Read McCulloch | Photograph by Adam Williams
Overview: Read McCulloch is executive director of the Chaffee Housing Trust. He talks with Adam Williams about housing affordability, how we got to this state of housing affordability crisis and deed-restricted housing vs. the community land trust model.
Read also addresses: Are the local building processes and policies we have in place what we need them to be? How do short-term rentals factor into the equation? What’s the impact of a moratorium on construction? Among other things.
SHOW NOTES, LINKS, CREDITS & TRANSCRIPT
The We Are Chaffee: Looking Upstream podcast is a collaboration with Chaffee County Public Health and the Chaffee Housing Authority, and is supported by the Colorado Public Health & Environment: Office of Health Equity.
Along with being distributed on podcast listening platforms (e.g. Spotify, Apple), Looking Upstream is broadcast weekly at 2 p.m. on Tuesdays, on KHEN 106.9 FM community radio in Salida, Colo.
Chaffee Housing Trust
Website: chaffeehousing.org
Instagram: instagram.com/chaffeehousing
Facebook: facebook.com/chaffeehousing
We Are Chaffee’s Looking Upstream
Website: wearechaffeepod.com
Instagram: instagram.com/wearechaffeepod
CREDITS
Looking Upstream Host, Producer, Photographer & Website Manager: Adam Williams
Looking Upstream Engineer & Producer: Jon Pray
We Are Chaffee Community Advocacy Coordinator: Lisa Martin
Director of Chaffee County Public Health and Environment: Andrea Carlstrom
TRANSCRIPT
Note: Transcripts are produced using a transcription service. Although it is largely accurate, minor errors inevitably exist.
[Intro music, guitar instrumental]
Adam Williams (00:00:14): Welcome to We Are Chaffee’s Looking Upstream, a conversational podcast of community, humanness, and well-being rooted in Chaffee County, Colorado. I’m Adam Williams.
(00:00:24): Today, I’m talking with Read McCulloch. Read is executive director of the Chaffee Housing Trust. Naturally we talk about that, the trust, and the community land trust model at the heart of it.
We also talk about many other things housing, like how did we get here to this point of crisis with housing affordability? What are some of the problems, and what are some of the obstacles to resolving those problems? What is at stake if we don’t all work together towards solutions-oriented efforts, as daunting as they might seem to implement?
And I’ve got more questions. Are the building processes and policies we have in place what we need them to be? How do short-term rentals factor into the equation? How is the community land trust model different from deed-restricted housing? What’s the impact of a moratorium on construction, and so on?
(00:01:13): It’s complicated, of course, and questions are easier to come by than clear answers, even for subject matter experts like Read, which, to me, is comforting, in a way, at least in terms of this. It means that my lack of understanding, or yours, if that applies, does not keep me, or us, from being part of the conversation, which probably often is a barrier for any of us to jump into the fray of complex topics, isn’t it?
If we feel like we don’t know the ins and outs and that our questions might be too basic, it can be like when we were kids in the classroom, and we’re afraid to raise our hands and speak up or get involved because, what if we look foolish? And the lack of clear answers, in general, for solving the housing affordability crisis also highlights that we actually need to get involved. Because if we are going to solve these critical challenges to our community and as a larger society, we need to be part of the discussion and the ideas.
(00:02:08): At the least, that’s all of us. I don’t think we can just leave it to a few others, like Read, to do all the lifting and pull us up out of this situation. We’ve got to get involved. So I wade into the deep with Read, and I ask him questions about housing affordability and all the things, even if I might occasionally seem silly for raising my hand. That’s in hopes of sparking some kind of broader awareness and question-asking and community conversation.
The Looking Upstream podcast is supported by Chaffee County Public Health and the Chaffee Housing Authority. As with every Looking Upstream episode, show notes with photos, links, and a transcript of the conversation are published at wearechaffeepod.com.
All right, now here is Read McCulloch.
[Transition music, guitar instrumental]
Adam Williams (00:03:07): We have a lot to get to today, Read, and there’s a lot that I’m curious about, a lot I want to learn from you about housing, about housing affordability, and with your leadership role with the Chaffee Housing Trust. But before we get there, what I’d like to do is find out a little bit about you and your background, and what brought you to this place, into this role that you have.
My understanding is that you have around 30 years, give or take, of non-profit experience overall. And I am curious about why you made that decision as a young man that I want to be in the business of service, of, I would say, compassionate career service for the greater good. What drew you to that?
Read McCulloch (00:03:49): I was going to school back in the ’80s, and there was seemingly a fascination with corporate world, corporate jobs, and none of that appealed to me. And I really saw so many problems that needed to be addressed, not profit that needed to be made. And when I looked at ways to get involved institutionally and addressing problems, the non-profit sector became the obvious choice. So, yeah, I think I’ve always been driven to finding those solutions for people as opposed to being profit-driven, or even profit-driven for people.
Adam Williams (00:04:25): Was there something in your earlier years? Did your family, or did others, friends, something around you socially, in your environment, lead you to recognize that there were problems out there, there were people who needed what you could offer if you were going to be a compassionate, intelligent leader in these ways? Do you remember that being an influence for you?
Read McCulloch (00:04:47): I’m trying to think of the trigger event. I mean, I grew up in a suburban neighborhood, very comfortable, fairly white, and affluent. And you step outside of that for a split second, and you realize there’s so much that you’re not being told about and that is not being addressed. And so the more I got exposed to other stuff going on, it was an easy choice for me.
Adam Williams (00:05:07): You started off with many years in the outdoor leadership realm with National Outdoor Leadership School, and then later co-founding CityWILD and directing that, which was for low-income students in a portion of Denver. I’m curious what led you from outdoor leadership programs for those many years to ultimately decide, “You know what? I’m needed in housing affordability. This is something I need to go take a step into and create the Chaffee Housing Trust.”
Read McCulloch (00:05:36): Yeah. I was pretty deep into the outdoor field, to the point of starting our organization, in part because, and working for the National Outdoor Leadership School, certain clientele that tends to be very wealthy, culturally pretty white, and realizing, “Wow, this leadership opportunity is fantastic and it’s only being offered to a select crowd. How do we diversify that?” So that’s how CityWILD came into being.
(00:06:00): As that came to an end for me, and I was passing the torch to somebody else, I literally bumped into the landlord in our office, this gentleman named Aaron Miripol, who runs the Urban Land Conservancy, and he has a CLT background, community land trust background. And I just started reading about community land trusts, and I mentioned it to him, and he said, “Oh, we should chat sometime.” Since then, he’s become a close friend and a mentor, because that door was open for me, and again, serendipitously. But something I was very curious about, because I was moving back up here.
(00:06:31): And this was 2007, and it was really clear at the time what was going to be happening here. Homes are unaffordable for a lot of workers, and there were people organizing in the community, particularly employers, to say, “Hey, we got to address this issue.” And that’s when I found out of this effort going on here and just volunteered into that. And then I had the nonprofit experience, startup experience, so that just led to me jumping in and taking the reins.
Adam Williams (00:06:58): You say move back up here.
Read McCulloch (00:06:59): I’d been working in Denver for about eight years with that youth development program, CityWILD, and so I was commuting down every Monday and coming back Friday. And I felt like I wasn’t living here, although that was my intention, and I’d started out living here as I started to build a home and move into the community. And so that took me away for a number of years, and I was able to… I got married, and I wasn’t living with my wife. My life socially was up here, and my professional life was down there.
Adam Williams (00:07:27): 2008 is when you create the Chaffee Housing Trust, and 2008 is also when we have a significant recession nationally. We have the subprime mortgage crisis. There’s a lot going on. I’m curious what you saw here as the housing issues that needed to be addressed and that you were going to participate in trying to help resolve at that time. Also, being aware that, just in general, the prices of buying a home in 2008 would’ve been more reachable than they are now in 2024.
