Along the Front Range, and across most of the U.S., affordable units target those earning between 30% to 80% of the area median income or AMI, with 60% as a common definition.

That range reflects federal rules for using Low-Income Housing Tax Credits, and Denver adopted that definition in its inclusionary ordinance. But in resort areas, 80% up to 200% is more typical in inclusionary ordinances.

“You can be in the workforce earning 150% of the AMI and be nowhere close to being able to afford a home,” lamented Hannah Klausman, director of economic and community development for Glenwood Springs.

That 150% number works out to an income of $104,250 a year for a single person and $148,800 for a family of four in Garfield County. The median price of a home in Glenwood Springs is $862,500, according to the Zillow Home Price Index.

And things only get more expensive the further up the Roaring Fork Valley someone goes. In Carbondale and Basalt, someone making double the area median income will struggle to find a home or apartment, she said.

Glenwood Springs tried inclusionary zoning in 2001, but developers largely said pass, especially during the soft years of the housing market downturn. By 2011, the rules were suspended and by 2017 they were repealed.

But a 2019 Regional Housing Study found that the city of 10,000 people and 4,500 homes and apartments was short about 2,000 housing units, Klausman said. Between 2019 and 2021, both rents and home prices rose 42%, while incomes only rose 16%.

“It was a staggering number to come out of the study and it was a catalyst for realizing we need to implement tools, including inclusionary zoning to handle that,” she said.

By 2021, an inclusionary zoning ordinance was back on the books, requiring any developments with 10 or more rental units to set aside 20% of units as affordable to those earning 100% of the area median income. For-sale projects had to set aside a tenth of units as deed restricted and make sure 20% went to those working in the area.

The pandemic delayed things, but the first project built under the new rules, MountainView Flats, will soon provide 40 units, of which eight are affordable, she said. That is more than the prior ordinance did in 16 years.

In 2019, Glenwood Springs tightened the rules on short-term rentals and a year later it loosened rules on accessory dwelling units, which had been in place since 2013. Last year, the city created rules that made it easier for hotels to convert to residential units in exchange for deed restrictions, and this year it is considering rules to make it easier to add density.

But Glenwood also faces a balancing act. If it makes things too difficult, development could flow to areas with lower requirements and costs like New Castle, Silt and Rifle.

A criticism of inclusionary zoning is that it can make private development too costly or push it toward areas without requirements, an issue Denver will likely have to deal with. And like a big champagne powder day, the conditions have to be right.

“Whenever you introduce a subsidized component to a development project, it puts pressure on the upper price point to carry that,” acknowledged Tim Belinski, president of IND Ventures and a developer in Basalt.

Higher interest rates and higher construction costs have only added to the difficulties developers face in trying to make projects pencil out financially.

But Belinski said inclusionary rules have been part of the equation for so long in the mountains, and the math mostly works, assuming land is available. Resort residents also are acutely aware that the economy needs to have enough workers to function, and housing is a key part of that happening.

Several communities, facing critical shortages, have put on their hard hats and started building housing themselves from dedicated revenue sources, like a portion of sales taxes, fees on deed transfers and short-term rentals. Colorado is also setting aside a share of state income tax revenues for housing.

“Local governments getting involved in building housing has increased since the pandemic. The need is very great, to what some communities were calling crisis proportions,” said Rachel Tuyn, director of the Northwest Colorado Council of Governments.

The Aspen/Pitkin County Housing Authority recently completed 79 units in the third phase of its Burlingame Ranch project and up next is Lumberyard, which will provide 277 deed-restricted units on an 11.3-acre parcel near the Aspen Airport Business Center.

Avon is looking to annex 100 acres of state land to build 700 deed-restricted units and 60,000 square feet of commercial space. Winter Park Resort, with the support of the Town of Winter Park, is looking to build dorm-style housing with 330 beds. The Yampa Valley Housing Authority has a 10-year plan to build 1,100 housing units for those earning the median income in the Steamboat Springs area.

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