Asking any area employer how the summer went is to hear a litany of woes. Yes, the cash registers rang, but the challenge of finding an affordable place to live thwarted many business owners and managers’ ability to retain workers. Insufficient staffing, decreased hours of operations and a reduction in services impacted a range of businesses spanning the for-profit, nonprofit and events sector of the area economy.
Cathie Seward is the assistant general manager for the New Sheridan properties, which include the hotel, the Parlor Bar and the Chop House dining areas and the Phoenix Bean. In all, the hotel-dining business employs 110-115 workers, from housekeepers, kitchen staff, servers and hotel-related workers.
“As far as retaining staff, this was our worst summer,” Seward said. “Our classified ad ran in the paper from March until now. We’ve been unable to fill all our positions.”
The reason, she said, is housing, or a lack thereof.
“The lack of affordable rentals is a creating a situation where mountain towns are not attracting a workforce,” she said.
The New Sheridan’s situation is nearly universal in the area. According to a recently released report compiled by the Trust for Community Housing, despite encouraging gains in the affordable housing pool, “About 59 percent of employers reported that the lack of affordable housing for their employees is a critical or serious problem for their business.”
The exhaustive report presented a few surprises to TCH Executive Director, Amy Levek.
“There were several surprises. For instance, when you look at how many locally occupied units there are, the number region-wide has dropped from about 50 percent to 44 percent,” Levek said. “If local governments, the school district and Telluride Ski & Golf had not built deed-restricted housing, that number would be 34 percent. Our housing programs, no surprise, have maintained a critical part of our community.”
While those efforts are notable, the shortfall still creates impacts that took even Levek — who has been deeply immersed in housing issues for many years — by surprise.
“I was startled to learn how much it costs local businesses to recruit employees,” she said. “Those who replied to the employer survey reported an average cost of $5,200 to replace an employee, which is low compared to national studies. Last year, local employers reported that 17 percent (833 people) left their jobs dues to housing problems. So it cost a very conservative $4.3 million to replace employees who leave, not to mention the cost of bringing new employees up to speed. What else could businesses being doing with that money to strengthen their businesses? Probably a lot.”
Both the New Sheridan’s Seward and Ghost Town Coffee Shop’s owner Elena Levin, said that staff shortages have impacted employees with secure housing who are pressed into extra shifts in order to cover schedules.
“Our executive chef is working seven nights a week,” Seward said. “He’s not able to keep a healthy work-life balance.”
Levin, in order to compensate for staff shortages at Ghost Town, said she’s been the one to fill the gaps.
“I’m not in a good place because I’ve done nothing but work this summer,” she said. “We’re working too much. We’re not resting and recharging.”
She said it has affected the level of service she has been able to provide customers. By having either inexperienced or burned-out workers, service has suffered.
“We ‘re not putting out a great product,” Levin said.
The TCH report supports employer concerns.
“With 7 percent of jobs unfilled and frequent turnover, at least one-half of employers have needed employees to cover multiple positions or have had to work extra hours themselves,” the report reads. “About 40 percent have had frustrated employees and increased turnover and 30 percent have been unable to grow and/or have retained unskilled employees in positions due to lack of options.”
Employee turnover is also linked to commuting. Many workers, unable to find and/or afford housing closer to where they work, have resorted to finding housing in outlying communities such as Rico, Norwood and as far away as Montrose or Cortez. The report revealed that about 11 percent of commuting employees (200 total) found jobs closer to home last year.
Rico resident Scott Poston knows exactly how much is costs for him to commute. He has found it makes more sense to find work in Rico.
“One reason I try to work in Rico is the cost of the commute,” he said. “If one pays themselves for the time of the commute at $10 per hour, and you add in the gas, the commute to Telluride from Rico, which is fairly close, comes with a cost of approximately $400 a month. So a job in Telluride has to pay approximately $5,000 more per year to break even on the commute. And that’s not counting the depreciating wear and tear on the car itself.”