Read McCulloch (00:08:00): Absolutely. At that point in time, I was looking backwards. What were the trends? And you can see Salida, Chaffee County, in general, housing prices going up pretty dramatically. BV was pretty sleepy at the time, and so that writing on the wall was driving me towards, “Hey, this community land trust idea is a way to help locals build wealth through homeownership.”
(00:08:20): When the stuff hit the fan, it was like the wrong time to start a housing organization. It was pretty funny. We got to the point of having a project fully permitted and ready to go, financed, and then the bank was like, “Nope,” and pulled the funding out, and the whole thing collapsed. So we gave a good go all the way through 2009, 2010, and then, yeah, the situation was just such that there was no way to move forward. So we had to go dormant, and that took a minute to come back, and by 2015, it was in full-blown crisis.
Adam Williams (00:08:50): When you went dormant, how long are we saying that?
Read McCulloch (00:08:52): It was basically three years, four years.
Adam Williams (00:08:55): Are we talking about the time then that you would’ve taken some time to travel in Central and South America? You also would’ve been in the Peace Corps?
Read McCulloch (00:09:04): Exactly.
Adam Williams (00:09:05): So it’s when you came back from that that you picked up the reins and were able to really carry that forward as intended?
Read McCulloch (00:09:12): Yeah. In 2011, we lost the funding for the organization for administration, which was basically paying me at the time. So the organization had to go dormant for lack of financial support, and that gave me an opportunity to go do something educational and interesting. When I got back here, my buddies were like, “You got to get to work. There’s a problem here.” And, yeah, I was a little bit reluctant at first because that was pretty hard to first go, and then just had to jump back in and do it.
Adam Williams (00:09:40): Were you aware of the changes? Were you able to come back and look at them and say, “Wow, in 2007, 2008, this is what I was seeing, and by 2015, it’s just a different animal that had grown”?
Read McCulloch (00:09:52): Absolutely.
Adam Williams (00:09:53): Okay.
Read McCulloch (00:09:53): And the trends were pretty indicative. Those friends are builders or work in the industry, and their business is suddenly shot through the roof. A realtor friend, who’s just like, “Oh my gosh, look at this. Look at the trends. This is going to be a problem.”
Adam Williams (00:10:08): Okay. I want to come back to the community land trust model. I want to get into more of that. I want to learn about it and talk about more of the potential solutions for all of this.
But before we do that, I’d like to get a good sense of what the problems are. I’d like to start with that fundamental understanding because I feel like, in my mind, you’re either somebody who is really, really struggling with this, and the words housing affordability crisis, you know it very well. You know it intensely. It’s part of your daily life and your daily stress. Or maybe you’re somebody who is financially secure and you’re stable. Maybe you even have a second home because that’s just not an issue to you. You’re not at risk of housing insecurity or any of that.
Do we have a disconnect? Maybe it’s generationally. Maybe it’s socioeconomically. But where do we maybe have gaps of understanding of what the issue of housing affordability crisis even means?
Read McCulloch (00:11:01): I mean, let’s just talk about what’s driving the current trends. People have the means to move here from elsewhere, and COVID really accelerated this, to buy what’s available on the market and pay cash. I mean, cash offers were outpacing.
People were trying to finance their sales or their purchases by far, and then cash offers, plus, to go beyond asking price. So folks with that kind of means, with that kind of comfort, they’re not necessarily aware of what it really takes in a rural community to be able to afford what’s available. And so once that market accelerated, all those people were left out.
(00:11:42): And the jobs here, what are they? They’re based on… We’re a tourism-based economy. The municipalities or jurisdictions rely on sales tax. I mean, that is the focus of what drives things here. So what are the wages that those folks are earning compared to what they can afford? And so you get that phenomenon of people…
They’re renting. They can’t afford to own, so they have to move further away. Well, where is that? Here, what do you do? You move to Leadville. Well, the problem’s pretty similar there. You move to Sawatch, or down to… There’s nowhere to move to. And so the understanding of what it meant for the individual worker here, I think, has escaped most people’s perception of coming to this lovely place and seeing how great it is and, “Oh, yeah, it’d be wonderful to live here,” unless your wages are such that you can’t afford it.
Adam Williams (00:12:29): I feel like a lot of times when… Let’s say, in the media, in this example, but probably in general, when we get used to certain words, certain phrasing, so, in this case, housing affordability crisis, if it doesn’t affect you, then you can maybe numb out to it. Maybe what it actually means and what it actually looks and feels like to somebody who’s going through the issue, maybe it gets lost on those who are housing secure and able to do what you’re saying. I can’t imagine paying cash for a house.
Read McCulloch (00:12:56): Right.
Adam Williams (00:12:57): I think most of us can’t. I am, I would say, of an in-between generation, I feel like, where my wife and I, we’re able to barely get into Chaffee County. We’ve been able to, only through special programs or the fact that I’m a veteran and had VA benefits to help support getting a loan for a house somewhere along the way, were we able ever to get into the housing market.
And we even lost on our first two houses. We would not have had, as highly educated professionals, would not have had the means to save to get 20% down, for example, in getting into the housing market. And I would say we are of the more advantaged and fortunate people in terms of socioeconomics.
(00:13:42): So, I guess I wonder if the people who have become, whether they’re financially immune or just numb to hearing in the media on a daily basis, “Oh, there’s a housing affordability crisis,” I don’t know how to crack through and open the dialogue maybe with a broader perspective for some of the population that we need to be aware of this, and how we can work together to work towards solutions.
Read McCulloch (00:14:04): Well, you hit on a really good first point, and that is having 20% down. But for most people who are renters, living paycheck to paycheck, that’s just out of the question. Very few people even get five or $10,000 squirreled away and ready, hoping to get into homeownership. So huge barrier right off the bat. You can get private mortgage insurance to cover that 20%, but that’s at a higher rate, and it costs you more money, makes it harder. It ultimately comes down to your monthly nut.
What do you have to put towards housing? So rent here were six, seven, 800. They’ve accelerated up into the teens, getting close to 2,000 for two-bedroom home. So people are getting priced out based on that market demand and the lack of stock available. So folks are coming in. They don’t know any of that, and they don’t see that barrier.
(00:14:55): The next thing is just that monthly mortgage that people would have to pay if they were going to get a homeownership. Now, interest rates have blown up. And then, you add to all that someone’s got leftover debt, they struggled through COVID to stay employed, and they have credit card debt. All these barriers exist.
I think what most people don’t realize is that, for all the folks you see in the restaurant and the tire shop, wherever, if they don’t already own a home, then they’re struggling with those back issues that prevent them from even getting to a mortgage without the 20%.
(00:15:27): And you add that layer on top of the lack of education. My parents taught me about interest rates and compounding interest on a credit card, made sure I had that lesson. If you don’t understand those things because someone didn’t teach you, then how do you navigate that? How do you get to the point of becoming a homeowner? There aren’t services, except for what we’re providing, available to people to get to that point. So all these barriers, cumulatively, that prevents getting to that ownership piece.
Adam Williams (00:15:55): I think we take some of those educational pieces for granted if we have learned some of those things about pay off your credit card, or this is how it works to get a mortgage and to prepare and have the savings. If you don’t know what any of the steps are to be financially stable and sound, and saving and ready for the moment when you can enter the housing market, I think those of us who do know those things, who have had the opportunities to learn them, are maybe in a privileged position and we take for granted that others need support and help in how to figure it out.
Read McCulloch (00:16:29): I mean, you hit the word in the head, privileged position. I think so many of us, white, straight, male guys, speak English, went to college. There’s so many things stacked up there in my favor that I don’t even take into account. Those of us who are in those positions, do we really think when we’re talking to an individual, we think, “Oh, they’re not working hard enough,” or whatever barrier we perceive? But we don’t perceive the dozens of barriers behind that that we know nothing about. And that privilege, I think, is really a lens that we all need to take into account here.
