WTF?

Not “Welcome To Fruita” – The Other One

To whom it may concern,

I have received notice of intention of a 10% increase in rent for my living space. Please consider this a request/suggestion that any increase is both unwarranted and ill-conceived. 

I can speak to my own situation yet due to the nature and feudal structure of this project and the corresponding burdens placed on the residents – if we want a home – it is a safe assumption that the individuals and families that call this home are not anticipating a 10% net increase in income in the coming months or years for that matter.  Additionally, should such good fortune fall upon any of us, the presumption is that the landlord gets 1st claim to our earned money in exchange for nothing, i.e., negative added value.  

It is blatantly obvious to even an untrained eye that this project is poorly ‘value’-designed, poorly ‘value’-engineered, poorly ‘value’-constructed, poorly ‘value’-plotted and exceptionally incongruous with the larger community and local culture. These structure are designed for easy demolition, which is the history of similarly conceived ‘housing’ in the resort towns (+/- 20 years to functional obsolescence).  The project has burned through 4(?) – 5(?) maintenance people in 9 months, all of whom were performing essentially punch list completion of the project which remains unfinished. There has also been tenant turnover already in a spanking new buildings – and damage by same.  Deterioration of infrastructure is already underway. 

Again, there is no credible case to be made that tenants must subsidize dark investors evading taxes. 

This request/suggestion is offered with resolve. If it reads rough, my intention is clarity of the circumstances and lack of credibility supporting any increase by the landlords. 

Thank you for your attention and I look forward to your response (although not really because meaningful response is not the practice here). 

Please do not raise mine – nor others – rents. 

Sincerely,

Tom Gorman

Unit A 

PS  Included the City of Fruita as FWIW information only as there is no expectation of their interest.  

Views on Mews

Introduction

My name is Tom Gorman and I have personal and professional life that speaks to the Fruita Mews specifically, and in the larger context, some distinctions among terms such as: “housing”, “home”, “neighborhood”.

The majority of my adult working life was in a Colorado brand-named resort town. My experience included time on the Eagle County Affordable Housing Committee as representative of an employer which also included Directors of municipal and county housing programs and reps from the lending, real estate sales, mortgage industries.

What follows are personal perspectives/observations based on posted Meeting Minutes of Fruita Town Council and the Fruita Housing Authority, which are one and the same by self-declaration; also according to documents of record on the Community Development page as of 09/04/23.

Key points:

Fruita Mews is a financial instrument. The developer’s professed expertise and practice is as a broker of financial instruments.

The “Housing” designation is the abstract of Fruita Mews. The physical manifestation of constructing homes for people is not the purpose – it could be a car wash if car washes offered tax avoidance.

There will be additional value-added-to-investors tax advantages as the project loses money. There won’t be any capital calls from invisible investors so losses will be covered by the City.

The custom-and-practice resource, where the detail of every development is posted on the City’s Community Development link, is void of meaningful information.

Construction has begun: on what? The only legally binding documentation is Plat recording of the site. What is to be constructed versus what has been represented or hinted is substantial and starkly contrary to stated purpose of homes. The typical renderings, designs, infrastructure, and landscaping details are not there. No approved plans of any sort.

The above demands explanation.

To facilitate this project, the City Council additionally down-zoned 7.62a parcel of land of previously re-zoned from Ag-to-residential.

The down-zoning allowed 7-8 Dwelling units per acre, increasing density to some 50+ Dwelling units. Mews is represented as fulfilling this.

This is not at all what is being constructed. The Plat indicates the building footprints. The buildings – the 50 ‘Dwelling units’ are bunched onto less than 1 acre – .85 – making the down-zoning effect, build-out density, that of a ghetto, or “Pocket Neighborhood”.

There is no reference to residents or residences. All conversation centers on access to capital to build it, including substantial contributions by the City.

There are no drawings of size, layout, construction or finish materials of the homes. Nothing.

The marketing notes the residences are for working people. There is no bus stop referenced, in fact, no reference to any interaction with the all- ready stressed Grand Valley Transit.

Original down-zoning eliminated an entrance to the ‘Pocket Neighborhood” – from 2 to 1.

No existing street.

References made before Council to ‘partnerships’ with D-51 and the medical center. Representatives from both entities attended a meeting and voiced support for Fruita to go with this. There is no evidence of partnership agreement with either.

Design, Construction, Buildout

The General Contractor (GC) is from elsewhere and a number of $23M is applied to the project, again, no idea of what is to be built. The GC boasts of international projects for our government. It will look like government housing on military bases and remote sites.

Developer states that “value engineering” will be exercised to use local trade sub-contractors. “Value Engineering” to a tradesman = getting squeezed by the GC, in turn squeezing local suppliers and labor.

GC’s with government contracts don’t lose money – ever. They know the cost of doing business wherever they are and all but dictate bids to ensure it. This is just how it works.

Developer verbally notes that the facade will be reminiscent of western Colorado ghettos of the past therefore will blend.

Scenarios to Consider

15 years on:

The other 6.5 acres: get sub-divided, offered to City which can’t afford; gets developed into market-rate homes.

1st right. Need to see/hear/read the analysis to this decision. What would compel the City to buy property 15 years hence?

Process

Extraordinary haste. There is no “time is of the essence” factor to Fruita. All accommodations, all negotiations, all ante-up to date, again based on the limited information available, have been made to benefit investors whose only need is financial gain.

Fruita Housing Authority

The matter of addressing homes for people is too large to be governed by the same body as the City. Meeting minutes reflect critical questions from some Council members that got deflected/dismissed and no substantive questions from others. Combined with decisions being made in “Executive Session” seclusion, a reasonable observer concludes too many secrets that ultimately bind Fruita to this and future development.

The City and citizens of Fruita can do better.

