Todd Anderson knows there are challenges facing the local homebuilding industry. But the incoming 2019 president of the Housing & Building Association also knows that, from Banning-Lewis Ranch to Careers in Construction, the region is rife with opportunity.
Anderson was born in Wisconsin, where he earned his degree in construction management. He moved to Indianapolis for what he thought would be a couple years, and, after growing a startup from a few hundred home builds a year to a couple thousand, he left Indiana following nearly two decades.
Anderson spoke with the Business Journal this week about the Pikes Peak region’s future workforce and its affordable housing dilemma.
Talk about your upcoming role as president of the HBA.
I tell people I’m a professional meeting-attender. We do an executive meeting once a month, a board meeting once a month. We’ve got a roundtable meeting with a bunch of folks downtown once a month. There’s a super secret meeting that happens once a month. There’s the public policy council that meets once a month.
The biggest thing right now is this Careers in Construction. That keeps me up at night thinking. George Hess is the initial founder of the whole idea — how do we get shop class back in high schools?
Where we’ve gone with that is we’re planning on building a 1,200-square-foot house at the MiLL [Industrial Learning Academy]. A year ago there wasn’t a whole lot of equipment there and now companies from all over the world have donated these $100,000, $200,000 pieces of machinery that I never used in shop class. And I had shop class from junior high through high school. That’s what got me in this industry — I built stuff. I think, about 20 years ago, that all got gutted and then it got a second cut during the downturn of 2008, ’09.
…Right now we have 500 kids from 10 different schools and we think it will be over 1,000 [participants] in a couple years.
We’ve heard for years in the industry we have a labor shortage. You see it in the news all the time. ‘We can’t build homes because we don’t have labor.’ But what are we doing to actually get the laborers trained? The best way is for them to build something. We partnered with the local high school shop class in Indiana and they built one to two houses a year. That’s how the program became sustainable — they would sell it and the money would go back to pay for next year’s stuff. That’s kind of how we’re setting this model up. … Our goal in 2019 is to actually build these 1,200-square-foot homes in the parking lots of up to four schools. We’ll start two in January and two in either spring or fall. We’re going to do one at the MiLL and the other will be at James Irwin Charter School. They’re ready to go. … The plan is to auction it off to a teacher or staff member of that school so they can get an affordable house. … We just last week sent in all of our paperwork for Careers in Construction Colorado to be a 501(c)3 because we have a verbal commitment from … dozens of national suppliers to provide all the materials for this stuff.
What else is the HBA involved in?
We’re a trade organization. Our goal is to partner with our more than 500 members and — at the center of the whole thing is to deliver safe and attainable housing.
Part of that is, ‘How do we enhance our membership value?’
A small custom homebuilder who builds two houses a year may have different needs from a Classic Homes, which is one of the biggest builders here, which may be very different from a landscaping firm. All three are members. So we have a lot of direct contact both at the board level and through different committees.
The interesting thing is, as small as Colorado Springs is compared to the major markets around the country, our homebuilding association here is probably one of the better run in the country. It’s very effective and politically connected and connected with a lot of businesses outside the homebuilding industry that allows us to have a pretty good reach as far as influence on policy.
I don’t have time, if I’m just doing homebuilding, to know what’s coming down the pike in terms of public policies and code changes, yet some are super important. Like this thing that happened last year where [there was a proposed ballot measure] to limit [building] permits to 1 percent of the households. That’s a bad, bad deal and would drive the cost of housing through the roof. We got on that very early and squashed it before it became a ballot measure.
… Our public policy council is very effective at staying on the front edge of what’s coming down in terms of new policies that could hurt our industry and the affordability of housing.
What’s the status of the county’s housing supply?
From the demand side the economists are saying we’re 26,000 homes short. I don’t know if that’s the right number or not. Right now we build 3,000, 4,000 a year as a stabilized volume here. During the buildup to the downturn we were around 6,000, so we were overbuilding. In 2008, we were like 1,000 [homes a year]. That 80 percent contraction killed everybody and all these people exited this industry and Colorado, in a lot of cases. Trying to get them back here is very difficult.
What are some other challenges in this region?
Prior to me moving to Indianapolis, they did something called Unigov back in the ’70s, I think, is when it was conceived. It was where the entire county, Marion County, became the city of Indianapolis. A lot of federal tax dollars came into the city and they were able to turn ‘Nap Town’ into a thriving metropolis. They hosted the Pan Am Games in ’87. I saw firsthand what that could do for a city.
As I came here, I thought, ‘Boy, I don’t know if this is in the city or the county,’ because you have all these pockets of county ground. If you talk to the county people, they think their processes and procedures are better than the city and if you talk to the city people, they think they’re better than the county.
It seems to me there’s a lot of duplication of effort. … I don’t know if this would ever happen in my lifetime or if it would ever happen, but why can’t you do a Unigov here where El Paso County, which is a large county, becomes the city of Colorado Springs? … I think there’s a huge need for Colorado Springs and El Paso County to work together on things. Utilities is one piece of that, right?
Why wouldn’t Colorado Springs, with all this excess capacity, provide service to these outlying areas that actually really need water? Banning-Lewis is just a part of that. There is land outside of Banning-Lewis that can’t do the next filing because they don’t have water even though water is available.
What’s happening around affordable housing?
Many of us [in construction] have a heart for affordable or attainable housing. The best way to do that is density and the easiest way to do that is condos. You don’t see, over the last few years, a lot of condo permits being pulled because of the housing defect laws. … We’ve made inroads the last couple years with some legislation around construction defect laws. Governor [John] Hickenlooper was pretty good because he’s developed condos in the past and was sued. I’ve had conversations with him about how bad it is right now.
It’s pretty disheartening as a builder or developer when you’re trying to deliver affordable housing, but you know the chances are, the minute you finish that project, you’re going to get sued. …
I’ve been on several committees with [Colorado Springs City Council] members. We had three different public forums and brought in people from other parts of the country who are doing things about [affordable housing]. …
Unfortunately, I don’t think there’s a lot of progress being made. I don’t think there’s receptivity on the part of, certainly Colorado Springs Utilities, which had a seat at the table. Their suggestion was we do a fee-deferment program for tap fees. That doesn’t work in the economics of homebuilding where you do job-cost accounting. When you build a house, you put all those fees in the house. When you close on the house, you pay all those fees. If I’m still having to pay over the next five years, it’s a negative incentive because I have this liability on my books.
If you’re building one house maybe it’s a lessened blow, and I hate to keep going back to Indianapolis, but our tap fees, I think, in the ’80s and ’90s, were $175. It was outlandish that in Hamilton County, the next growth area, they were $2,400. Then I moved here and the tap fees are $15,000 in the city. I live in Monument and they’re $30,000 or $35,000 up there. The median household income up there can afford the high tap fees. But it’s the same in Fountain. … If I’m a serviceman or woman and I have a housing allowance that’s say, $1,500 a month and a tap fee that’s $32,000 and the lot that is $68,000 — I’m $100,000 in before I put a shovel in the ground. Fountain is going to be tricky on the affordable housing thing. Builders don’t want to [build there] because it’s too expensive. [That market will] probably shrivel up in the next couple years.