Affordable housing still elusive

Though recent economic indicators for Northern Colorado offer hope that more affordable single-family homes could be on the way, the region’s development community is not so optimistic.

In the last three years, the average valuation for single-family housing permits has been surging. Charts prepared by regional economist John Green show jumps in mid-1999 and early 1998, with a huge spike in late 1997.

But Green’s most recent projections indicate those surges won’t be happening in 2000 and a mix of cheaper housing may be in the works.

Larry Kendall of The Group doesn’t think so.

At the time of the 1997 spike, interest rates were going through the floor, Kendall said.

“People saw that and believed they could buy more house,” he said. “And they did.”

Another factor was that the luxury-home market had arrived in the area. Eagle Ranch Estates, located just west of the Windsor exit, sported homes close to or in the $1 million-price range.

Land and water are also factors. Land prices have always been high, especially around Fort Collins. As Weld County struggles with its agriculturally based economy, its land has been cheaper and more attractive.

Since November, however, water prices in Northern Colorado have gone through the roof.

“The water thing is a new element,´ said Bill Neal, owner of Fowler Better Homes and Gardens and Wheeler Commercial, who has plans for 2,500 new homes in Evans by 2010. “Water is three times more valuable than land. I’ve never seen anything like it.”

That can add as much as $15,000 to the price of a house.

Fort Collins housing permits have fallen off in the last year. In 1999, permits for single family homes went from 95 in January and 94 in February to 39 and 49 for the same months this year.

However, a look at the total number of permits issued in Larimer and Weld counties reveals that the drop occurs only in Fort Collins.

In the first two months of 1999, 795 permits with a value of $99.7 million were issued across the region. In the first two months of 2000, 828 permits with a value of $110.7 million were issued.

“Most of the slowdown is coming in Fort Collins, which causes Larimer County to slow,” Green said. “Weld is not slowing down. In fact, they are increasing.”

Why is the number of building permits for houses down in Fort Collins?

“Fort Collins has become less affordable,” Kendall said. “As we become less affordable, they will go outside of Fort Collins to do their building.”

Also, new developments have been slow to get started, and the city’s new land-use system has added a big unknown.

Neal, who is breaking ground for Rigden Farm, the first housing project to be developed under the new City Plan regulations, believes developers are loathe to take a chance on Fort Collins and the new guidelines.

“I think it’s the perception that this city has formidable bureaucrats, and there is a lot of misunderstanding of City Plan,´ said Neal.

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