(00:16:58): The place we live, just by being here and being able to stay here night after night, that’s an amazing privilege. Those things don’t get extended to everybody, and we need to figure out a way to make sure that we equitably make it available so that the entire place works, not just for the visitors, not just for the established residents, but for the transient folks who are working a season, for the folks who are going to be here for a couple of years. We got to make the whole economy, the whole deal work, and housing is a huge piece of that.
Adam Williams (00:17:27): I mentioned being in what I feel like is the in-between generation. If we have, say, the boomer generation that… Well, just based on stories that I’ve heard from talking with people or those even in my family, they could go buy a house for $25,000 and come out of it very house-rich in a way that I know that I personally haven’t experienced because I couldn’t buy a $25,000 house. I lived in much more affordable Midwestern location, and I’m starting off with a couple of hundred thousand, a few hundred thousand.
Now we’re into several hundred thousand, and that’s just to get in the door and have a home. It’s no longer considered a luxury to have something that’s a half million dollars. And if we go back to the 20%, just doing some basic math here, we’re talking about $100,000 people have to be able to squirrel away for this dream. And you mentioned five or 10 grand. You’d be lucky to be able to save that based on wages. And, oh by the way, that might go away if you have a car breakdown or you have an illness that you weren’t expecting.
(00:18:21): I feel like that, as somebody who’s in between, I’m looking at those in our family who are of the boomer generation, and they got to have that prosperity, and they might be thinking, “Well, why can’t you just do the same?”
And I’m looking at the younger people, younger than me, people in their 20s and 30s who are struggling. They’re working multiple jobs. They’re working 60, 70 hours a week on wage jobs in various restaurants, and they still aren’t able to hardly make ends meet unless they have three, four, five roommates.
And then there’s my kids below that. They’re Gen Z. And I’m thinking I have no idea how to set them up for their future, other than to say, “In my generation, it wasn’t cool to live at home until you were 40, but you’re welcome to do that in my house,” because that’s the best I can offer is time and space for them to go about their lives, and I don’t know what else to offer them.
Read McCulloch (00:19:11): That was one of the drivers, is that folks who were here realized their kids could not live here unless they moved into the parents’ house. But then, for them to move out of the house, get a job here, start a life here, just impossible. And well-established folks, their kids came, tried, and left. And that’s what I heard from them, saying, “What’s the deal here? This is not working for us.” We’re going to lose all of the locals because they’re going to be driven out until their parents die or the house is available. So, yeah, that’s a huge issue.
(00:19:42): The thing about, yeah, when you’re in your 20s, you have a bunch of roommates. You’re just trying to get by, and you figure it out. Add to that the rental insecurity of, as soon as that lease is up, it’s a good chance someone might be selling that place to make a huge profit, or they’re going to buff it out and raise the rents, whatever they’re going to do.
The insecurity that our clients talk about as renters, and that mental health impact on them when they move into ownership, and they talk about that change, that shift to, “Oh, this is my home. No one’s kicking me out. If my kid has a tantrum and screams, no one’s kicking me out. I can paint the walls. I can do whatever I want to do or not,” take that off the table in terms of mental health, and they’re much more comfortable, happier people, able to spend time as a family, better employees, better members of the community. They have time to volunteer. All those things start happening when you take that insecurity out.
(00:20:36): And so, yeah, the former generations, there was an abundance of affordable rentals. There aren’t anymore, and there’s not jobs to match that. We’re not going to raise wages enough to meet the rents. What we have to do is find a way to lower those rents so that those people can afford it at their current employment.
Adam Williams (00:20:53): I don’t know if you’re familiar with Professor Scott Galloway–
Read McCulloch (00:20:56): I’m not.
Adam Williams (00:20:56): … from NYU. He has said that today’s 30-year-olds, they are the first generation of 30-year-olds to not be more financially secure than their parents’ generation when they were 30 years old. This feeds into everything that we’re talking about and the difficulties.
I guess what I’m trying to do… I keep trying to find an angle in here, not with you necessarily, but in my own mind and with the conversation, to make it clear, there is a very different experience going on for everyone of that generation, let’s say is the millennials and younger, compared to those who are in their 60s, 70s, 80s.
So any of the attitude that is, “I pulled myself up, why can’t you? I was able to work and afford this, why can’t you?” I’m wanting to open up dialogue up and down the spectrum of the generations and the experiences, and figure out how can we help each other in making this more equitable, but also sustainable.
(00:21:55): Because, I guess, one of my questions I was going to get to eventually here, and might as well do it now, is I’m curious for your take on the future. And if we don’t resolve some of these underlying issues related to affordability for housing, what does the future hold? Not necessarily just in Chaffee County, but in general, because, of course, this housing affordability issue is not just here. It’s widespread.
What is our future when we keep making it more and more difficult for those who are younger and do not have the income to save for housing? Where are they supposed to go? And especially when we now have it as the Supreme Court criminalizing homelessness, like it’s a crime to be poor, but we are creating an economic system that makes sure you’re poor.
Read McCulloch (00:22:41): Look at that young person and all the factors that’s differentiating them from those previous generations. You can start with the cost of education. Folks had the GI Bill, and after that, university was affordable. My first semester, I think it was $328 for the tuition. When I left, it was like 750, and I think it’s somewhere in the thousands now. So the cost of education is so high.
People aren’t able to get it. They can’t afford it. They’re in debt. Student loan debt is currently one of our biggest impediments for people getting through the process. It used to be medical debt until Obamacare came along. That was the huge one [inaudible 00:23:15] because if you have outstanding debt, the bank’s not going to lend to you because they’re competing for those monthly payments. So go down the list of all these extra costs that… Health insurance currently. All these extra costs that this generation has relative to their income that previous generations didn’t.
(00:23:34): So it’s really unfair for folks to say, “Well, I pulled myself up.” Yeah. And you had either market-driven or subsidized opportunities that made it that way. It can be done, but we’re choosing not to do it right now. So when we talk about housing and, like, “Oh, well, why should I subsidize? Why should a wealthy home buyer pay extra so that they subsidize a lower-income household’s home? That seems unfair.” That’s the only way we’re going to resolve the situation.
And to your question, “Then, who pays for this? Whose responsibility is it?” Well, it’s all of ours. So how can we incrementally find ways to support young people getting over all those barriers? Lower tuition costs, loan forgiveness, available healthcare programs, et cetera, et cetera, all the way to housing, lower the cost of housing through subsidy or whatnot. There’s some payoffs. They have to agree to some restrictions, but that gets us a step closer. Incrementally, all these things, maybe we can get there.
Adam Williams (00:24:38): I want to talk the about Chaffee Housing Authority survey that was done a couple of years ago, or at least updated a couple of years ago.
Read McCulloch (00:24:44): ’22 is an update from 2016.
Adam Williams (00:24:46): Okay. That determined that around 1,100 houses are needed. Or another way of saying it maybe is that we’re around 1,100 houses short. But I’m a little bit unclear, and I hope that you can clarify for me something about, who are we talking about? Who are these houses needed for? Are these people already living here in the county, and they are simply bouncing around with unstable housing?
Are they people that we are needing as workers in order to fill openings that are vacant in jobs in the restaurants and in all the places that we need to make our community function in a smooth and prosperous way? Who are we talking about, and what do we do with 1,100 houses of a shortage?
