Affordable housing is no new story. People across America – in cities, small towns and everything in between – struggle to find a place to live that costs less than 30% of their gross income.
Colorado has the fifth-highest average rent in the country, at $1,594 a month. And 89% percent of Coloradans call housing an “extremely or very serious problem,” according to TIME.
Zooming in, Region 9 – which is made up of Archuleta, La Plata, Montezuma, San Juan and Dolores counties, plus the Ute Mountain Ute and Southern Ute tribes – needs roughly 907 homes annually for the next 20 years to meet current and expected demand, according to a 2021 assessment.
This figure doesn’t include the nearby Navajo Nation, which needs an estimated 34,100 homes.
“There’s a tremendous need for housing,” said Shak Powers, the regional project manager at Region 9 Economic Development District.
But he also said the region is in a unique position to meet that need.
“You know, everyone says we’re in the middle of nowhere and we’re going to suffer because we don’t have interstates, we don’t have rail, we don’t have major airplanes,” said Powers. “But when you look at us geospatially, we are equal distance to Denver, Salt Lake, Phoenix, Albuquerque and Las Vegas.”
What’s more, aside from occasional flooding and wildfires, the region is one of the most disaster-free areas on Earth.
“We don’t have tornadoes, we don’t have hurricanes, we don’t have earthquakes,” said Powers. “Because it’s so free of natural disasters, it is an ideal location for manufactured housing.”
Manufactured housing works out to be cheaper than traditional, on-site building because the labor that goes into it is less skilled and the houses are quicker to assemble.
“They’re built to the same exact codes as any home you live in or I live in, but they’re just built in a factory instead of assembling them on site,” said Eric Schaefer, the chief business development officer at Fading West, a Buena Vista-based manufactured housing company.
“We’re finding this is a quicker, faster, more efficient way to build affordable housing in our state,” Schaefer said.
Fading West puts up 250 to 300 homes a year. In rural towns, costs for such housing is up to 20% less than its stick-built counterpart, Schaefer said.
Powers called manufactured housing an untapped economic opportunity for the region.
“The economy in the western part of the region is like a three-legged stool. You’ve got agriculture, you’ve got tourism, and you’ve got oil and gas,” Powers said.
We’re in a 20-year drought, which has impacted the agricultural leg. The tourism leg took a hit during the pandemic, though it has recovered, Powers said.
About 9% of Montezuma County’s revenue comes from oil and gas. That revenue is in danger because it comes from property taxes, which the state is reducing, Powers said.
Plus, Kinder Morgan Inc. reduced its carbon dioxide production, which in turn impacts how much they pay in taxes.
Manufactured housing stands to diversify the area’s portfolio.
“Now is the time to diversify what we are doing economically,” said Powers. “Detroit was told for years that they needed to diversify and didn’t. And, of course, now they’re a Ghost City.”
Schaefer said the relatively new industry uses all things that go into manufacturing and applies them to housing.
It’s possibly a part of the solution in solving the affordable housing crisis both in our state and nationally,” he said.
As it stands, only about 3% of Colorado’s new housing developments are modular, or factory built. Nationwide, it’s 5%.
Earlier this year, Gov. Jared Polis awarded $38 million of funding – through Proposition 123 and the Innovative Housing Incentive Program – to support eight modular housing manufacturers across the state, which will build over 4,700 housing units a year.
Polis said it’s “an important part of our work to increase Colorado’s housing supply and make sure our state has nice housing for every budget.”
Of that money, Fading West was awarded $2 million and Durango-based Timber Age got $3.8 million.
Ignacio, where the average age of homes is from the 1950s, recently partnered with Fading West to offer more housing.
The first phase of the Rock Creek project – 10 units available to residents making under 80% of the area’s median income – is set to be finished by the end of this year.
The second phase will add 11 single-family units and be completed sometime next year.
“We have a need for teacher housing, for first responder housing,” said Ignacio Town Manager Mark Garcia. “A lot of employees in the region live in New Mexico, Farmington and Aztec area, because it’s affordable and there’s none in our area. This hopefully will open the doors for those employees to live locally.”
Last year, Cortez, Mancos, Dolores, Montezuma County and the Ute Mountain Ute tribe opted in to Proposition 123, which opens the door to grants and low-interest loans to build affordable housing.
