What The New Solar Requirement Means For Housing In California

As of Jan. 1, every new home or three-story residential building in California has to have its energy powered by solar sources.

Developers and builders have had a couple of years to prepare, but there are clear challenges, particularly for smaller companies. And how could it affect the prices in a state where a lack of affordable housing is already a deep concern?

To learn more about the impact already being felt and what it could be going forward, The Show talked to Dustin Mulvaney. He’s an Associate Professor at San Jose State University and author of “Solar Power: Innovation, Sustainability and Environmental Justice.”

Last Resorts: The West’s Rural Outdoor Paradises are Getting Richer

HEBER CITY, Utah — Tucked below the jagged, snowy Wasatch range 20 miles south of Park City, the Heber Valley looks like a miniature Switzerland. Dairy cows graze in bright green pastures and a small farm sells artisan cheeses and milk.

But the valley’s days as a bucolic farmland may be numbered. Over the past decade, it has become a maze of subdivisions and massive homes, all built to house a growing number of wealthy retirees and stock market investors who have flocked here for its pastoral setting and its proximity to Utah’s world-class ski areas.

Sue and Rick Nathanson enjoy the tranquility of Heber, and were drawn to the rural farm feel of the area. But a lot of the dairy pastures they fell in love with are being razed for new housing developments. (Photo by Nate Hegyi/Mountain West News Bureau)

In 2015 retirees Sue and Rick Nathanson moved to Heber Valley, in part, to get closer to Deer Valley Resort.

“Best groomed skiing in all of America,” Sue said. “We came down here and [Rick] had never skied it. We bought a house anyways.”

They now own a house in the luxury subdivision of Red Ledges in Heber City. It is the Nathanson’s second home — their other is in Palm Springs, California.

Ever since the end of the last recession, wealthier Americans such as the Nathansons have been moving to small, recreation-focused communities across the West, according to a recent report from the nonprofit organization Headwaters Economics. The influx of new money is transforming once-sleepy logging or ranching towns in ways that are both good and bad — revitalizing communities but driving housing costs beyond what’s affordable for many residents.

“Who is benefiting from these booms in recreation communities?” asked Megan Lawson, an economist at Headwaters and author of the study. “Who is not?”

Rural Growth

Empty storefronts, tired cafes and boarded-up gas stations have long identified many small towns in the rural West.

“These are places that are struggling to hold onto residents,” Lawson said. “They’re dealing with population loss and people moving away.”

The report found that since the Great Recession rural and semi-rural Western counties with a lot of recreation opportunities — hiking, biking, snowmobiling and skiing — have grown while rural counties without those amenities continue to shrink.

The transplants who are moving to these recreation meccas are often wealthier than those moving to counties without those opportunities.

“This validates outdoor recreation as an economic development strategy that can bring decent jobs,” Lawson said. “It can bring new residents to the community — not just tourists.”

The transformation is visible in Heber Valley, where new bakeries and restaurants are popping up and Wasatch County’s first microbrewery is planning to open this summer. But for Heber Valley and some other recreation paradises in the West, all this growth comes at a cost.

New homes are being built all over Heber, Utah, but many are too expensive for longtime residents. (Photo by Nate Hegyi/Mountain West News Bureau)

Unaffordable Housing

Heber City Police Chief Dave Booth has lived in the valley for two decades and has witnessed its recent transformation.

From his office window, he can see traffic pass by on Main Street. For every rusted Honda or muddy, ranch-style pickup truck, there’s a Porsche or a Mercedes-Benz hauling mountain bikes. Booth said the influx of wealthy residents means more expensive housing.

“Rents have just skyrocketed,” he said.

According to data from Headwaters Economics, almost half of all renters in Wasatch County are paying rent that is more than 30% of their income, which is considered unaffordable. The median listing price for a home has doubled over the past decade. As of May 2019, it hovered around $632,000, or nine times the median income of a family living in the valley.

Booth worried that wealthier transplants are pushing out Heber’s school teachers and police officers — the people who make a town a community.

“Everybody would like to have a home with a yard and a neighborhood to raise a family,” he said. “Why should it be said, ‘Hey, if you’re a cop in Heber City, you shouldn’t be able to have this.’ If that day comes, then the cops are going to have to live somewhere else. I think that’s a shame.”

Retirees Sue and Rick Nathanson said they were well aware of the housing crisis unfolding in the Heber Valley. They also acknowledged that they are somewhat to blame.

“Absolutely we are part of the problem,” Sue Nathanson said.

But it’s a problem that is pushing out more than just the valley’s school teachers and police officers. The quaint dairy farms that the Nathansons fell in love with when they first moved to the Heber Valley are quickly turning into dirt construction sites after being sold off to real estate developers.