Read McCulloch (00:25:35): So, first thing, the Great Recession caused a halt of development in construction here. A lot of friends who had trades jobs, there was no building going on, and so they had to leave and go work elsewhere. A lot of them came back because it boomed again, but things stopped, especially multifamily housing. So no new apartment buildings built, no scaled opportunities, but the demand started growing, and we haven’t been able to catch up to that. So we started out with a deficit because construction stopped for a while there.
(00:26:10): So there’s an unmet need already that is… I think they’re calling it 435 homes needed to house those filling unfilled jobs, and et cetera. So we had a deficit because of that. And then, they did the projections of what’s the growth in the future demographically, who’s coming in, what kind of new jobs are going to be needed, or growth in jobs for existing businesses, and then housing those people as well.
And so, that’s how they got to that number of 1,100, is the deficit plus the future expectation. If we don’t house those people, businesses can’t grow. If businesses can’t grow, et cetera.
Adam Williams (00:26:48): I feel like for a visitor who comes through Buena Vista or Salida, they probably would feel like, “There’s a lot of building going on. There are a lot of houses. This is a lot of action. There must be a lot of money. Wow, this place is really thriving and going nuts. Maybe we should get in, get one of these houses.”
Read McCulloch (00:27:06): The fever.
Adam Williams (00:27:07): But those houses are not for what we are talking about when it comes to affordable housing, are they, generally speaking?
Read McCulloch (00:27:16): If you’re a builder and you’re looking at options, you build a higher-end home and you get your 20% developer fee on 1.5 million or whatever it is, or you build affordable homes and you have to operate at very small margins because that’s what is affordable, what choice do you make? So you’re going to go for what’s most lucrative for you.
And I think most local builders, I think that’s the obvious, rationally economic decision to make. So what do we do? There’s this need then that’s not being met. Well, what do we do about that? That’s the question we’re trying to answer right now, and institutionally and financially, how do we fix that?
Adam Williams (00:27:56): I’m wondering how we get there and how much can we handle people who are going for the one-point-whatever million-dollar homes that are in new developments. There’s a domino effect. I don’t know what all of that looks like, but there’s a domino effect when we keep adding in. I don’t know if these are second home buyers, if these are more of the cash buyers you’re talking about. How does it factor into the overall community growth and the fact that there still is the unmet, unresolved strain for the workers that we need to be here to sustain the livelihood and flow of a community?
(00:28:32): What happens when all the workers say, “I’m moving elsewhere because I can’t afford it here,” and now restaurants closed down, and now other businesses are closing down, and now we have a bunch of houses that were expensive? Does this end up being something, the bottom falls out of, and now the market for everybody else? Or actually, is that a way of correcting it? Let things go bust, so then there ends up being this huge availability of market because everybody who came in when they felt the fever, they bail.
Read McCulloch (00:29:04): I mean, that’s, I guess, dominant economic analysis of, yeah, let the market take care of it. And if that requires a crisis, then so be it. I don’t know. Will that truly happen? I mean, if you have the chance to move here and buy one of these expensive homes now or in the future, and the services are inadequate, well, maybe that’s part of moving to a mountain town. Is that going to stop you from buying that house? Is that house price ever going to come down to affordable for a low-wage worker? No. There’s no way that million, 1.5 [inaudible 00:29:38] is going to come down under $500,000, right? And so that’s not going to fix it.
(00:29:46): I think we have to then say, “Well, what does the housing need? What type of housing? How much does that cost, and what can they afford? And what’s the gap between those two things?” And if we can identify a way to build that housing at that price point and sell or rent it to those folks, then they will stay. I mean, my concern is, why would we wait until it got that bad when we know what the answers are? We need affordably priced housing that is either rental or homeownership.
Adam Williams (00:30:17): I feel like I am trying somewhat to bumble my way through what is such a complex and big topic.
Read McCulloch (00:30:23): You and me both.
Adam Williams (00:30:26): Are these separate markets, in a way? Are these separate issues? For all of the development that’s going on, that maybe it takes 800,000 to get in a base model of some development, or it is 1.5 million, is that completely separate? And not necessarily a detriment to the idea of building affordable.
It just means the effort has to continue for building affordable housing and finding the right land and the right processes for making that happen. Are these completely… Or can they be completely separate ideas, where the idea of what’s being developed right now that’s out of reach for workers? Is that okay? Is it okay that that stuff’s being developed because it’s not really a problem, it’s just not the solution?
Read McCulloch (00:31:11): Some people argue that, again, let the market resolve the problem. More houses need to be built. Remove all the impediments from building more houses. Once you have high enough volume, naturally, the prices will come back down. Question is, will they come back down low enough to serve that population that can’t afford it? And I would argue no. And so, if we need to then build the housing that’s affordable, it’s a matter of closing the gap between the cost to build, which is, these days, what, $400 a square foot or something crazy, and what folks can afford.
(00:31:44): And the question is, where does that subsidy come from to fill that gap? And we can drive it down with manufacturing methods, with materials, with land costs. Well, you can’t with land costs because they are through the roof. There’s all these factors. I mean, the cost of building is so high right now. There’s all these factors that we can’t control. And so, ultimately, it comes down to the idea of how do you subsidize that price to fix what the market is unable to fix? And if you’re going to do that, where does that money come from? That’s the big question on the table right now.
Adam Williams (00:32:14): When you mentioned impediments to building, and you’re talking about the cost of land and being through the roof and all that sort of stuff, are there other impediments that we do have better control over? What would help building go more smoothly, be able to be done faster and cheaper? Are there solutions, in your mind, of what we ought to be doing maybe whether that’s government policy or… I don’t know. I don’t know.
Read McCulloch (00:32:41): There’s a lot of loud voices right now about the time it takes to get through the process with the local jurisdiction, be it the town of BV or the county or city of Salida, and whatnot, and whether or not that is… If we can fix that, then the market will take care of it because we can accelerate it.
Well, that’s part of it, yes, the time to build. So you get into building, and you’ve invested a bunch of money, or you borrow a bunch of money, and you’re paying interest on that. That’s an added cost. And then they come back at you and say, “Oh, you have to change XYZ.” That’s slowing you down. That’s costing you more money. That’s part of the problem. Yes.
(00:33:13): Is it the only problem? No. Interest rates right now are a huge part of it. The process for us to find subsidy and bring it to the table. I mean, there’s some projects where it took us one or two years to get the funding and financing to actually get to construction or acquisition. So there’s a lot of systemic things that maybe we could change, but those alone aren’t going to solve the problem.
All these increments together, as I was saying before, those could help bring it down, and then we have to look at what’s the gap and how do we fix that. So, yes, there are some institutional issues, and financing is part of that definitely.
Adam Williams (00:33:52): What can someone listening right now, or what can the average citizen or average voter or just community member here, what can we do to help with these issues that you’re talking about? As opposed to somebody like you, who’s in a seat of leadership for an organization, you have a process. Again, I swear we’re going to get to the community land trust model.
But you’re in a particular position of expertise and process and organization that the rest of us are not, right? Hardly anyone else is. I’m not. What is it that I can know and understand and do to help ease the processes and get this to go in a positive direction more quickly?
Read McCulloch (00:34:35): I mean, I think the immediate thing that people can do is to advocate for their local jurisdiction to really analyze the process and ask themselves what impediments are they putting up and what impediments can they take down, and why. Because there’s a strong debate of like, “Well, we’ve only got so much water in BV, and so we’re going to hold that tight and dole it out in a piecemeal fashion.” Well, okay, maybe we need more water. How do we find more water? What are the restrictions on that? Or how can we encourage less water consumption?
(00:35:08): So looking at each one of those pieces, when you see something happening at the government level, you can get involved, and you can listen to the debate. You can read the packets. I mean, it’s that public participation in minutia. It’s really hard thing to ask of people to do, right? I mean, you’re just diving into housing for this interview and whatnot, and you’re realizing, “Oh, there’s so much to it.” It’s really hard to advocate for something that easy.
