For the past three decades, Gunnison County has been conducting Housing Needs Assessments. Each study conducted tells a similar story. Over time the need for more housing, especially housing for lower income households has only continued to increase. Looking back, the Great Recession only seemed to slow the growth of the increasing need and not actually decrease the need for more affordable housing.
The synopsis below captures Gunnison County housing needs trends through the lens of the past three decades.
The 1992 Housing Needs Assessment
In excess of 80 percent considered affordable housing to be a major problem, and 45% indicated it was either serious or the most critical problem. Looking at just the North Valley, higher percentages were found.
Property management companies indicated 100% occupancy rates in summer and winter, with less seasonal variation than expected. Long wait lists were common. One explanation was that long-term rental units were being put on the market. There were 92 unfilled jobs.
Overall feeling that supply was not keeping pace with demand and that “there was virtually no supply in the lower, affordable ranges.”
Employers explained that housing for seasonal employees was difficult to find. However, most employers agreed that taxes should not be used to finance affordable housing.
In conclusion, more affordable rental housing is needed for year-round residents. The cost of rental housing is high relative to incomes making it difficult for renters to save for down payments.
The 1999 Housing Needs Assessment
During the 1990s, the county’s population grew at 2.4%, jobs at 4.9%, and housing at 3%. Thus, housing development did not keep pace with job growth causing commuting to increase and the number of unfilled jobs to grow.
Similar to the 1992 Assessment, rental occupancy in the North Valley was 100%. Again, one reason cited was the fact that long-term rental units were being put on the market. In fact, 10 percent of renter households lived in units that were listed for sale. There were 197 unfilled jobs.
Approximately 21% of Gunnison County households are cost burdened by their rent or mortgage payment. The lack of adequate down payments is often cited as a major obstacle to home ownership.
An additional observation of the 1999 Assessment noted that the composition of housing supply does not match households in the county. With no apartment projects in the county, renters reside in homes built for owner occupancy.
The 2009 Housing Needs Assessment
Demand for seasonal vacation homes contributed to very strong sale price growth. The Great Recession caused more second homeowners to be more willing to make their units more available for long term rental.
Rental price increases were in line with income growth throughout the decade. For sale prices increased significantly during the 2000s and income growth only covered about a third of the increase in home ownership costs.
The 2009 Assessment determined that 350 new households would be need housing by 2014 and by 2019, there would by a total of 720 new permanent households in the county.
The 2016 Housing Needs Assessment
The percentage of residential units in the Gunnison Valley housing local residents has been decreasing rapidly. Second homeowners appear to be using their homes more often and short-term rentals have become an alternative to long-term renting for some.
Rental occupancy remains just below 100% causing rents to rise sharply and continue to rise. This Assessment found 360 unfilled jobs.
Nearly 70% of employers indicated the lack of affordable housing is a serious or most critical problem in the region. In fact, one-fourth of all households in the Gunnison Valley are cost burdened by their housing payment.
The 2016 Assessment determined that 960 new housing units would be needed by 2020. In comparison, the 2009 Assessment estimated 350 new units would be needed by 2014 and 720 new units would be needed by 2019, as showing in the chart below.
Future Forecast to 2040
Forecasting future housing needs well beyond 2020 will allow us to make informed decisions today. Our research projects population growth, housing construction and economic development through 2040.
The Gunnison County Assessor’s database accounts for all units within the county as well as vacant parcels by location and type of use. The tax bill address can be used to estimate whether units are owned by local residents or not. Other county data shows whether the unit is likely to be used as a short-term rental.
From 1992 through 2016, the county’s population grew at an annual average of 1.8 percent. Over the past decade, the growth rate has averaged 1.1 percent annually. The chart below shows an annual growth rate of 1.2 percent from 2017 through 2040 in addition to actual populations prior to 2017.
Building permits show past constructions rates vary considerably depending on economic conditions. The 2014 Indicators Report shows single family permits in the north half of the county ranging from less than 10 per year to over 60. Total permits range from 100 to 150. The forecast in the chart below assumes new residential units are constructed at a rate of 41 per year. While this is a moderate estimate in the short run, over time this amounts to an ever-smaller percent growth resulting is a conservative estimate.
The chart below shows the growth of population relative to the growth of residential housing units indexed to 2017. The total number of units in 2017 is 4,823 which is remarkably similar to the 4,914 figure reported in the 2016 HNA, which was based on DOLA estimates from 2014 and 2016. The total number of short-term rental units increases from 1,178 in 2017 to 1,638 in 2040.
By 2040, population will have increased by 32 percent but the residential housing supply will only increase 18 percent. The result will be ever increasing housing prices and exacerbated housing problems. In future reporting, we will estimate housing price increases as well as impacts and benefits.
The 2016 HNA estimates a housing shortfall in the north half of the county to be approximately 300 by 2020. Based on our estimates of population and housing unit growth, we estimate the shortfall will increase to 704 by 2040 as shown in the chart below.
Our future forecasts are consistent with the four previous housing needs assessments. Only by building enough affordable housing will we meet Gunnison County’s affordable housing needs.