Affordable housing ‘not cost effective’ |

Affordable housing ‘not cost effective’

Alison Miller
Vail correspondent
Aspen, CO Colorado

EDWARDS ” It’s been said that no good deed goes unpunished. A cynical view, perhaps, but local resident Evelyn Pinney said she is beginning to see the truth in the statement.

Pinney and her husband, Rob LeVine, have partnered with Habitat For Humanity to build affordable homes in Edwards. The couple donated one-and-a-half acres of land to the nonprofit to build eight duplexes on, but numerous delays and hefty fees have Pinney feeling as though the project, known as Fox Hollow, may never materialize.

“We think Fox Hollow is a great project and want to see it through to the end,” Pinney said. “We don’t want to let Habitat For Humanity down, but from where we stand today something’s gotta give.”

Pinney and her husband bought the land three years ago and were given initial approval from the county to build a 21,000-square-foot commercial building, two employee housing units, two four-plexes and the eight Habitat For Humanity homes.

“My husband and I are just regular people,” Pinney said. “Some people may think we have a lot of money to do this, but we both work full-time to support this project. We took out a mortgage on the land, too, that we are paying almost $100,000 a year on for just the interest.”

After spending $1.5 million on development fees, Pinney said, they still can’t afford to break ground on the residential project.

“The chances are Evelyn (Pinney) is not going to make any money on this deal for a very long time,” Eagle County housing director K.T. Gazunis said. “She might not at all unless she has the staying power to see it through.

“In the development process you don’t break even or make money for years and years,” Gazunis said. “Sometimes it’s three years before you even break ground and have a chance to build something and begin to see a return on your investment.”

Just as the cost of living in the valley ” for gas, housing, food and recreation” has increased over the years, so has the cost of building, said Craig Nelson of Peak Capital Resources.

“If you can get financing for your project, which can be very difficult, you have to factor in the building fees and costs of materials and labor,” Nelson said. “It’s just not cost effective to build affordable housing. That’s sad, but it’s the reality of our situation in Eagle County.”

It’s close to impossible for anybody except the government to build affordable housing anywhere between East Vail and Edwards and break even on their investment, said Nelson.

The Pinneys were required to build a road between Fox Hollow and U.S. Highway 6. and must also build access roads so that property on either side of Fox Hollow can have access to the highway, Evelyn Pinney said.

“We paid $100,000 alone for water augmentation, and we’ve had at least six other fees I can think of off the top of my head,” Pinney said. “Plus we had to build a road. The county says they want affordable housing, but they need to be more flexible or nobody will be able to afford it.”

In addition to the development fees the Pinney’s have paid, the couple has not been able to sell enough affordable housing “credits” to other developers, she said.

“We were trying to sell the credits to offset the cost of giving Habitat for Humanity the land for their homes, but we have only sold two so far,” Pinney said. “We’ve had offers to buy the credits, but the county is so up in the air right now about development that we can’t really do anything.”

The money and patience one needs to get a development up and running until it turns a profit is all a part of doing business, Gazunis said. She added that starting with a good business plan that takes all the costs into consideration can help reduce the surprise that comes with the price of doing business.

Land donations to Habitat For Humanity and private affordable housing developments don’t come along very often, and the county should be more receptive to working with people who are eager to make the sacrifice, Pinney said.

The county’s assessor’s office reports the average selling price for a single-family home in Eagle County is hovering near $725,000, and the average yearly wage in the county is $62,682 according to the Colorado Division of Labor. As housing expenses continue to climb so does the demand for affordable housing.

“We should have more publicly underwritten housing, and what we have done has been successful,” Don Cohen of the Eagle County Economic Council said. “It’s easier for the government to fund, but it’s not without it’s problems for sure.”

There are too few parcels for the county or the towns to buy, as most of the land that could be built on is already owned by private developers, Union Pacific Railroad or U.S. Forest Service, Cohen said.

“Socially conscious private sector people who want to do something like this aren’t being offered incentives to take on projects like these, and that’s something we should definitely look into,” Cohen said. “It’s really tough and we haven’t really put out the welcome mat.”