Adam Williams (00:35:35): My head is swimming with all of it, as I try to get intelligent questions out to you and try to wrap my head around some of these things. Yeah.
Read McCulloch (00:35:45): So, on a larger level, I mean, the USDA is an agency that we rely on for mortgage financing, and the Colorado USDA is in a shambles. They cannot get anything passed through their bureaucracy, unfortunately, because they’re totally underfunded. They can’t hire enough people to do what they’re supposed to be doing, and it slows everybody else down, at least folks like us who rely on their programs and the staff there.
(00:36:12): So when it comes up to Congress, the USDA gets reapproved [inaudible 00:36:18], pushing Brittany Pettersen, or whoever it is, Hickenlooper and Bennet, to say, “Hey, you’ve got to fund these programs more because we, as a rural community, rely on that program.” Those are really hard things to ask of people, right? Write a letter. I mean, some people do it. Most people don’t. I’m personally stuck as well. I plan on meeting with all these offices and their representatives and trying to say, “Hey, we got some broken things out here.” Trying to support those programs and those changes.
Adam Williams (00:36:50): I think if there is cynicism about how well my letter would be received, or if it would matter, if somebody felt that way, I think that would be reasonable to think, “Okay, I can write a letter, but is that going to solve the housing affordability issues in my county?”
Read McCulloch (00:37:05): Yeah.
Adam Williams (00:37:07): I guess what I want us to keep in mind as we have the conversation today, but also throughout the community, is, what can we do? What are we supposed to do with the information we’re hearing from you right now?
Read McCulloch (00:37:19): And I’m not doing any favors by giving you really good answers because they’re elusive and they’re rabbit holes, and they’re complicated.
So let’s talk about some immediate things that are happening right now in Chaffee County. We’ve got the Chaffee Housing Authority, which has been a long battle to get that agency established. Necessary in every county to have a governmental or quasi-governmental agency focused on housing. So we got that stood up, and it exists. For them to proceed, they have to pass some ballot initiatives or issues this fall.
(00:37:54): Number one, they have to de-Bruce. So that means that TABOR is preventing them from taking grant funds that they’ve already received and deploying them in construction because they’ve exceeded limits. TABOR stuff’s super complicated. I won’t even try to dive into that. Long story short, they just need approval from the voters to say, “Yes, you can keep that money to do what you’re supposed to be doing for the projects that you’ve started and for your organization.” If they have to give that money back, it doesn’t go back to the taxpayers. It just goes back into the government coffers. It’s not going to get distributed via your TABOR payments.
Adam Williams (00:38:31): Okay.
Read McCulloch (00:38:31): So that ballot initiative, the de-Brucing, is a no cost to the voter, no new taxes, nothing, easy slam dunk. Yes, yes, yes, that needs to happen. Just allow the ad agency to flourish on the trajectory that it’s been set up for it to do. The second thing is, if we want to actually address the problem to the scale that it’s happening at, we have to start building homes across the county, various AMIs, serving multiple lower-end households who are already here in the county, and that’s the funding measure.
And that is a really critical measure because they can take those dollars, and they can leverage them to get loans. They can leverage them to get into partnerships. They can leverage those dollars, multiply the power of those dollars to get housing built by whatever means we’re talking about.
(00:39:25): But without that leverage, they don’t have anything to bring to the table to a developer to incentivize them to do something. That money coming in is guaranteed every year, three to $3.5 million initially, and then every year thereafter. If you know that money’s coming in, you can go to the bank and say, “Hey, I got this guaranteed payment.”
This is going to help us leverage the bank then to finance those developments and get the housing built. So, directly, every person who is registered in Chaffee County can vote yes on that ballot initiative, and that will be an incredible acceleration of getting to the solution. And it’s going to take us several years to catch up. It’s going to take us several years. Development does not happen fast. I mean, we’ve got projects that we are just finishing now. We started those in 2018, ’19.
Adam Williams (00:40:17): Wow. Wow.
Read McCulloch (00:40:18): And that was during COVID and all that stuff.
Adam Williams (00:40:21): Sure. Okay.
Read McCulloch (00:40:22): But the point being, it takes a long time. Market-rate developer maybe can get in and get out pretty quickly, and the price reflects that. To do affordable housing, you have to very carefully go along the way and do everything you can to save costs to get to your ultimate product that you have to sell or rent.
Adam Williams (00:40:41): And create incentives for the developer. Based on what you said before, if I can sell it at 1.5 million, and that’s economically going to be much more profitable for me as a developer, I’m going to make that development. We need incentives to create affordable housing, in general, whether that’s apartment buildings, whether it’s houses that the typical worker or family needs, a 400 or $500,000 house.
(00:41:04): Another word that I’ve heard used that I’m really unclear about is moratorium. My understanding is that we have a housing moratorium on construction. I don’t know what that means, because again, if I go back to… If you’re a visitor coming through town and you’re seeing people building all up and down the valley, what does it mean that we have a moratorium? What is the impact of it?
Read McCulloch (00:41:23): To the extent I understand what’s going on there, moratoriums have been put on new permit applications being accepted and processed, or being pushed through the process. So what it does is it stops development, which is going to slow down the production of housing, which, back to the market thing of creating more units, helps reduce the problem, right? So it’s not a good thing in that strict sense.
The reason for the moratoriums, and there are multiple and they’re different, but I think water was one issue. They needed to do an analysis of what available water they have to offer to development. And that’s a really not simple thing. You can’t give someone a building permit but not provide water for them. So that was the reasoning behind that.
(00:42:11): Understaffed development departments in the municipality, let’s say. They don’t have enough staff to process the applications. They can’t get through the process and do the due diligence that they need to make sure that development’s going to be good, safe, all those things done right. That comes down to, well, you have to fund local government to do that process. “Where does that come from?” “Well, it comes from sales tax.” “Oh, so we need to bring more people in here. Okay.” It just becomes a spiraling–
Adam Williams (00:42:37): Wow. Yeah.
Read McCulloch (00:42:38): … thing that’s really hard to address. So the moratorium thing, yeah, it’s not a good thing for production. Are the problems that they’re trying to address and the reasons they put those moratoriums in place valid? It comes down to your perspective.
Adam Williams (00:42:56): Do you know how long ago that moratorium was put in place on new applications? So, basically, how long of a gap are we creating in that process? Which someday if the moratorium is lifted and they start allowing more applications, won’t that be an overwhelming flow to restart, turn on that spigot again, and let it flow?
Read McCulloch (00:43:20): There’s back pressure building up, absolutely.
Adam Williams (00:43:23): And on inventory as well, right? Because everything then, if I understand what you’re saying correctly, everything that is being built is because it had already gone through the process for application. It was already approved, which, again, to the lay person like myself or to the visitor just passing through town, it looks like there’s a lot of building. It’s nowhere near 1,100 homes that we’re short, right? But it looks like there’s a lot of construction activity.
It’s not just a sleepy town that’s aiming to stay exactly the way it always has been. Those are all approved applications, and we have time then with a back load of intention for building and need for building, because inventory is being halted at some point. Let’s say the moratorium lasts long enough. Everything under construction will be built, and nothing new is underway.
Read McCulloch (00:44:09): The impact of that’s down the line because, to your point, houses are still going up. Those are still in the pipeline. They’ve yet to be habitable. And so, as soon as they are, that will take the load off, reduce the pressure of the housing market seeking out these units. But at certain point, yeah, the inventory is going to drop off because there wasn’t new construction continuously. And so, yeah, we’ll find out.
Adam Williams (00:44:35): If there’s a moratorium for five years, no new applications, and then there’s a building pressure all the time because of more people needing houses and wanting houses, we’re five years of building work, like that workload, we’re behind. It’s like showing up after a vacation and finding your inbox at work is just super full. It takes you time to get through it.
