out that issuing municipal debt allows the county to borrow at an interest rate often–2 points below the private sector. In other words, the County has a vision far more ambitious than just building Whetstone. That is, if they can get it through their land use process and three state agencies in a timely manner and start building during a brief construction season at 9000’.
As the public sector struggles to develop enough affordable housing, revelations about the “developer-side” of the public land use process are emerging to those who usually manage the other side of the review process. Cattles and Gunnison County believe strongly that the best way to build “affordable” housing, is for the public sector to build it.
One Colorado state law on housing policy is already in effect. How it impacts or doesn’t impact the speed of local government review of land use involving housing is yet to be seen. Fast tracking housing is a key element of Proposition 123 which created the Colorado Affordable Housing Fund. That is being implemented now by DOLA and the Colorado Housing Finance Authority (CHFA). There will be three rounds of funding for housing from 123 funds. Starting this year many local governments are agreeing to meet certain percentage goals to build a specific number of affordable housing units each year to be eligible for the pool of funds. In the next rounds, there may be less participation as the law requires participating agencies not only to meet the unit goals but also to implement fast tracking of development proposals. For example, the considerations being made by the Town of Crested Butte about how Whetstone will impact the long-term viability of their utility fund, and future impact on customers don’t seem too containable in a fast-track box, nor do state agencies that take 12 months to review a permit or 6 months to issue a grant contract check those boxes for fast tracking. This is one of the policy experiments coming from the state that will test whether the carrot of some additional funding and the stick put to local governments with lengthy review processes will impact the supply of affordable housing. It is a direct call for local governments to “get out of the way” of the private sector.
When State Agencies Delay Affordable Housing Projects
Red Tape. Gunnison County Assistant Manager John Cattles and Town of Crested Butte Engineer Shea Early through interviews for this project each brought up one thing the two entities agree on—the challenges of working with certain state agencies whose approvals are crucial to the timing of key milestones in the development process for The Whetstone Project. Like municipalities and counties, state agencies also review aspects of a new development.
Municipalities and counties during development review commonly shift all or part of the responsibility and cost of intersection ‘improvements’ near a new project to the private developer when a traffic expert can deem the new ‘trip count’ from that development to be tipping an intersection beyond an acceptable rating. This is common in the ‘development-pay-its-own-way’ philosophy. Because those expectations become contractual, often backed by a letter of credit, that government agency remains on the review side of the equation rarely experiencing the pain points of delays. On the other hand, when that agency or a local partner government agency is the developer, this can alter how those agencies view the pace and detail with which a state agency reviews the project.
In the case of the Gunnison County affordable housing project “Whetstone,” the county itself is on the hook to redevelop the State Highway 135 access “so it aligns with the transportation plan in the valley.”
One major plus of the Whetstone development is proximity to transit. Gunnison Valley RTA has free 30-minute bus service up and down the valley which is vital to serving this new community and the affordable housing calculous. The County is leading the conversation with CDOT. CDOT also has a review process. The Colorado Department of Transportation (CDOT), Cattles and Early say “acknowledges” what these entities are trying to do for this future intersection including a pedestrian underpass and incorporating a bus stop. Both noted that the CDOT Access Permitting process is “not mountain friendly,” clarifying that the pedestrian elements they expect may work in the city but “are destroyed by plows creating a need to maintain but there is no money to do so; and the approval process is cumbersome.” The irony? Though the Governor seems to be asking for state agencies to streamline any processes related to affordable housing, no one wants to throw a state agency that they need to work with under the bus.
It may not be obvious to most that CDOT could have any impact on the cost of housing and development. CDOT owns and manages State Highways that connect rural towns throughout the state. CDOT manages 23,000 miles of rural highway throughout all seasons. Those highways often act as a main street for a few blocks through a town. In the Town of Gunnison, both of main streets are state highways. Though flexibility has improved in recent years as towns work on pedestrian and bicycle mobility plans, CDOT management plans and urban sustainability ideas from their planning office don’t always align with local plans.
The CDOT part of the equation is likely to be streamlined soon if the Governor’s office follows through on what it says. The state has ordered departments to review state processes according to Elani Angelides the Governor’s point person on SB23-213 speaking at a CML conversation on upcoming housing legislation. That became clear when Executive Order D 2023 014 Concerning State Programs that Support Strategic Growth was issued ordering stage agencies to “inventory each Relevant Agency’s own policies, plans, procedures and rules for programs that provide support to local government partners… (that) support housing development, transportation…water infrastructure… (IV B). It was a major announcement that landed somewhat underwhelmingly. Though 9News reported the order will reduce the amount of time the Division of Housing within the Department of Local Affairs (DOLA) has to approve loans and grants from 240 to 90 days in order to speed up construction of housing, if that were to be the only state agency outcome, the gesture will fall flat for local governments working with state agencies such as CDPHE and CDOT. To his credit, the Governor appears to intend that the order to be much more broadly intended.
