A regional collaborative approach to solving blight and housing: The Southeastern Plains Workforce Housing Project

By Rick Klein, City of La Junta city manager

The Southeastern Colorado Workforce Housing project broke ground in April 2022, delivering 83 workforce housing units in 10 locations across the six counties of Baca, Bent, Crowley, Kiowa, Otero, and Prowers, in the southeastern plains of Colorado. This region faces unique challenges that are only found in the most rural areas of the state. This project is a model for how small rural communities and local governments can collaborate to build housing at price points that their workforce can afford through regional economies of scale. These economies of scale, coupled with an incentive package from 16 local governments across the six counties covering costs such as architecture, surveying, tap fees, infrastructure development, and entitlement planning, have allowed this project to attract multiple investors to make this project successful. Local governments such as the City of La Junta instituted policies that allowed blighted properties to be remediated and then donated land for new housing within the project.

Working collaboratively, the project aims to empower the region’s workforce to have safe, secure, and energy efficient workforce housing at price points of $165 per square foot. This has allowed the project to target area median incomes (AMIs) between 70%-120% for both rental and homeownership. These price points were achieved through regional economies of scale and utilizing cooperation of the local governments, as well as the creation of a public/private partnership and the completion of selecting a developer through a competitive RFQ process.

Michael Yerman, owner of MY Rural Planner, has made all the difference because of his ability to put together and sell a project of this size with so many variables and involved entities.  Stephanie Gonzales, executive director of Southeast Colorado Enterprise Development Inc., has been instrumental in performing the administrative duties as well as keeping 16 local governments updated on the project.

Southeast Colorado Enterprise Development Inc., (SECED) the Regional Council of Governments, serving as the fiscal agent for the 16 local governments and the property manager for rentals built within the project, worked with the local governments to secure funding and land for the project across the region. The Southern Colorado Economic Development District assisted the local governments with attracting opportunity zone investments. MY Rural Planner, working as the project manager, ensured all planning, surveying, subdivision, engineering, infrastructure, building permitting, and other land entitlements were properly in place prior to groundbreaking.

The City of La Junta passed a Dormant Fee Ordinance on properties.  This fee requires the property owners to pay service fees for electric, water, and wastewater, to address problems when “dormant” consumers – those whose utilities were turned off an excess of six months – do not pay their fair share of the utility costs for maintenance of the system and create a disadvantage to the consumers who do pay those systems costs each month. The City had a side benefit that some of the properties were dilapidated to the point the owners were willing to donate the property. 

Other blighted properties that the city identified as hazardous were taken to court to obtain the right to clean up the properties.  With these rights, you don’t own the property, but can proceed with the demolition.  You have to go back to court to recover the demolition costs.  The owner has the right to pay the costs and keep the property, but the demolition costs usually are significant enough that the owners give up the property.  The city had to have a phase one environmental assessment done on the properties in order to determine whether hazardous materials existed.  The eligible properties that had environmental issues were put on a list to apply for funds.

The city then applied with the Environmental Protection Agency (EPA) through the superfund program, Non Time-Critical Removal action under CERCLA.  The city contacted the Colorado Department of Health and Environment to get a letter of eligibility, and then talked with the EPA’s representative to schedule the demolitions. This planning process takes about six months.  After the EPA approves and funds the project, they bring in their contractors to perform the work.  The city provided street closures.  The properties are then cleared for new construction.

La Junta donated lots to the SE Colorado Workforce Housing project to bring much needed housing to our community.  With the new construction in our older neighborhoods other property owners are also stepping up to improve their properties.

Through regional collaboration this project has delivered much needed workforce housing to the region that has reset the appraisal market, created a viable lending ecosystem for future local builder involvement, and created additional regional capacity for future housing projects.