Read McCulloch (00:44:56): Yeah. And I think the moratoriums that we’re looking at were like four or six months. They were not very long-term, nothing close to five years.
Adam Williams (00:45:02): Okay.
Read McCulloch (00:45:03): The point was, “Hey, we got a problem. Let’s halt things, collect our wits, resolve this problem, so that we can move forward with intention.”
Adam Williams (00:45:10): Is it kind of a start and stop thing that we have going then with that?
Read McCulloch (00:45:15): I can’t imagine they can do more than one moratorium in close proximity, because it’s just intolerable, right?
Adam Williams (00:45:21): Okay.
Read McCulloch (00:45:21): You can’t just halt an industry because you have a problem. You got to solve that problem. The question is, are they solving the problems they identified? And I can’t answer that very well because the moratorium thing is not something I really followed closely, because it’s more of an open market issue, and the projects that we have are underway and continuing to move forward.
Adam Williams (00:45:39): Okay. Another… I suppose it’s a hot-button issue for some people, and that is short-term rentals and how Airbnb and Vrbo-type short-term rentals affect housing affordability. I think some people feel like it doesn’t. Some people feel like we need to limit the permits that are allowed for that in a town. Some people believe free market should be able to take care of that by saying, “Whoever has the most attractive Airbnb in the best location and the most beautiful experience and the best price, those things will win out. Everybody else will fade away.”
But another question for me is when you have corporate entities buying up housing inventory because it’s an investment for them to turn it into a full-time Airbnb place. So with that bucket of everything I just said about short-term rentals, do you have perspective on that and how that affects or not housing affordability and what we need here?
Read McCulloch (00:46:30): This is early on in the discussion about STRs, short-term rentals. I think it was in Salida. They went around and did a count, and they came up with three to 5% of the actual inventory was being used for short-term rentals. Whether or not that’s accurate, how much of a problem is this truly in the grand scheme of the entire housing stock? How much are we losing out? And if you took those away from short-term rentals, would they become long-term rentals? TBD.
(00:47:00): But when you introduce these venture capital firms, or whatever, that come in and buy up a bunch of units and are leveraging them for the short-term rentals and their profits and whatnot, they took a bunch of houses off the long-term rental market, for sure. And what is that impact? It’s hard to tell.
Short-term rentals are basically hotel rooms. Why aren’t they being treated like hotel rooms? Why aren’t they taxed like hotel rooms? Why aren’t they being treated like commercial property? You know what I mean? Those are the things that would level the playing field, at least on a market basis, of saying, “Okay, you’re renting a room, whichever hotel, motel, B&B, Airbnb, whatever it is. Make it fair for everybody, and that will help level the playing field.”
(00:47:46): Do we want to be Breckenridge and have nothing but condos and short-term rentals, and very few locals? That’s what happens if you let it be completely unregulated. So what’s the answer to that? Well, it’s an important part of our economy, and it’s a great option for visitors, right? Don’t have to stay at the hotel or motel where it doesn’t quite work for them. Maybe they can get something else.
But are they paying a fair price to the community for that opportunity? Who’s making the buck? And are those bucks leaving for, again, these firms that are buying up a bunch of rentals and operating that as an enterprise?
Adam Williams (00:48:24): I think it’s another complicated piece of this overall complex topic, isn’t it?
Read McCulloch (00:48:29): It is. It is. And, I mean, in this discussion, I feel like I’m not giving you solutions or good answers, the answers you want to these things. And I think we’re still working on trying to find those answers and pointing to the root causes of the problem because, again, it’s so many different factors coming in.
Adam Williams (00:48:48): I don’t know what answers I want. I think I’m trying to just learn, and I trust that the questions that I have are ones that other people in the community and all over probably also don’t know the answers to. I look at my role here as facilitator a lot of times, between the person who is sharing the information in your seat and the listener who’s receiving it, and I like to learn along the way. And as I guess we’ve already covered, this is an unbelievably complicated topic, at least in my mind. So I’m going to keep firing questions at you.
Read McCulloch (00:48:48): Keep going.
Adam Williams (00:49:22): We’ll put it out there, and hopefully, people listening can sift through. And I would love for this, actually, to help stir community discussion. If we have it out there as a broader community conversation, not the occasional meeting of a certain group or not the occasional news article. But can we somehow foster conversation around all the things we don’t know? Maybe we end up finding out something, figuring out something that we can know, right? I mean, just getting into the conversation together.
(00:49:53): It actually makes me feel better, by the way, that if you have spent the time that you have, and you have the expertise that you do, and the insights that you do, that you’re being honest and saying, “We’re trying to find our way through it.”
Read McCulloch (00:50:03): Desperately trying to find our way through it, and trying to learn more about it. And it’s such a huge topic. It’s difficult to dissect a single-source problem solution.
Adam Williams (00:50:13): Let’s talk about community land trust. This is a model that, from my research, my understanding, it’s been around since the ’70s and how it’s been used more. Maybe was also being developed and used in places before that, in North America, in the UK, in India, I’m going to guess elsewhere. You had a mentor, as it turns out, you serendipitously encountered, and that turned you onto this method of approaching housing affordability. What is this model through the Chaffee Housing Trust? What is it that you see as the possibilities in it?
Read McCulloch (00:50:53): Let’s start with the root cause we’re trying to address. And so, if you’re working in the tourism-based economy and you’re a renter, and you’re basically paycheck to paycheck, what happens? How long can you sustain that? Right? What happens if you try to start a family or do anything? Are you building any equity? Are you building any wealth? The American dream, right? Is any of that happening for you? And obvious answer is no. That’s just a repeating cycle that has no way out. Basically, you’re paying someone else’s mortgage. You’re building up their wealth, and their asset slowly goes from the bank to them, and that’s how they create wealth.
(00:51:33): So how do we create wealth in this country? Homeownership, historically, has been the primary means for a lower-income household to work their way up into the middle class. So, back in the day, with the GI Bill and other opportunities, the costs of the things we talked about earlier, that was accessible. It’s no longer accessible.
So with the community land trust model, what we can do is we can sell you a home. We’re going to do everything we can to reduce that home price down to what you can afford, so that you’re paying 30% of your monthly income on whatever it is, and that you have enough money for the rest of your life. And then you start paying a mortgage. You own the home, but you don’t own the underlying land. We own the underlying land. And like a commercial ground lease, we have a ground lease with you that says, “Hey, you can have your home on our land for 99 years.” Definitely going to outlive you. You can pass that home on to your kids, and the 99-year clock starts again.
(00:52:29): You get homeownership, but you’re not realizing the full cost of that homeownership, because we took the land out of the equation, is one way to look at it. We brought in other subsidies to get that price down to where you could afford it. So now, instead of being a renter or paying someone else’s mortgage, you’re paying your own mortgage. Your mortgage payments, you’re building equity.
If you stay in there for 30 years and you pay the whole thing off, you own that home, and that’s an asset that you can leverage, that you can pass on to your kids. That’s intergenerational wealth. So we’re trying to create the opportunity for people to realize the American dream in an environment where it’s not available to them because of everything that we’ve talked about up until now.
(00:53:07): So to get them in that… The ground lease also has a bunch of things that are written into it that says, when you want to sell your home, it’s going to have increased in value, we hope. But you only walk away with a portion of that value. So let’s say it went up $100,000 in appraised value. Instead of getting 100,000 as closing, you get 25,000. But the next person coming in behind you, looks just like you when you bought it, can barely afford it just like you bought it, or that’s what they could afford, and the price that they pay is what you paid plus that 25,000.
