Longmont advocates address soaring housing prices

Rising home costs and questions of affordability have brought the attention of business owners, developers and real estate brokers bearing down on Longmont. 

“Supply and demand is of fundamental importance in what’s going on here. There’s a lot of demand in Colorado,” said Eric Wallace, co-founder and president of Left Hand Brewing Company.

Wallace is also a founding member of Prosper Longmont, an advocacy group composed of Longmont residents, business owners and civic leaders on the issue of workforce attainable housing. In this instance, workforce attainable housing refers broadly to housing options not tied directly to income-restrictions, like capital ‘A’ Affordable or Inclusionary housing, Wallace clarified.

Wallace posits without attainable housing, employees with lengthy commutes to Longmont jobs creates shorter tenures which have significant impacts on local business. With a higher turnover, businesses assume the costs of recruiting and training new talent while effectively reducing experience on staff, Wallace said. Longer commutes also increase travel expenses for employees, both financially and in time spent getting back and forth to work.

A lack of inventory available to the workforce is a part of the problem, Wallace said. Without an inflow of houses for purchase, not just for rent, Longmont’s workforce won’t be able to gain equity or build generational wealth near the businesses that employ them. 

According to a survey from the Federal Reserve in 2020, the median net worth of a homeowner was around $255,000 while a renter’s net worth was only $6,500. Owning a home and building financial equity encourages residents to invest socially within their community, along with greater civic engagement, according to a 2012 report from the National Association of Realtors.

“Prosper Longmont is an advocate for workforce attainable, for-purchase housing because that’s how you grow roots in your community, to build equity in your community and own your home,” Wallace said.

Wallace said Left Hand Brewing has employees all over northern Colorado, commuting upwards of a half-hour to get to work. In a blog post for Prosper Longmont, Wallace shared a study on the distance from Left Hand Brewing its employees commute and compared that data with the  length of employment between 2016 and mid-2021. In that study, Wallace discovered that the further away employees lived, the shorter the time they worked at the brewery.

“Prosper Longmont came together because we think one of the most effective things we can do to build long term economic sustainability and vitality in Longmont is to increase the percentage of people who live and work in Longmont,” Wallace said.

According to data from Longmont’s housing assistance program, the Area Median Income, or AMI, for a person working in Longmont $70,375. An hourly worker making minimum wage, $12.32 per hour, working 40 hours per week will only make $25,625 a year before taxes and other expenses, less than a third of Longmont’s AMI. The average salary for a teacher working in Longmont is around $50,000 a year, still well below the AMI for Longmont.

According to First American Title, the median list price for a house in Longmont was $689,120 as of Nov. 24. By contrast, in 2013 Housing Helpers noted the average listing price for a house in Longmont at $265,000.

Anne Dorozenski, a real estate broker with The Group, said she still sees inventory for sale in Longmont in the $400,000 range. Most of the inventory in that range are older homes in need of sweat equity, as opposed to something “shiny and new,” Dorezenski said.

Raising three children in Longmont over the last 30 years, Wallace said he’d like for his grown children and brewery employees to have the option to buy a house in town. Kevin Mulshine of HMS Development also said his daughter, a working adult,  can't afford to live in Longmont.

“The only way they (his children and employees) are going to have an opportunity to buy in Longmont is to build homes they can afford in Longmont,” Wallace said.

The working-class or middle-class encompasses a number of definitions and a variety of jobs from service and manufacturing positions to healthcare workers, teachers and more. According to sociologist Dennis Gilbert, the working class is made up of those in the 25th to 55th percentile of income. Pew Research suggests that a three-person household with an income of $110,000 is in the 55th percentile of Colorado residents.

Without attainable home prices returning to Longmont, working-class homeowners are pushing north and east to Larimer and Weld counties, moving out to Firestone, Berthoud or even Greeley. Wallace said his daughter, a volunteer firefighter, lives in Firestone because she can’t afford to buy a home in Longmont.

Prosper Longmont isn’t advocating for a solution to the housing issue that raises taxes or increases spending, according to Wallace, instead it is suggesting new inventory needs veer away from  single-family homes. Condominiums and townhomes are the way forward, Wallace said, filling in existing areas, redeveloping and building up instead of pushing at the boundaries and city limits. Vacant lots like the old Walmart off Hover Street are prime for redevelopment, Wallace suggested, bringing for-purchase housing to an area that already has restaurants, shopping and a movie theater.

While a lack of workforce attainable housing won’t impede Longmont’s future growth, it will have a significant impact on what that growth will look like, according to Jessica Erickson, CEO of Longmont Economic Development Partnership. 

Up until recently, Longmont had a competitive advantage in attracting new companies over the rest of the region. With house prices climbing north of $500,000, that edge has been lost, Erickson explained.

“If we don’t address our current lack of workforce attainable housing, our existing workforce will no longer be able to afford to live here, and the businesses that employ them will eventually follow that talent to other parts of the region or country,” Erickson said.

The larger concern, according to Erickson, is any new businesses coming in — whose employees can afford local real estate —  won’t be companies with diverse job offerings to people of all educational, experience and socio-economic backgrounds. 

Though the issue is complex, some of the barriers to building attainable housing in Longmont are associated costs for builders and developers — one of the most impactful is time it takes to navigate Longmont’s development review process, Erickson said. 

“For example, time is money, and the longer it takes to get through the city’s development review process, the more it costs a developer and those costs will ultimately be added to the price of homes that are built,” Erickson said. “Anything the city can do to reduce speed to the market, the more affordably homes can be built and sold.”

Mulshine echoed Erickson when discussing the housing issue from a development perspective. Mulshine said Longmont was forward-thinking in its approach to housing, particularly with the 2016 Envision Longmont plan and the city’s Affordable Housing ordinance, but more work needs to be done in streamlining the development process.

Envision Longmont was a four-step plan to provide direction and guidance in Longmont, including planning, policies, growth management and implementation strategies. The Affordable Housing ordinance requires 12% of for-sale units to be permanently affordable at or below 80% AMI as determined by the city. The ordinance incentives builders and developers with fee waivers and reduced landscaping standards, among other things. While Mulshine lauded both programs, he felt a dedicated committee could improve the development process over all.

In the time it takes to develop land and pass through city approval, costs of lumber and materials continue to rise, Mulshine said. Developers and builders take on the burden of cost during a development and a construction timeline that could take three or four years before homes come on the market. Those costs eventually are passed on to homebuyers, he explained.

Mulshine said projects in Northern Colorado are typically in the three to four year range from land development to houses on the market. Reducing that timeline down to two years would help mitigate costs associated with land development and building projects, Mulshine said, allowing inventory to be sold at lower rates. 

Another issue Mulshine brought up was attainable housing inventory getting bought up from people outside the area.

“I don’t want to produce a supply of attainable housing and have everyone run in from Boulder or Superior,” Mulshine said. 

One of the solutions to a local supply of attainable housing, Mulshine suggests, is a limited-window offering to employees already working in Longmont. 

“I think you’re going to find the demand will be insatiable (for these properties) and so we want to see if we can get as many people employed in Longmont buying as we can,” Mulshine said.

Wallace and Prosper Longmont are planning to bring the issue of workforce attainable housing, along with proposals on how to solve it through city programs and policy, in front of Longmont City Council on Nov. 30.