This property is located south of the Montaña Azul development along South Craft Drive at where it would intersect an extension of West 8th Street, and contains ±42.99 acres. The property is currently vacant and is being proposed for a residential development. The annexation petition is substantially compliant (Res. No. 7-2022) and the property is eligible for annexation (Res. No. 10-2022). The subject property is included in the City's 3-mile annexation plan with a proposed zoning designation of Residential High.
 
The City's 2021 Housing Needs Assessment adopted by City Council shows a deficit of 515 units across housing types and income levels that must be met to satisfy current need through 2026. This deficit exists for a multitude of reasons but none more pressing than the capital gap created by the exceedingly high cost of building materials and infrastructure. This gap, exacerbated by COVID shortages, means the cost to build is so great that the only homes that can be built by a private developer to recoup the cost of construction are at the highest end of the income spectrum in Alamosa. All other types of housing construction, from starter homes to workforce housing and low income rentals to multi-family units must be subsidized in some way in order to be built.

Historically, local governments, including Alamosa, have taken a hands-off approach to housing, and allowed the private market to dictate residential development. This has resulted in housing shortages for our workforce and specialized groups like students, the elderly, and the disabled. The workforce housing shortage is so severe that our largest employers are saying it is their single greatest barrier to hiring and recruitment. These factors coupled with the housing crisis across Colorado and the west has empowered local governments to begin guiding housing development and redevelopment through regulation and incentivization.

City staff began meeting about this property with Community Resources and Housing Development Corporation (CRHDC), starting in early 2020. Based on the community's needs, we encouraged CRHDC to look at diversifying their product types and density to increase their return on their infrastructure investment. Their response has been a resounding, fundamental shift in their approach to residential development in Alamosa including adding subject matter experts to their team and innovating on a level formerly unseen in our community. Staff has met weekly since November 2021 with the CRHDC team to work through pre-development details, including water distribution and sewer collection, storm water solutions, housing types, layout, street connectivity, and financial feasibility. 

CRHDC has a long history of bringing quality housing to Alamosa. In their 37 years of development here, they have built over 600 homes for local residents. While the City works with many housing developers, CRHDC, with their technical development expertise and proven track record is currently our most viable partner to help the City successfully implement our Housing Action Plan. 

To directly address some of the comments regarding equity in development from CRHDC’s eligibility hearing on May 18, 2022, we feel it is necessary to discuss the history of the emergency annexation of the Stockton Addition, the mechanisms available to fund infrastructure including roads, and the finance incentives traditionally offered for affordable housing. 

The Stockton Addition was annexed through an emergency annexation in 2002 because the residents' wells were contaminated by surrounding septic systems. The minutes from the January 16, 2002 meeting show that Council discussed the roads at length and decided that the residents themselves were responsible for forming a Special Improvement District (SID) to build the roads. The City installed water infrastructure (lines, valves, taps) using $221,000 of enterprise funds in 2003 to serve the developed properties. The property owners were only asked to contribute a $1,000 tap fee per residence. In 2007, the City applied for and received a DOLA Community Development Block Grant for $208,000 using $53,500 cash and in-kind match, to install the sewer services in the area. Again, the $1,000 tap fees were the only thing paid for by the property owners. Essentially in the Stockton Addition, for $2,000 each, 47 households were given a half million dollars’ worth of infrastructure primarily through the use of City funds and grant dollars.

Secondly, although there are many grant sources available to fund new development, few to none exist for existing developments. Much like the conclusion of Council in 2002, an SID is an extremely practical option to build roads in the Stockton Addition. A rough estimate to construct paved roads in the area is between $2.5 and $3.1 million dollars at $400-$500 per foot. The residents could form an SID, whereby the City fronts the cost of improvements, and the residents within the district would repay the cost over a 15-year period based on street frontage per property. SID’s were commonly used in the 1970’s and 1980’s in Alamosa to provide these kinds of amenities on a neighborhood scale. They were also recently used to fund sidewalk on Clark (2013), and gas and electric in the Carroll addition (2014). A second option could be for Council to recommend the area be evaluated again for funding if the 2029 street trust fund sales tax is renewed. A third option could be a combination of SID and street trust fund tax. A fourth option could be the City partnering with the residents to pursue grant funds should a program that funds existing developments present itself. Occasionally, road reconstruction can be funded if they are associated with other projects, such as with schools, downtowns, or pedestrian safety and staff continues to research the new infrastructure grants associated with the Bipartisan Infrastructure Bill.  

Finally, City Council has historically offered incentives to income-based housing developments such as waiving fees for building permits, water and sewer taps, etc. Like all other developments in the city, the attached draft annexation agreement requires the developer to pay for all necessary utilities to serve the development, including streets, water and sewer lines, tap fees, and water dedication fees. Although CRHDC is not currently requesting any fees be waived, staff is using their development as the basis to pursue infrastructure funding for the City. Using guidance from our Housing Action Plan and capitalizing on the new funding programs created by DOLA’s Division of Housing, staff has applied for $1,384,000 to upgrade sanitary sewer deficiencies discovered in our recently completed Master Utility Plan (MUP). These upgrades will help the subject property but more importantly, will facilitate nearly all the future development in Wards 2 and 3 and support the needs of current residents including those in the Stockton Addition. 

It is important to note that annexing this property and partnering on grant applications for infrastructure in no way hurts any other part of the community and does not take anything away from the Stockton Addition.  The Stockton Addition would not be eligible for these grants.  Therefore, if the logic is used that was presented during the last Council Meeting, not annexing the property until Stockton Addition is fixed, the entire community will be negatively impacted by not addressing the housing shortage while the City tries to find $3.1 million to build roads that were clearly indicated upon annexation to be the responsibility of the property owners in the Stockton Addition.