(00:53:43): So we build a home. We subsidize it up front the first go. We don’t need to resubsidize it again. And for generation after generation, home buyer after home buyer, people can move in. They’re not paying rent. They don’t have those insecurities. It’s their home. They build some wealth through their mortgage payments. There’s hopefully going to be some appreciation, all the things in life that happen for them.
And at a certain point, they can move on and they can buy a market rate home because they’ve built up that 20% or they’ve improved their job, they’ve improved their situation. They’re ready to go out into the open market. We call them stepping stone homes. So you take a renter, you turn them into a homeowner.
It used to be you could just do that. Now there’s this huge gap between those two things. And we fill the gap with our program by giving people the opportunity to get into homeownership, to build intergenerational wealth.
Adam Williams (00:54:30): I want to make sure I’m clear on my understanding. From that example, with $100,000, it sounds like 25% would go to the homeowner. The other $75,000 out of that, does that go to the Chaffee Housing Trust in this case? Where does that go?
Read McCulloch (00:54:43): It just stays in the home.
Adam Williams (00:54:44): Got it.
Read McCulloch (00:54:45): So if you paid 200 for the home, 200,000, and it went up $100,000 in value, which is very real, you are going to sell it for 225. That new buyer is going to pay the 225. The other 75 didn’t go anywhere. It just stayed in the home.
Adam Williams (00:55:01): Okay.
Read McCulloch (00:55:02): So it’s captured in the value of the home, and no one touches it. That home increases in value, but no one’s able to cash that out necessarily. The way that’s structured, just the 25% comes out because you were a homeowner and it appreciated in value. You get some of that. You maintained it. When you sold it, it was appraised at a higher price because of your tenure there.
Adam Williams (00:55:27): Is this the same thing as deed-restricted housing?
Read McCulloch (00:55:31): Great question. So deed-restriction housing is intended to achieve the same purpose. Typically, deed restrictions do a 3% annual or 2% annual increase. So it’s just a fixed increase from what you paid for it at the time. It’ll go up 3% each year. So you pay 200. At the end of the year, it’s 206. At the end of the next year, it’s 212 and change. You know what I mean? It’ll go up artificially at that rate.
I really don’t like that because it doesn’t incentivize you to maintain the home. You’re not going to get any more for it. It’s not a real market situation where you’re a true homeowner and you have to deal with the ups and downs. What if the market goes down? Well, it’s still fixed 3%. So that’s one reason I don’t like the deed restrictions. You could do the 25% in a deed restriction, but it’s complicated, and people choose not to.
(00:56:20): But here’s the more important thing. In a community land trust model, we own the underlying land. In a deed-restriction model, the homeowner owns the land at the home, and we place a restriction on that because we subsidized it to make it affordable to you. At the end of 30 or 40, or whatever, how many years, that restriction goes away, and the last person owning that home free of restriction can just flip it out on the open market and realize this huge gain, huge windfall profit to that one household.
(00:56:53): To us, that’s unfair. All that public subsidy that went into building that home is lost. If that home goes into foreclosure anywhere along the way, it’s lost. So, to me, that’s not a very good model. But a lot of people are like, “No, you own the house and the land. You can’t separate the two.” And yeah, things should go back out on the open market. Well, that means that every 30 or 40 years, we have to build a new unit just to stay in pace with that model, right? The restrictions left, goes away, we have to build a new one just to keep that inventory.
(00:57:23): In a community land trust model, we own that land. A hundred years from now, who knows what’s happening in this community? That house is a scraper. Who owns the land at that point? The community, through the nonprofit. What happens to that land? The highest and best interests of the community are realized because the community owns that land. Imagine if that had been placed hundreds of years ago and scattered all over town. There were these lots that were owned by the community. That we wouldn’t be in the situation we’re in, or at least not to the degree we are, had that existed.
(00:57:57): So that community control, community ownership, and underlying principle of who owns the land, that’s a foundational part of the community land trust. A deed restriction is a legal tool that works, but its benefit is elusive and goes away at a certain point. That’s not the best thing we can do. The community land trust model is the best option we have right now.
Adam Williams (00:58:19): How do you typically secure land into this model?
Read McCulloch (00:58:23): Donation is a primary driver, and that really helps us. A local market, where land prices are astronomical, it’s really hard for us to compete. In Salida, they have an inclusionary housing policy that compels developers or builders to do something about affordable housing, to chip in to the problem. And some folks just choose to donate land, natural habitats.
Tom Pokorny and Dan Thomas donated a parcel to us. They recently donated two new parcels, and we’re talking about two more. Because they have an obligation to address affordable housing, they say, “Okay, great. Chaffee Housing Trust, here, will you guys take care of this for us?” There is also an opportunity for us to buy some land in one of the developments at a reduced price. Again, because of the inclusionary housing policy.
(00:59:12): Here in Buena Vista, we’ve been able to get some units in the farm where the initial price was low enough that we could afford to sell it and retain title to the underlying land for the reasons I talked about. So all different ways. There’s projects where we just have to buy it outright for what it is and figure out the gap and address that issue. So by hook or by crook, we have to find a way to secure the land.
Adam Williams (00:59:37): Does it often come passively to you when it comes from donors? Like someone who has a ranch, and they have a lot of acreage. They have some piece of that, or all of it, they want to be able to donate. Or are those conversations you are actively seeking in order to talk about this opportunity and the community land trust model with owners of land like that?
Read McCulloch (00:59:59): If landowners wanted to leave a legacy and they care about the community, this is a way that they can make a huge impact. Allocate some of their property for housing, and it gets permanently restricted to that, and we use the tools available to us, including the community land trust model. That really works.
The challenge is, out of the municipalities, the cost of building for sewer, I’m sorry, septic and well, make it somewhat prohibitive for us to be able to do that. Whereas if we can connect to city sewer, city water, and there’s more density allowed, the cost per square foot of land goes down, and that makes our formula work. Or the cost of development, I’m sorry. Parcels of land in town even more so than parcels out in the county. Yes.
Adam Williams (01:00:51): I read in the news recently that there was… I’ll call it a success. It’s the Forest Creek Cabins. That was land that a woman, as I understand, chose to donate. Is that right?
Read McCulloch (01:01:03): That’s correct. Well, she chose to sell it to us at a fair price.
Adam Williams (01:01:07): Okay. And there’s grant funding or some sort of funding that came in to help with that process. Is that what it is?
Read McCulloch (01:01:13): Yeah. So a great example. She has seven cabins that were, at one time, rental cabins. Some of them for visitors. When she acquired it, she turned it into affordable rentals, and she, just from her heart, wanted it to be affordable to local folks, kept the rents very low. And these are all folks who work in the community. She’s ready and done to retire, and she says, “Hey, I want this to stay affordable. What can we do?”
So we work out a deal where we say, “Well, here’s what we can afford to pay,” and it was well below market, but she was willing to do that for the cause. Then we go and we get a grant from the state, and we get a loan at very low interest, and then combine that with a second loan at more or less market rate. We get the numbers to work so we can buy the entire thing. And then we work with the existing renters to say, “Hey, let’s see if we can get you into ownership in the unit that you already live in.”
(01:02:07): So right now, we’re just in that stage. We actually have a meeting tonight with the current renters and start talking about what the future looks like. We’ll have to condominiumize it so that we can sell off the homes and hold title to the underlying land, and then those folks will be able to build equity and do all those things that we talked about.
So great example of [inaudible 01:02:27] a willing person who wants to contribute to the community’s needs, and then you have resources available through an organization like ours with a track record where the state will say, “Yeah, no problem. We’ll loan you money at half a percent or 1%, and here are the conditions on that. And we’ll give you a grant to lower the costs.” All those things. That’s our job, is to piece together that puzzle, that capital stack is what they call it, and we have to add enough layers in there to be able to purchase or acquire whatever it is that we’re trying to do.
