The West End Rural Homes project will build 15, 2/3-bedroom homes with 2-car garages and off-street parking. These homes are meant to provide a safe and secure home in a great neighborhood for families who want to live in the West End. Located in Nucla on part of the old school playground, these homes could sell for between $150,000 to $195,000. This is not low-income housing, Section 8 housing, apartments, or rentals. Homes will be deed restricted so that they cannot be purchased as a second home or purchased as a rental. The goal is to provide an affordable, quality home to those who want live or work in the West End.

 

Building new homes and new neighborhoods is critical to recruit and retain teachers, sheriff deputies, town staff, medical clinic personnel, business owners and their employees, and others who live or work in the community. The Rural Homes Project is an effort to add homes to the building stock to improve economic outcomes in the West End.

 

  • A neighborhood of 15 homes helps address the housing needs that the West End is experiencing, where there is high demand for new, high-quality and affordable homes units.
  • The proposed density has a direct relationship to cost. It is most efficient to build as many as 15 homes at once. The fixed costs of construction are offset when more units are built.
  • The density of homes on the site will continue to be discussed at public meetings held during the town permitting process if the School District decides to donate the land.
  • The homes will be concentrated behind the school, rather than spread out across the entire property, for cost savings and efficiency. If the homes are concentrated in this area, the school district can retain the remaining land for other uses or for a future sale.
  • The lot sizes are about 5,500 square feet and the setbacks are much larger than Nucla’s building code requires.
  • We plan to assess the trade-offs between density and home sale prices in the next two months. If fewer units are built, they will be more expensive in order to offset increased costs.

The homes will be high-quality, energy efficient homes (not “tract,” mobile, or manufactured homes). We are working with Simple Homes, a Denver-based company that constructs panelized homes. This approach cuts costs and improves efficiency without compromising quality.

And an example of the finished product installed in a Denver suburb (much closer together than they would be in Nucla:

 

  • The West End School District could donate the land behind the Elementary School.
  • As many as 6 homes would be prioritized for school district employees to purchase
  •  The West End School District has an interest in hiring and retaining teachers
  • If the neighborhood attracts new families with children into the school district, the West End School District’s budget would increase. The state allocates $13,804 per student. If five new students were to move into the community as a result of the increase in building stock, the school would receive an additional $62,188 of funding each year.
  • The school district will benefit from increases in sales and property tax that new residents would bring to the community. Per year, a neighborhood of 15 homes on that site would result in:

