Did you know that Eagle County is Colorado’s youngest county, yet our demographics are quickly changing and our senior population is growing faster than any other segment?
What does this mean for our workforce, and for their affordable housing needs in order to support continued economic growth in our community?
Consider that in 2000, our population over age 65 in Eagle County was just 3%. This increased to 6% in 2010, 9% in 2015 and is forecast to increase to 17% in 2025. This increase in population from retirees is the opposite of what we are seeing from our core workforce of those aged 25-44 years old. In the same 2000-2025 timeframe, our percentage of population is forecast to drop from 42% to 32%.
The growth in our 65+ (citizens aging in place) and the loss our 25-44 demographic (our primary workforce) can be attributed to a lack of affordable workforce housing options. These quickly changing demographics tell the story and support the need for a proactive, publicly funded affordable housing solution.
Some background and understanding of our housing inventory helps frame the housing issue and its impact on our workforce (source: 2016 Eagle County Housing Needs Assessment).
In the current Eagle County housing market (2015 full year sales data), the median sales price rose to $575,000, close to pre-recession levels. In the four-year time period from 2012 to 2016, the area median income (AMI) level has risen 4% while the median sales price of a home in Eagle County has risen 35%. When we look at the current affordability gap we see a $234,310 gap for that 100% AMI family, and even at 140% AMI, there is still a $97,600 gap.
Current estimates of our workforce housing needs are that we need 11,960 new housing units by 2025. The housing demand will be driven by two primary factors, housing demand from job growth and the demand from replacement of retirees as outlined above.
The changes in the Eagle County economy from 2007 to 2016 have been extensive. The recession data from 2010-2012 displayed dramatic changes to the number of jobs and to the unemployment rate, resulting in a lessening of the need for affordable housing. The more recent data shows an almost complete recovery in the employment sectors. Job generation projections for the future are positive, and 69% of businesses in the most recent Workforce Study show that lack of workforce housing impacts their ability to attract and retain employees.
Retiree housing has an increasingly large impact on workforce housing. New workers will be needed to replace current Eagle County workers who retire. As current workers retire, their housing units change in status from units that house workers to units that do not house workers (assuming the retirees stay in their homes). The new employees who fill the jobs vacated by retired workers create a demand for new housing units, and it is estimated that we will need 4,137 new housing units by 2025 just to fill this gap.
It is important to note that the retiree numbers in the report do not include second homeowners or amenity-seeking retirement migrants who may relocate to Eagle County in the future. Both of these in-migration trends have been well documented and show up in the projected increase in the senior population from 2010-2025. Keep in mind that in 2010, our 65+ population comprised 6% of the total Eagle County population and by 2025 that number is projected to rise to 17%.
The 2014 Eagle County Housing Guidelines state the following: “Eagle County faces a gap in the availability of ownership and rental housing that is affordable for the local residents. Residents are burdened by high housing payments. Employees are forced to commute long distances. Overcrowding and substandard living conditions are common. According to the annual workforce survey, employers believe that the availability of workforce housing is a critical or major problem in Eagle County.”
Workforce and affordable housing has long been an issue in Eagle County. The difference today is the demographic data clearly shows an increased need for more affordable housing options for the current and future Eagle County workforce. Addressing our affordable housing issue is essential to the continued success and growth of our business community across industry sectors.
Affordable housing is not a tourism problem; it is a fundamental community problem. It is a problem that can only be addressed with a community-wide publicly funded effort, one that will support our business community. Vail Valley Partnership’s board of governors supports a ballot initiative this fall focusing solely on affordable workforce housing to address this systematic problem.
Chris Romer is president & CEO of Vail Valley Partnership. Learn more at VailValleyPartnership.com