Durango: The Best ... town for those with lots of cash
For the third time in less than two years, I’ve been perusing the classifieds for a place for my family to rent in Durango, Colo., the town in which I grew up. Each time the pickings get slimmer, the prices get higher, and the process gets more agonizing.
We’ve been driven to this masochistic ritual because this home — like the last rental we lived in — is going on the market. Given the exorbitant amount of money they are asking for the home, we shouldn’t have to worry about it selling anytime soon, so should feel secure here. If, that is, we lived in a rational real estate universe. Durango, like so much of the West, is not a rational real estate universe.
I suppose we should feel lucky that we’re not in Williston, N.D., which made national news recently for having the highest average rent in the nation. An apartment in that little wind-blown town on the prairie can cost as much as one in San Francisco or New York and the artisan toast craze hasn’t even hit North Dakota. A 3 bedroom apartment in Williston can go for as much as $4,500 per month (granted, it’s furnished and all, but still). Bakkenrent.com offers luxurious, 250 square foot “two bedroom apartments” — which appear from the pictures to be particle board boxes wrapped in white plastic — for $2,195 per month. One of the bonuses of living here? “Alcohol consumption in moderation allowed.” “It’s the perfect housing solution for you and your workforce,” reads the ad.
And that workforce factor is key. Williston’s real estate market has gone zany thanks to relatively reasonable economic factors. There are a lot of jobs, thanks to the oil boom, and they pay well enough that even that $4,500 apartment is “affordable,” at least for the lucky family that can snag a couple of those jobs. When new jobs came to town and wages went up, so did rent. Makes sense.
That’s not the case in so many of the West’s communities. Here in Durango, for example, rents and home listing prices are increasing — by 5 percent over the last year, according to Zillow — but wages and jobs are not keeping pace. The median household income in Durango is about $53,000, some $5,000 less than the national average and $16,000 less than in Williston.
The median Durango household, then, could afford — meaning housing costs don’t eat up more than one-third of their total income — a $250,000 house, maybe a tad more. As long as they had a $10,000 down payment their monthly payment would be about $1,350. Good luck with that. There simply are no homes in Durango for that price: The median home listing price is $359,900 right now, and a 3 bedroom rental, if one becomes available, fetches $1,500 at the very least. Get a couple dozen miles from town and prices go down, but then you have to add transportation costs into the mix, since the rural surroundings are far more bereft of jobs than here in town.
In other words, Durango is like a good portion of the West: unaffordable. In fact, according to a report put out by the Center for Housing Policy last month, the West is plagued with some of the highest share of working households with a “severe housing cost burden,” meaning they pay at least half of their income on housing. California’s the worst, with 32 percent of households under the severe housing cost burden, but Washington, New Mexico, Arizona, Nevada, Oregon and Colorado are all above the 20 percent mark. Not good. A recent Redfin Research Center study found that only 17 percent of California’s teachers can afford to buy a home in that state. Sure, they could rent, but as the NHC study found, renters are twice as likely to have a big housing cost burden than homeowners. That’s bad for the community, as it pushes out the working class. And it’s bad for the economy, because when everyone is spending all their income on rent, they don’t have enough to spend in local businesses.
If people aren’t making a ton of money, then what’s driving the market? It varies, surely, but in many cases, it’s a matter of income inequality. Though the average working person may be making less, the rich keep getting richer, and buying up real estate and jacking up prices. If the house we’re renting now sells, it won’t be to someone who gets all of their income from local work. It will be to someone who is either independently wealthy or an equity refugee who sold out in an even more wacky market and relocated here. Even more cringe-worthy — to me, at least — is the trend that a local real estate agent told me about: Wealthy parents buying their college student kids $450,000 houses and paying cash for them. Let’s just hope they don’t expect the kid to pay them back with the local job they’re going to get after graduating.
And why spend so much on a Durango home? For its amenities, of course, particularly recreation-related (we’re not exactly a culinary or cultural hot spot — we don’t have artisan toast, yet, either). Durango has made more “Top Towns for …” lists than I can count, particularly those put out regularly by the likes of Outside magazine. We have been among the Best Outside Towns, the Best River Towns, the Top Western Towns and the Top Ten Emerging Ski Towns. In most cases, the accolades are warranted, but they should be qualified. Durango: "The Best …. Town, for those with a lot of cash."
Jonathan Thompson is a senior editor at High Country News. He tweets @jonnypeace.