Over the past year, the Estes Valley community has been fortunate to have acquired significant additional workforce housing inventory.
In addition to the Prospector Apartments, a private development on South St. Vrain, the Estes Park Housing Authority has acquired several vacation rental properties, which have been converted to workforce housing, including the 91-unit Fall River Village development.
That was made possible by the community support and enactment of ballot initiative 6E, which provides funding specifically for workforce housing and childcare through an increase in the lodging tax on our overnight visitors.
The addition of this workforce housing is a great achievement, but it is not without a downside.
Prior to the Fall River Village acquisition, visitors at Fall River Village annually contributed about $250,000 of town sales taxes and $270,000 of local marketing district lodging taxes on rentals, which will now be lost.
While some of that loss may be recovered through increased occupancy and increased prices on other lodgings in the community, there will certainly be at least a short-term revenue loss for the town and Visit Estes Park.
In addition, since the new owner of Fall River Village is a government entity, we will lose over $400,000 of real estate tax revenue, including about $160,000, which had gone to support our school system.
The benefit of adding affordable workforce housing is undeniable. Having our workforce live in the Estes Valley contributes significantly to our sense of community and in securing the workforce necessary to service our local tourist economy. Approximately a third of our local workforce commutes in from down valley – a situation which does not facilitate a sustainable workforce.
However, it raises the question of public policy regarding how we replace this lost revenue to maintain our town services for the community.
While general economic growth may provide some of that revenue, new revenue sources are needed.
The most obvious replacement revenue will come from future commercial and accommodation development or redevelopment, which will add sales tax, lodging tax, and increase real estate taxes.
While the community is divided about development, rezoning, and annexation, some measure of these activities will be necessary if we hope to maintain our services to the community.
Streets do not pave themselves, nor does wishful thinking fill potholes. Police and fire protection are expensive. School teachers must be paid competitive salaries. Our water and power distribution systems require adequate ongoing funding to maintain reliability and affordability.
Many neighbors express the desire to maintain the “quaintness” of Estes Park. Unrestricted development would threaten that, but managed development can enhance the Estes Park experience.
The workforce housing and the commercial and accommodation development we need will not turn Estes Park into Vail or Breckenridge.
Change is not only necessary but desirable. It is also inevitable. The median age of our housing stock is 45 years and will need to be renewed and redeveloped to ensure a vibrant community.
We must look forward to the next 20 to 50 years as we make decisions concerning development in the Estes Valley. Many of us will not be present to see it come to fruition, but we owe it to our successors to do everything we can to responsibly develop a vibrant local community.
The responsible approach here would be to do full analysis of the economic bottom line of converting vacation rental properties into town-owned (Housing Authority) workforce housing.
We lose property tax revenues but we gain sales tax revenues from all the workers and their families who now live and spend in Estes Park instead of Loveland or wherever. We gain state per-student $$ for increased enrollment in our schools.
It is anybody’s guess how much, if any, we will lose in lodging and sales tax revenues from visitors. Our annualized lodging vacancy rates are well below 50% so many displaced visitors could backfill into existing lodgings. Higher occupancy rates for existing lodgings would certainly be an economic boon for our many lodging small businesses.
Then there is the opportunity for owners of second homes, many of which stand empty for most of the year, to put their properties into the vacation rental pool. I am assuming that converting vacation rentals to workforce housing has freed up a pile of STR licenses. It is hard to believe that these licenses will not be snatched up, with the associated replacement of lodging tax revenues.
Before we panic about lost tax revenues, rezone low-density to high-density and irreversibly pave over our precious open space and vacant lots, let’s be responsible. Let’s gather a little data and do a proper analysis of the full economic picture.