It will probably come as no surprise that no state agency is looking at new developments to assess whether there is enough water to serve that development. That is up to the Town in this case. Water supply is another factor that concerns local governments about state-level edicts from a bill such as SB23-213 which was mostly silent on water availability while requiring fast tracking housing through agencies who must make that determination. It is likely that state laws ‘streamlining’ development will run headfirst into a local water provider who has no more capacity. In Colorado, water rights are sacred. Supplies limited. Certainty is scarce as the region grapples with the impacts of drought, climate change and legal obligations to protect water for downstream users. Utilities are aware as they approach the limits of their supply, but there are so many variables about actual usage, whether tiered pricing impacts use, or outdoor use restrictions, for instance, that it is difficult to state with certainty, “we have enough water to serve X number of additional units,” nor do many have a system in place for prioritizing which kind of housing units should get the limited supply. The very uncertainty surrounding water supply transfers translates to intense caution by providers related to new development. In the case of Whetstone, Crested Butte has determined that they have enough water and water rights to serve the County’s Whetstone project. Many water utilities believe that the drive for more housing is on a collision course with climate change and scarce water.
For all that–water scarcity and state permitting delays–the Whetstone project is still very much alive. Although the two local governments have different considerations that sometimes lead to conflicting positions, it doesn’t diminish that they absolutely share the common interest of building more affordable housing. Nor does it diminish that housing is currently the top priority of Governor Polis as well as leaders across the state at just about every level. Failure of this specific project at this time may not be the final word. Gunnison County is learning for the second time on nearby parcels that being a developer is no walk in the park. The silver lining for developers? The county now has experienced their pain themselves through experiencing their own entitlement process and those of other agencies firsthand. If nothing else, Cattles says there will be changes to Gunnison County’s own land use process.
It turns out that private developers have been right about a few things: public processes create uncertainty by being unnecessarily slow and burdensome; margins are thin; time and uncertainty cost money. If affordable housing is to be addressed as a community crisis, public entities must learn from experience as they navigate the process and come to understand that their traditional ways of doing business need serious reform.
When are those changes coming to Gunnison County? Cattles says, “Our BOCC isn’t comfortable making major changes to that process for our own project, they will reform that when they get to the other side.” Will they adapt rapidly enough to get ahead of the housing crisis? Will the Governor succeed in passing additional state legislation that greases the process? All that is yet to be seen. One thing is for sure, Gunnison County, in leading the Whetstone property through two cycles of development proposals is learning what is like to be on the other side of their own and their partners’ regulatory processes, and the other side is becoming all too familiar.
NOTE: Published first as a Series by the headings above in NWCCOG Newsletters from November – December 2023.
REFERENCES
Nettles, K (September28, 2022). County moves forward with whetstone affordable housing. Crested Butte News. https://crestedbuttenews.com/2022/09/county-moves-forward-with-whetstone-affordable-housing/
Harrison, A. (April 12, 2023) County awarded $10million for whetstone. Gunnison Times. https://www.gunnisontimes.com/articles/county-awarded-10-million-for-whetstone/
Nettles, K. (April 5, 2023) Gunnison county secures $10M state grant for whetstone. Crested Butte News. https://crestedbuttenews.com/2023/04/gunnison-county-secures-10m-state-grant-for-whetstone/
Reaman, M. (August 17, 2022) Crested Butte tackling new vacation rental regulations. Crested Butte News. https://crestedbuttenews.com/2022/08/crested-butte-tackling-new-vacation-rental-regulations/#:~:text=STR%20regulations%20were%20implemented%20in,Crested%20Butte%20residential%20housing%20stock.
Reaman, M. (September 28, 2022) Town looking for another 30% increase in water and sewer revenue. Crested Butte News. https://crestedbuttenews.com/2022/09/town-looking-for-another-30-increase-in-water-and-sewer-revenue/
Paul, J. (October 4, 2023) What we learned from colorado’s governor—including his position on some hot-button issues—at SunFest. The Colorado Sun. https://coloradosun.com/2023/10/04/jared-polis-sunfest-colorado-sun/
Colorado General Assembly. (2023) SB23-213. Concerning state land use requirements, and, in connection therewith making appropriations. https://leg.colorado.gov/bills/sb23-213
Demsas, J. (2023, July/August Issue). The Atlantic. Colorado’s ingenious idea for solving the housing crisis; and why local governments hate it.https://www.theatlantic.com/magazine/archive/2023/07/local-government-power-nimby-denver/674164/
Gunnison Valley RTA (2023) http://www.gunnisonvalleyrta.com/
Colorado Legislative Council Staff (2020). Colorado transportation system: infrastructure, organization, planning and funding. Research Publication No. 754. (p 1) https://leg.colorado.gov/sites/default/files/2020_transportation_handbook.pdf
POLIS, JARED, (August 21, 2023) Governor of the State of Colorado Executive Order D 2023 014 Concerning State Programs that Support Strategic Growth. https://drive.google.com/file/d/1J6H1W0j2MnN1FVwb8L5cG-qo41qbT-Xy/view
Sallinger, Marc and Beese, Wilson (August 21, 2023) 9 News. Polis announces executive order to address housing challenges. https://www.9news.com/article/news/local/next/next-with-kyle-clark/polis-colorado-housing-announcement/73-b5a46f2d-8628-4b64-b862-af9b90c243dc
El-Zeind, C. (April 23, 2022). Local economies definition: everything you need to know. Sustainable Business Toolkit.com. https://www.sustainablebusinesstoolkit.com/local-economies-community-development-social-capital/
