How 'amenity migrants' push out locals

Communities once sustained by local labor now rely on stock market dividends.

 

$890,000. 

60 percent.

These figures came from a panel titled, not so subtly, The Problem of Amenity Migrants in North America, at the Rocky Mountain Land Use Institute conference in Denver in March. The numbers respectively refer to the average price of a single-family home in Summit County in north-central Colorado, and the percentage of those homes that are second homes and thus vacant much of the year.

So what’s the problem? Second-home-buying “amenity migrants” — those who move to a place because of the proximity to recreational opportunities — have driven up prices so much that no one else can afford to either buy or rent homes in these places. Usually these migrants, also known as “equity refugees,” rely on outside sources of income, either cash from selling out in another market, investment earnings or salaries from work in another community, to buy into the community. The communities’ actual workers — firefighters, cops, teachers, cooks and housekeepers — are left with a commute from as far away as Denver or Leadville (both over an hour's drive), a smattering of “workforce housing,” which isn’t exactly affordable, or living in their cars in the Wal-Mart parking lot.

This 50-unit, $11 million affordable housing project is under construction in Durango, Colorado, where the workforce has been squeezed out of the rental and homebuying markets. Many more projects like this are needed Westwide to solve the current housing crisis. Photo by Jonathan Thompson.
“We are in crisis mode, trying to find out how we can live where we work and work where we live,” said Dan Gibbs, a Summit County commissioner and former state legislator, who lives in local workforce housing. “We are just struggling.”

If it were just Summit County, which is home to Breckenridge ski resort and has become Denver’s weekend playground, we might be less concerned. We could write that place off as a loss and set up real communities in neighboring areas. But by now we all know that the problem of not being able to afford to live where we work is not limited to Colorado’s posh resort communities. It’s like a disease, spreading across the West, both a symptom and cause of economic inequality. Oftentimes the carriers are those amenity migrants, but the malady can also be spread by the economic mix of a particular community, a simple imbalance between wages and housing costs. Denver, for example, has a robust economy and plenty of jobs, but its core neighborhoods are becoming unaffordable.

“Housing prices are rising faster than average wages. That’s why this problem is not going away,” said Don Elliott, Director of Clarion Associates, a land-use consulting firm, in another panel. “And the West is particularly stressed.”

Take another Summit County, this one in Utah, home of Park City, where the average home costs $700,000, and just 3,000 of the 8,400 housing units are occupied year-round. If you make the median income, whether it’s from a wage or a trust fund, you can’t afford to buy a market rate house. “We’re losing the middle income bracket big time,” says Kirsten Whetstone, Senior Planner for Park City. Her town “really struggles to remain a complete city, to balance resort versus real town.”

Clearly, it wasn’t always this way. Many of the West’s most unaffordable towns, from Telluride to Aspen, both Summit Counties to Moab, once relied on extractive industries, i.e. mining, for their livelihood. Mining may have ravaged the environment, and can be hard and dangerous work, but in the days when unions were strong, it provided a well-paying, stable occupation of the type that can support a robust middle class. And the industrial nature of mining towns, regardless of how lovely the surroundings, tend to be a turn-off for amenity migrants. So housing stayed relatively affordable.

When mining collapsed, those jobs — at least some of them — were replaced by jobs in the tourism and amenities industries, from ski areas to nice restaurants to bike shops and guide services, not to mention real estate agents. Today there are surely far more service-industry employees in, say, Moab, than there ever were miners. But there’s a catch: A mining machine operator makes a heck of a lot more than your average bike mechanic, ski patroller, waiter and even more than most real estate agents, the creme de la creme of resort town occupations. A recent Governing magazine analysis found that, amongst 191 U.S. metros, Flagstaff, Arizona, which relies heavily on tourism, has the lowest cost-of-living-adjusted wages of all.

It's almost as if the desirability of a place is inversely proportional to opportunities to make a living.

A good measure of this phenomenon is the percentage of a community’s income that comes from labor, as opposed to that which comes from other sources, primarily investments.

There’s another catch. All those service industry folks’ livelihoods rely on attracting more and more people to their communities. And the more people they attract with their amenities, the more folks are going to want to buy a home, either to live there or just for vacations. And then the housing inventory will shrink and rents and sale prices rise. Exacerbating the situation is the growing trend toward short-term and vacation rentals of guest homes and condos, taking them out of the long-term rental market. The actual workers, then, from the chef to the teacher to the cop, have to move “down valley” to some less desirable, and less expensive bedroom community, from which they must commute.

A good measure of this phenomenon is the percentage of a community’s income that comes from labor, as opposed to that which comes from other sources, primarily investments. According to Headwaters Economics research, nearly half of the total personal income in Teton County, Wyoming, home of Jackson, comes from investment-related sources; Pitkin and Summit Counties in Colorado aren’t far behind, and Grand County, Utah, home of Moab, is also high on the list. Compare that to extractive-industry-heavy San Juan County, New Mexico, where investment-related sources only make up 12 percent of total personal incomes.

Our communities have transformed, from economies that were sustained by the local labor of local residents, to ones that rely on stock market dividends reaped by folks who might only have a part-time home in the community. They’ve transformed from places that were occupied by local workers, to those that are made up of often-empty but damned expensive homes.

In many places, the local governments and non-profits are doing all they can to remedy the situation. Some have inclusionary housing ordinances, which require developers to make a certain proportion of a new developments’ units “affordable.” Other communities have housing authorities that use tax revenue or impact fees on developers to build their own affordable-housing. But these initiatives, at best, result in less than 10 percent of the total housing stock being “affordable.” That’s not enough.

These sorts of band-aids won’t heal this growing problem, this crisis. It will require a far bigger, regional effort and, most likely, a fair amount of public spending on large quantities of a mix of housing to accommodate the people who keep our communities running. That’s no easy goal.

“The real problem,” says Elliott, “is that you don’t have a culture of providing homes to the people who can’t afford them.”

Jonathan Thompson is a senior editor at High Country News.

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