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Berthoud turning to small-scale homes for more affordable housing

Could small homes be the future of housing on the Front Range?
Small homes: The future of housing on the Front Range?
Posted at 12:00 PM, Feb 03, 2022
and last updated 2022-02-03 14:00:23-05

BERTHOUD, Colo. — There are several words that can be used to describe the housing market on the Front Range. "Competitive" is a nice one.

For some, buying a home in Colorado means downsizing and looking beyond the Denver metro area.

PrairieStar in Berthoud is a community with over 600 homes that focuses on "efficiency, affordability and sustainability." One of the developers of the project, Scott Sarbaugh, says their model is housing built affordable.

“As a developer, what some of the municipalities can do is start encouraging small-scale homes," Sarbaugh said. “You can do small-scale housing that will allow seven or eight houses within the same infrastructure cost. That's how you can get housing that's affordable for market rate housing.”

Sarbaugh said the houses in PrairieStar fly off the market about as quickly as they can build them. He said challenges facing developers include water, material costs and labor. In addition, Sarbaugh said relationships with municipalities are critical to such projects.

“The ability to go ahead and not be penalized for increasing the density of a block," said Scarbaugh, referencing actions the Town of Berthoud took to make PrairieStar possible. “The ability to have modifications in zoning codes that allow housing to be built on open spaces.”

According to Sarbaugh, when developers have to include deed-restricted housing or inclusionary zoning provisions in a new development, the subsidized cost of the affordable units get added into the price of the remaining market rate housing.

"When market rate pricing goes up because of including mandated affordable units, the entire area of homes increases, thus making it harder to obtain market rate affordability," Sarbaugh said. "At PrairieStar, we provide scaled housing sizes to provide smaller, more efficient 'built affordable' housing. The municipalities need to allow the increased density, without penalty or unit reductions, to a developer to be able to provide builders an opportunity to build scaled size housing that sells at affordable prices, with the builder still able to make a profit."

Marcia Hale lives in the PrairieStar community after moving from the East Coast. She said she loves living in the development but was shocked by the housing market in Colorado.

“I downsized, which is good. But I had to pay quite a bit more. So, that kind of surprised me. And that was in the end of 2019," Hale said.

Sarbaugh hopes their model at PrairieStar is the future of housing on the Front Range. In the wake of the Marshall Fire, he said there could be even more of a strain on the market.

“Can it really get tougher? We'll see, won't we? I hope not," Sarbaugh said. "But the reality is you take 1,000 homes out of the marketplace. The supply and demand is so out of balance, and we just increased the demand and limited supply."