  • The land is presently generating no benefit for the school or property tax revenue
  • A neighborhood development will increase the value of the remaining school-owned parcels and the value of the homes in the surrounding neighborhood
  • We will explore the possibility to add in a transaction fee that would go to the School District for each sale of the property.
  • Closure of the Tri-state plant resulted in a 43% loss of the local property tax base.
  • The School District’s enrollment numbers also decreased with the closure
  • New homes will generate new property tax revenues for the school district, volunteer fire department, town, and other critical services (see above). These are homes for local families, not for second-home owners or vacationers
  • New home construction is an opportunity to train local trades and set up apprenticeships to train the youth.
  • New construction is an opportunity to improve the street infrastructure around the development.
  • If this project does not happen, a trailer park or an unaffordable development could replace it on this property.
  • Growth is necessary for economic development
  • There is an increase in property tax revenue that would go to the Town, the School, the Water and Fire District, and the Cemetery.
  • Access to affordable and stable housing in well designed neighborhoods is associated with positive health, education and economic outcomes for families. If the local workforce can find housing, the entire community benefits.
  • There is a correlation between jobs and housing. If households spend less on housing, they spend more on goods and services in the local economy. In that way, the economy is more able to support retail, restaurant, and recreational amenities. More household spending in the community could lead to opportunities for more jobs and local businesses.
  • West End Economic Development Corporation (WEEDC) – community leadership, https://choosewestend.org/
  • West End School District – land
  • McStain Neighborhoods – homebuilder and developer, https://mcstain.com/
  • Stryker Company Inc. – general contractor, https://www.strykerco.net/
  • Simple Homes – framing sub & home designer, https://www.simplehomes.com/
  • Goff Engineering & Surveying, https://www.goffengineering.com/
  • Colorado Department of Local Affairs (DOLA) – funding, https://cdola.colorado.gov/
  • Colorado foundations - funding
  •  Rural Homes/Telluride Foundation – staffing, financing, and funding, DOLA, CHFA and homebuilder relationships, and homeowner mortgage assistance.
  • Electric heating and cooling systems have gotten much more efficient. We are studying the costs and benefits of several different electric technologies to ensure that we do not add undue costs to the project or the homeowner.
  • The homes would be insulated well above code standards, which will defray heating and cooling costs. For example, a ground source heat pump uses a 400 foot well underneath the home to access stable 50-degree temperature of the Earth as a base for cooling in the summer and heating in the winter. The heat-pump installer we have talked to can drill a well for $3,000. The winter utility bills in his projects are as little as $25/month. If used correctly, the system could be a significant cost savings to the homeowner.
  • There will not be electric charging stations in the garage, but the homes will be prewired so that the homeowner has the option to charge their electric vehicle if they purchase one in the future. The homes we could build will last a few generations. If in 2050, the homeowner wants to buy an electric car, the house would be ready to adapt. The voltage for electric vehicle charging is the same voltage that is needed for a drying machine. If the homeowner wanted to put another drying machine in the garage, it would be wired to do so!
  • Nucla’s powerplant was an important component to electrifying the state, an electric neighborhood would continue that strong legacy.
  • The goal of this development is to increase the inventory of homes by adding new homes.
  • It is often more costly on a cost-per-square-foot basis to renovate old homes than to build new.
  • Our approach is a direct response to the high costs of construction in rural Colorado.
    • The labor force is tied up with almost a two-year back log. There is an incentive to work on a bigger development, like the construction of an entire neighborhood.
    • Material costs are through the roof, with lumber prices about 3x what they were a year ago. Our process minimizes waste production, which now has a material value.
    • There are costs associated with designing individual changes in individual units.
  •  The homeowner will own the property as fee simple and, subject to the mortgage on the property, has full equity and is entitled to all appreciation, if any. 
  • Each home could appreciate in value up to a cap of 3% per year if the market appreciates
  •  A price appreciation cap limits the subsequent price of the home (to the next buyer) and provides for affordability over time. A designated target AMI will also serve as a limit to escalating prices.
  • The development will be handled by a Project Administrator. All applicants will be given a standard form to submit. Requests for supporting documents will depend on various factors including whether you receive a W-2 or are self-employed. All applicants will be required to submit financial information including tax returns for the previous two years.
  • Qualification eligibility will be provided following the final approval of the development. There will be:
    • Minimum employment requirements
    • Earned income minimum requirements
    • Minimum residency requirements
    • Property ownership limitations
    • Net asset limitations.
  • All applicants will need to qualify for a mortgage.
  • If there are more qualified applicants than available homes, the Project Administrator will hold a lottery to choose the purchasers. If a lottery is held, priorities may be established for certain categories such as for local employees, length of residency locally, duration of employment locally, number of children that are enrolled in the school district etc.
  • Income limits: applicants’ household incomes will need to be beneath a set limit, known as Area Median Income (AMI). There will be household income thresholds that will be approximately (60%, 80%, 100%, and 120% AMI). The number of homes allocated to each threshold will depend on project density and the development cost. AMI’s for Montrose county can be found at https://www.chfainfo.com/arh/asset/Documents/2021-Rent-and-income-limits.pdf
  • These salary ranges are approximately 29K-65K
  • We are presently assessing the viability of this parcel of land for this development.
    • Goff’s survey team evaluated the site on Friday, April 23rd
    • Phase 1 environmental report is underway to determine possible hazards and contaminants
    • What is the capacity of the infrastructure that would serve this parcel?
    • Ensuring fire safety, emergency access & egress
      April 27, 2021
    • Cost estimating to understand the trade-offs between cost and density
    • Additional funding sources are being sought for possible infrastructure improvements
  • A possible construction timeline:
    • Land development – 3 months
    • Simple Homes framing – 1 month
    • Finishes & landscape – 5 months
  • There would be only a 3-month lag between construction in the West End and construction in Norwood.
  • A Housing Needs Assessment was conducted in 2019 by an Independent Housing Consultant who concluded that the west end would benefit from the construction of 20 new homes over the next five years.
  • These homes are for-sale rather than for-rent because we do not have a means to lock-up long term capital to finance rental properties.
  • Monthly mortgage payments on these homes could be less than the market rate for rentals properties.

We are exploring options for building a similar development in Naturita.

  • The Telluride Foundation and its partners are not making money on this project, they are contributing money towards it.
  • The Housing Committee is not making money, they are volunteering their time towards it.
  • The School District would benefit by having homes available to recruit and retain teachers. The School Districts’ revenue will increase from property taxes and its annual budget will increase if new students move into the community.
  • The town benefits from increased property taxes.
  • 15 families will benefit from having new homes to live in

We will follow all applicable state and federal laws