Eventually, the Nathansons said, they too will move away.

This story was produced by the Mountain West News Bureau, a collaboration between Wyoming Public Media, Boise State Public Radio in Idaho, KUER in Salt Lake City, KUNR in Nevada, and KRCC and KUNC in Colorado.

How water access is raising home prices: The view from Colorado

GREELEY, Colorado – When Nancy and Steven Innis built their new home in Greeley, an hour northeast of Denver, they equipped it with the latest in water conservation tech.

The automatic kitchen faucet shuts off with the wave of a hand. A drip irrigation system keeps yard plants hydrated without the wasteful runoff. Hi-tech toilets save water with different settings for big and small flushes.

Nancy Innis said she had to educate herself about how valuable water is in this part of the country.

“It was a huge factor,” she said. “It’s something we were very conscientious about.”

While all those innovations may help with the monthly bill, it doesn’t do much to curb the cost of getting their water service in the first place. They had to pay the city $38,000 up front for their building permit, which included water plant, meter and sewer fees.

These days, that’s an average price tag for water service to a new home in northern Colorado.
Record-high prices of water rights in the state are driving up the costs. This year, the market price of one unit of water, which is roughly enough to supply two single-family homes each year, from the Colorado-Big Thompson Project hit $30,000, according to the Northern Colorado Water Conservancy District.

Cities and towns are gobbling up those water rights to feed their growing populations and in turn are charging tens of thousands of dollars for individual building permits to offset the expense. That cost is passed directly onto customers, according to Greeley builder Jay Jensen, the man behind the Innis’ new Greeley home.

“As the cost of water goes up, the cost of a house goes up,” he said. “That’s the bottom line.”
When Jensen first started building homes in Greeley in the 1980s, the cost of tapping into the water supply hovered around $7,000, he said. As the cost has grown over time, he’s seen it become more of a barrier to building a new home.

“(Customers) all think, ‘Oh we’ll spend, you know, $200,000 on a house,’” he said. “Well, you’re more than likely going spend $40,000 to $60,000 before you even start building.”

After realizing that, he said, some potential customers walk away.

Not just new homes

The higher cost of water for new homes has a ripple effect throughout the housing market.
Imagine a city street. On one side, there’s a house that was built 10 years ago. On the other, a new home.

In this scenario, the old home’s water tap cost $17,000. The new home’s, $32,000.

According to Bob Sutton, a long-time realtor in Fort Collins, the new home’s pricier water tap drives up the value of the older home by the same amount of money. That’s because the value of the water tap changes as the market rate changes, he said.

“What happens is you have a new home development come in and those homes are priced at $500,000,” he said. “The existing or resale homes around that are going to be reflective of that in some way.”

While the average home costs vary, prices are creeping up in nearly every northern Colorado community. In May, the median sales prices in Fort Collins, 90 minutes north of Denver, hit $420,000, according to industry database Information and Real Estate Services.

A number of factors are contributing to that trend, according to Sutton, such as new tariffs on construction materials, land values — and water prices.

“Fort Collins continues to grow (and) we have the same amount of water we’ve had for many, many years,” he said. “And, so, it’s just a simple supply and demand.”

‘It’s getting harder and harder to find water rights’

Cities and towns know how difficult it is to compete for water rights and they don’t want it to scare off potential developers. Northern Colorado’s population is set to double in the coming decades and the region needs new homes to keep up.

So communities are looking for ways to make building easier.

The Town of Windsor, Colorado, has recently changed its policy to give builders a break. The town will allow developers to pay up to half of their raw water requirements in the form of cash and the city will take care of finding the water rights. That way, the developers don’t have to compete on the open market.

Dennis Wagner, head of engineering for the town’s public works department, said it’s proven to be a very popular option.

“A lot of developers are doing that, because, first of all, it’s getting harder and harder to find water rights,” he said. “So, any time they can pay cash instead of going out and finding it on their own, they will do that.”

Greeley is also considering a full cash-in-lieu of water policy. If put in place, it would allow builders to hand cash over to the city instead of actual water rights, taking the burden of competing on the open market off the developers’ shoulders.

Currently, the city requires new residential development to dedicate three acre-feet of water to the city for each acre of proposed development. Most builders must bring those water rights to the table when looking to build, with some exceptions for smaller projects.

A survey commissioned by the city in 2015 (done every five years) looked at the policies held by the 21 fastest growing communities in northern Colorado. It found a wide variety of approaches to developer-city relationships, from cash-only to water-only.

It also listed the average cost of bringing water service to a new home in each community.

Greeley builder Jay Jensen agrees that cash-in-lieu policies make things easier on the building process. But in his opinion, that doesn’t help with the rising cost of the water itself.

“More people using a finite resource means more people wanting the same thing,” he said.