AFFORDABLE HOSING

The Colorado Legislature, in its recently concluded session, passed and the Governor signed into law HB 21-1134, short-titled ”Rent Reporting For Credit Pilot Program Act.” [here]

It begins with listing credible but isolated from context findings, whether taken individually or in total, fail to make the case for the Pilot Program (PP), much less state underwriting. There are caveats of substance, e.g., [here] and [here], and for the academics, [here], about anecdotal declarations of the law, such as, ”home ownership” as part of a “wealth building” strategy, enough to render this Pilot Program as investment advice (to low-income populations), therefore, subject to DORA (Department of Regulatory Agencies) oversight.

Then there is this

The law declares:

  • ”…home ownership is currently the largest single source of wealth building…”
  • ”Among Black and Latino households, the most common reason for denial [of mortgage loans nationally] was debt-to-income ratios”
  • ”The second most common reason was credit history.”
  • ”Communities of color find it difficult to gain access to credit, especially when it comes to mortgages;” ,
  • ”…the rental payment is often their single largest…contractual obligation;”
  • “Reporting rental payments…even[s] the playing field and enables communities of color, lower-income households, and … rural communities to generate and build credit without taking on additional debt;”
  • ”Therefore, the general assembly declares that it is in the best interests of the state to create a Pilot Program whereby participant tenants may elect to have…rent payment information reported to consumer reporting agencies…”

The law imposes restrictions and regulations on tenants:

  • ”’Participating Tenant’ means a tenant that has elected to participate…and satisfied requirements…and whose landlord is a participating landlord.”
  • ”A tenant may participate…only if the tenant agrees to participate and completes a Financial Education Course”.

There are checks to entry for landlords: ”To the extent practicable, the contractor shall recruit participant landlords who offer:”

  • “a variety of dwelling units…of various sizes”;
  • ”located in diverse areas of the state; and”
  • ”at least five dwelling units for rent”

The law specifies that the field-tested PP be delivered in 2 years to the 2024 General Assembly, followed by an additional 1 year posting for public consumption and then probable enactment, i.e., three (3) years from now.

The law authorizes $205,000 of state funds distributed [thusly].

Spoiler Alert

This is an appeal to Governor Polis to:

  1. To suspend or rescind the transfer of $205,000 granted to develop a Pilot Program (PP) that, as detailed in the legislation, duplicates multiple, readily-accessible platforms, applications and informational resources currently producing the desired outcome;
  2. To reallocate the $205,000 to the Colorado Department of Public Safety, Division of Fire Protection and Control, for funding toward Mutual Aid and Large Fire Funding Recommendations, per the 2020 Colorado Fire Commission Annual Report.

There are no preconditions for a person to choose to report their financial information nor are there barriers to do so. Any person, at their discretion and convenience, can self-enroll to report to Consumer Reporting Agencies, for [example].  Articles like [this] and [this] document the prevalence of applications of the concept, the latter referencing more sources; it can be done on a [phone].

No one needs permission from a landlord to enroll themselves. Note that not one of these platforms, sites, or agencies demand additional ”Financial Education” to manage one’s own affairs; in fact, each offers thorough explanations, FAQs, and help resources. The credit-report giant Experian, which appears to be the most engaged with this, has a dedicated, comprehensive [site] to the practice making the Colorado-mandated 3rd party administration redundant.

All the platforms and services within the domain of credit-building-via-rent do the same thing. Distinctions among them are a matter of quality, convenience and price(all reasonable). They all face the same challenge of enrolling landlords which is no obstacle to tenants’ independent action.

This Colorado-funded Pilot Program, 3 years from deployment, offers no innovation to its declared purpose or, critically, leverage state funds in any meaningful way. Tenant-initiated, tenant-authorized credit agency reporting, the Pilot’s defining end product, is established practice and less complicated. In light of the above, a reasonable person thinks: WTF? (not Welcome To Fruita – the other one.)

Credit Invisible

The concept of rent reporting is targeted to affect a definable cohort of working people with stable incomes. It recognizes that their incomes net less than a minimum to provide a basic standard of living, even as adjusted to where they live, i.e., low-income. This demographic are the primary consumers of payday lending – high-interest, immediate cash between paydays. Payday lenders are not in the mainstream of finance, ergo, their regular customers are ”Credit Invisible”.

Recall the Strawman in Oz (not Opportunity Zones – the other one). It took but a diploma to generate deep thoughts. The wizardry here is that the key to wealth is an algorithm – a credit score – discounting the notion of a living wage and the financial breathing room it provides.

Remember that the higher levels of ‘wealth’ of mortgage holders/home owners includes the home. In our society, home equity fuels revolving credit, an ATM, and ”Credit Invisible”people are unexploited assets. The most valuable outcome of this PP is a database of people, cast(e) as low-income, who can be absorbed into a condition of permanent debt, collateralized by the fruit of their labor – their paycheck, and their home, creating a cheap, indentured and immobile workforce manufacturing exceptional customer service. It is a devil’s covenant, a 21st century twist on feudal society with Nobility replaced by legally-unregulated financial ‘services’ entities operating exclusive of and unencumbered by any principles of banking, and whose sole reason for existence is ROI. HB 21-1134 grants it legitimacy and protection.

$150,000 Compensation To Landlord, LLP.(?)

During a hike below the Monument last year, a solid column of smoke was visible to the northeast. Ninety minutes later it was a curtain, eventually birthing into a name, Pine Ridge. A distinct challenge in a state with populations, consequently resources, unevenly dispersed over its land mass is coordination and logistics. Compare the Colorado Fire Commission assessment of conditions and [needs] with the work product of HB 21-1134 above. Then reallocate $205K to where every Colorado dollar sustains a coherent purpose.