Adam Williams (01:02:56): A long time ago in this conversation, I mentioned that you had those many years in outdoor leadership, and then, at some point here, you transition to the housing affordability challenges and started Chaffee Housing Trust. And I’m curious how you acquired this knowledge and how you leaped into such complex things to figure out how to piece these things together, and how to find the resources and the funding, and the people with the land.
(01:03:21): There’s a lot going on in here. You’ve become this expert on it. Looking back now, over the several years that you’ve been able to do this. Well, nearly a decade I guess since you returned to it, right? What do you see as your own growth, personally, in your knowledge and expertise and, I don’t know, as a person through this process?
Read McCulloch (01:03:41): I mean, first off, just how do you figure these things out, or where do you learn? Housing is one of those fields that I just love. There are so many incredibly knowledgeable experts out there that will volunteer their time, volunteer their documents, or whatever processes they have. I mean, I have spent so much time just calling up the experts and learning. I was on the phone with one of my other mentors at the Rocky Mountain Community Land Trust in Colorado Springs this morning because I’ve got a big grant application that we haven’t done before, and she has, and she gives us so much of her time.
(01:04:14): So there’s folks in the field who really want the big picture to work, and it means helping each other out. And I do the same for other folks who call me, to the extent I can volunteer things, share things, because together, we’re much stronger. So I think that’s the process. Where does it go from here? I haven’t even contemplated it.
Adam Williams (01:04:34): I feel like there’s so much optimism that must be required, at least at some level, to always be there for you. So much stamina. This is such… I don’t want to use combative language like fight or whatever, but it’s a thing out there that it’s going to be going for a while. You are working on this. You have been, and assuming you’re going to stay here and continue in this capacity with the Chaffee Housing Trust, you got to take a long view, I guess, at the effort that’s needed. How do you look at that?
Read McCulloch (01:05:04): Yeah. I mean, to use as an analogy of the outdoor world, this idea of going on an expedition and enduring whatever comes your way, being prepared for it. That’s my approach in the housing world. Perseverance is absolutely critical. I mean, the Forest Creek Cabins has taken us two years to get to this point, and I was just signing, closing documents on those loans and grants yesterday and FedExing them off. So persistence, number one.
(01:05:39): I think creativity in that there’s always a workaround, and you’re always going to get barriers thrown up at you. And so when they come, it’s not the end of the world. One of my board members said, “Control the things you can control, and don’t let the other stuff cause you to sweat because you can’t affect those things.” So we run into problems all the time. It’s every day. Oh, another impediment. What’s the workaround? How do we resolve this? Get creative. It’s a really exciting and fun field to be in for that very reason, like constantly thinking on our feet, pivoting, and finding the next path to the destination.
Adam Williams (01:06:14): I don’t want to make this about you personally, because I don’t think that you look at it that way, but I’m curious if there is a sense of… Well, I’ll use the word legacy, but I don’t want to put the burden of that on you. Basically, how do you think you will feel about the time you have spent in working for that more compassionate, greater good I described at the beginning of this conversation, when the time comes that maybe you say, “You know what? It’s time for me to retire. It’s time for me to pass off the reins”? Do you have a sense of the meaning of that to you, to be involved in this work and doing it for so long?
Read McCulloch (01:06:50): So back to the passion thing. I wake up every morning, and I have no problem jumping out of bed, getting my coffee, and getting after it because there’s so much to be done, and it’s not a job. It is a passion. So with that motivation day after day, over time, I have seen incremental change. I have seen things really come around, and good work being done.
That alone motivates me to say, “Okay, there was this really interesting challenge that needed to be tackled in the community. I was in a position to tackle it because I got a great education, and I found a mentor, and all these people are willing to help me. My job should be to make those connections, make it happen, because I’m in the position to do that. And when I’m done with this, I’ll figure out a bunch of stuff, and I’ll pass that on to somebody else, and they’ll step in my shoes. We’ll be able to create some institutions that will persist and help address the very issues.”
(01:07:46): We got to be on the fun, creative, entrepreneurial startup phase of tackling these issues, and we’ve collectively, as a community, have figured out a ton. We now have a Chaffee Housing Trust. We now have a Chaffee Housing Authority. We’re talking about local funding to perpetuate the Chaffee Housing Authority to really get the problem addressed to some degree, to some scale that is meaningful to people. So, yeah, when I walk away and say, “Well, shoot, those things weren’t there before, and they are now,” that’s awesome.
(01:08:18): The best part is meeting the individual homeowners, getting to spend time with folks when they first walk into that home, and they know that it’s theirs, or after closing, going to [inaudible 01:08:30] association meetings and seeing neighbors fight it out over the trash or the kitty litter or whatever the issue is, but resolving the issues because they own that, they have a stake in it, and they are passionate about it, and they have to figure it out. Seeing neighbors co-parent, like, “Hey, I got to run to the store. Watch my kid.”
They’re out on their porch, and they’ve got an eye on everything. That stuff is amazing. That opportunity didn’t exist for those people before. To me, that’s ultimate satisfaction. What a great thing to get to know those folks.
Adam Williams (01:09:03): It’s kind of funny. What’s popping to mind at the moment is It’s a Wonderful Life and George Bailey, because he wanted to build affordable housing, right? And then they have that scene where they’re welcoming people and having a ceremony for people to come into their new house because they’ve been able to afford it finally, after saving and working so hard for it. That’s not entirely random, but maybe a little. I’m not trying to call you George Bailey.
(01:09:28): But, Read, thank you for sharing so much of your insights on, again, the very complicated and broad subject that this is, as I’m trying to wrap my head around it. And I hope that this is maybe a big step for me into this subject matter, because I think we need to keep having the conversations. I mean, you and I, but also me and others in the community who have expertise and insights to contribute. Again, I would love to see us create more of a community conversation around it, and I think that Looking Upstream can be a place to do that. So thank you.
Read McCulloch (01:10:04): Absolutely. My pleasure. Thank you for what you’re doing, because you’re contributing to this. Everyone has something to offer that is going to advance us. And for folks to have the opportunity to hear the complexities of this, it advances the cause, so thank you for doing that.
Adam Williams (01:10:16): I hope that people will hear my questions and be willing to also ask their own questions, and not feel like, “Oh, I’m the only one who doesn’t know.” If I can lead the way by bumbling through it, and that’s of use, I’ll take it.
Read McCulloch (01:10:29): Well, good on you.
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Adam Williams (01:10:44): Thanks for listening to We Are Chaffee’s Looking Upstream podcast. I hope that our conversation here today sparked curiosity for you. And if so, you can learn more in this episode’s show notes at wearechaffeepod.com.
(01:10:56): If you have comments or know someone in Chaffee County, Colorado, who I should consider talking with on the podcast, you can email me at adam@wearechaffeepod.com.
I also invite you to rate and review the podcast on Apple Podcasts or Spotify, or whatever platform you use that has that functionality. I also welcome you’re telling others about the Looking Upstream podcast. Help us to keep growing community and connection through conversation.
(01:11:21): Once again, I’m Adam Williams, host, producer, and photographer. Jon Pray is engineer and producer. Thank you to KHEN 106.9 FM, our community radio partner in Salida, Colorado.
(01:11:31): The Looking Upstream podcast is a collaboration with the Chaffee County Department of Public Health and the Chaffee Housing Authority, and it’s supported by the Colorado Department of Public Health and Environment’s Office of Health Equity.
(01:11:42): You can learn more about the Looking Upstream podcast at wearechaffeepod.com and on Instagram at wearechaffeepod. You also can learn more about the overall We Are Chaffee storytelling initiative at wearechaffee.org.
(01:11:55): Till the next episode. As we say it, “We are Chaffee. Share stories. Make change.”
[Outro music, horns and guitar instrumental]
