Rep. Joe Neguse introduces bill that would allow area median income, an important metric for affordable housing projects, to be calculated based on zip codes.
After seeing a staggering 12% increase last year, Routt County’s area median income increased nearly 6% this year, bringing the median mark just shy of $76,000 a year, according to data from the Colorado Housing and Finance Authority.
In 2021, Routt County’s area median income was $64,100 a year, meaning it has increased more than 18% in the last two years alone.
AMI is important when talking about affordable housing, as it is a metric that often determines who is eligible to live at a certain property and how much their rent will be. When the 12% increase came out last year, it led to rents at the Yampa Valley Housing Authority’s Sunlight Crossing development to be higher than initially expected.
“The issue is that (AMI) is consistently departing from the reality of the wage earners that we are intending to support,” said Jason Peasley, executive director of the housing authority. “As you have more and more affluent people moving to this county it skews the AMI up because it is a median.”
Median means the middle not average, so 50% of the people living in Routt County are making more than the new $75,900 a year median income mark and 50% are making less.
So while the median income on tax returns filed in Routt County went up, it doesn’t mean that people in the 30% AMI to 150% AMI bracket the housing authority is largely focused on serving saw the same increase in their income. While it isn’t all bad — higher AMIs do allow more people to be eligible for affordable housing — Peasley said increases hit people hardest at properties where rent is directly indexed to their AMI. In cases like that, with a 6% increase this year, their rent would go up 6%.
This also is an issue in mountainous counties like Routt where wages in an urban center like Steamboat Springs don’t mirror what they are in smaller communities. While Hayden is currently working to add affordable housing units with developer Gorman and Company on the west side of town that have AMI targets, the AMIs used to come up with rent levels may not perfectly reflect incomes earned by folks in Hayden.
Last month, Rep. Joe Neguse, a Democrat from Boulder who represents Routt County in Congress, introduced Legislation that would change how AMI is calculated, giving counties the opportunity to calculate AMI on a more nuanced level, such as regionally or by zip code. As AMI is calculated at the federal level and tax return data isn't readily available publicly based on location, it is unclear how this change if put into effect would impact AMIs locally.
Steamboat Springs City Council voiced support for the legislation at a meeting last month and Neguse’s bill has received support from a number of mountain communities like Winter Park, Summit County and the Colorado Association of Ski Towns, according to a release from Neguse’s office. The bill, which has been assigned to the House financial services committee, currently lacks any cosponsors.
Peasley, who spoke to The Yampa Valley Bugle before Neguse introduced the legislation, said the housing authority is working on its own solution to reduce the impacts for renters when AMI surges. While still being developed, Peasley said they are working on a concept that would tie rent increases to 50% of the AMI increase, or 2%, whichever is higher.
“In the case of this particular year using that model, the rent increase would be 2.9%, which is much more palatable than a 6% increase,” Peasley said. “On the flip side of that when AMIs are relatively low, you’re still seeing steady 2% increases.”
Peasley said this is still being worked on with the developer for the housing authority’s Mid Valley project, which is along U.S. Highway 40 on the east side of Steamboat Springs near Walgreens, and hopes to start moving dirt this year. Mid Valley will feature a mix of about 230 for sale and rental units.
“We’ve always had a floor in there, now we are introducing a ceiling,” Peasley said.
Top Photo Caption: Area Median Incomes in Routt County have jumped 18% in the last two years, from $64,100 a year in 2021 to $75,900 for 2023. (Dylan Anderson/The Yampa Valley Bugle)