By opting in, they agreed to increase the amount of affordable home units in their area by 3% each year for three consecutive years, according to the city of Cortez’s website.
In Cortez, 3% works out to be about 30 affordable units annually.
By early to mid-September this year, the Piñon Project will start leasing out its one-, two- and three-bedroom apartments at 560 E. Empire St.
Though it’s not modular housing, Tawi Kaan, the building development, will be for individuals and families with income below 30% of the area’s median income.
The city’s need for workforce housing was heightened after its population grew 1.5% between 2020 and 2021.
“It’s not like the growth in the Front Range, but it was impactful for Cortez,” said Rachael Marchbanks, the city’s director of Community and Economic Development.
The rental availability rate here is less than 2%.
A 2023 housing needs assessment found that Cortez needs to increase its supply of housing of all kinds – low-income and luxury – because “the rate of housing production has not kept pace with jobs and population growth.”
The assessment emphasized a heightened need for folks in the “gap,” who “cannot afford housing at its current construction cost.”
“The majority of people in our region make more than enough to qualify for some of the lower-income projects, yet they don’t make enough to put down a down payment and qualify on a mortgage on their own,” said Powers. “And that’s the area, that missing middle – that really needs to be addressed.”
Timber Age, another company awarded state money, recently started renting a building off U.S. Highway 160 in Mancos where they are constructing their panelized wood products from local ponderosa pines.
They’re working with the U.S. Forest Service and get the wood for little cost, as it’s been thinned from forests in the area to prevent wildfires.
The wood they’re using, when delivered to Aspen Wood Products Inc. down the road, isn’t high quality stuff when it comes in.
And so they construct cross-laminated timber, which stacks planks of wood in opposing directions with each layer. Once the three layers are glued, it becomes a solid wood product.
With this stronger product, they build TAMBS – Timber Age Modular Building Systems – which are the completed panels that are shipped out and put together on site.
“What we’re doing is actually very common in Europe,” said Chris Hamm, the company’s vice president of building systems and engineering.
When folks in Boulder caught wind of it, they selected Timber Age to build dorm-style farmworker housing, set to be done around November. Previously they were importing cross-laminated timber from Austria.
The company is looking to build a factory out of their panelized product that could then be replicated and built around the country, specifically out West, where wildfire danger is heightened, and the Forest Service is thinning.
These areas tend to coincide with rural, lower income communities.
Timber Age hopes to provide housing for under $300 a square foot once they hone their model. In Boulder, prices creep up to $550 a square foot; in Aspen, such costs can reach $1500 a square foot.
Most of the modular home manufacturing companies started after recognizing a shortage of attainable housing.
“To build 24 houses in Norwood the regular way would’ve taken five or seven years because there’s just no one out there to build and it’s cold and there’s short building seasons,” said Schaefer. “We were able to build 24 homes in less than a year to the point people have already moved in.”
More attainable housing stems from these quicker building times and the repetitive, build-in-bulk nature of this style, Schaefer said.
“We still build to the highest quality,” he said. “If the homes are built very poorly and electric bills are through the roof, or whatever the case is, then people can’t afford them.”
So the homes pass building inspections and green tests. They’re energy efficient, too, Schaefer said.
“Think about it. Everything is built inside a factory … the lumber isn’t laying in the snow or sun. They’re really the highest quality houses being built,” Schaefer said.
At Timber Age, Hamm said the units are set up to be passive homes, cushioned with nearly a foot of insulation. They’re net zero ready, so long as there’s quality windows and electrical installed.
“We could have five more [factory-built housing] manufacturers in the area once we create the market,” said Nick Lemmer, a co-founder of Higher Purpose Homes.
Higher Purpose Homes is a self- and investor-funded modular housing company looking to build a factory in Montezuma County, specifically Mancos, sometime soon.
Lemmer said affordable housing fosters a kind of close-knit community they felt was dwindling away.
Schaefer said it won’t be these manufacturers, alone or together, that solve the problem of affordable housing.
“We need the municipalities, we need the government, the state government. Everybody needs to work together,” said Schaefer. “That will be the ultimate way you bring down the cost of housing. It’s not just the factory, it’s not just the guy pouring cement. The local governments need to make smaller lots so you can build denser. If it’s denser, then it’s cheaper. All these kinds of things go into why we are in this mess in the first place.”