The area’s numerous nonprofits are also feeling the crunch. Like their for-profit counterparts, they face difficulty finding not only paid staff, but also the lifeblood of any nonprofit, volunteers.
The Telluride Historical Museum’s Theresa Koenigsknecht serves as the Director of Programs and Exhibits. She has an assistant in the budget but said she has spent an inordinate amount of time rehiring and retraining help.
“For the last three years, we’ve had to rehire someone every nine months,” Koenigsknecht said. “Being a nonprofit with a small staff, that’s difficult. It’s stressful on staff to be constantly retraining.”
Her current assistant, she said, has been able to find housing (“Generous neighbors.”) since being hired earlier this year, but “It’s month-to-month. It’s not a permanent solution. It makes planning ahead very difficult.”
Festival organizers are not immune from the challenges facing businesses. Erin Ries is the director of the Fire Festival. She lost one of her key festival staffers when his job in the lodging industry was eliminated. He was subsequently forced to leave town when he couldn’t find suitable employment. He’s valuable enough to the festival that she is flying him back, but it’s an impactful expense for her small festival.
“As an event planner, we struggle hugely with getting people, because they can’t live here,” she said. “It’s really awful.”
Again, the TCH report supports Ries and others’ concerns.
“Volunteer participation in the Telluride area drops off significantly among households residing outside of the area,” the report states. “Residents of the Telluride area conduct 60 percent of their religious, charitable, civic or volunteer activities locally. Only 14 percent of such activities are conducted in the Telluride area by residents in the rest of San Miguel County and less than 3 percent by residents in neighboring Ouray and Montrose counties.”
Organizations that rely on volunteers — 9 percent of employers, primarily nonprofits — reported having difficulty filling positions.
“Problems are equated largely to the high cost of living, need for multiple job-holding and less free time, high competition for local volunteers, and a decreasing pool of local residents,” according to the report.
A Telski employee is also frustrated. Being short-staffed has resulted in not only employee stress, but decreased hours of operation, according to Aidan Gibbons, who works for lift operations with the resort.
“I've been a lifty here for about five winters and every year we are more and more short staffed because of housing,” he said. “We really felt the squeeze last year with the winter we had and the amount of work on us from all the snow.
“It's really sad what is happening to Telluride and a lot of places around the states. ... Being a lifty may seem like an easy job but it's really not. People take us for granted and the housing situation just adds to the stress.”
The TCH report included comments from employers. Their statements and concerns are sometimes grave.
“I was very lucky with my housing opportunities in Telluride,” an anonymous respondent said. “I know many managers are at their wit’s end with no housing opportunities for their employees. Please make moves as this problem could be the cause of severe collapse.”
Businesses, to varying degrees, have tried to help their workers, sometimes by offering higher wages. In some cases they can provide worker housing, but it comes at great expense to the employer. The New Sheridan’s Seward said they are gradually converting the Roma suites the company owns (adjacent to the Coffee Cowboy patio) into employee housing, but they’re not kicking out current tenants. And as each apartment is vacated, it gets a complete makeover as the units are old and “need love. But we’re working toward getting people in.” said Seward.
Other solutions to aid businesses with housing that TCH officials are working on include the Housing Opportunity Fund, which is a grant program to help people get into housing, both for ownership and rental opportunities. According to Levek, TCH has granted funds to six crucial employees in the area.
“We've funded one person key to festivals and others who are key to their respective business,” Levek said. “All of them play an important role in keeping their organizations going.
A new program to meet the needs of the recent Telluride housing lottery winners is called Keep The Lights One as well as a collaboration with Tellruide Venture Accelerators, Levek said.
“We’re working to convene a group of business owners and managers to explore potential solutions to their employee housing needs,” said Levek.
The employer survey, she said, showed that many businesses are keen to help explore solutions.
To view and download the full report, go to trustforcommunityhousing.org.