After several years of mountain town-living, Kellie Shaltes faced a sobering question: Could she sustain it?

Shaltes had taken around a $10,000 pay cut when she relocated from San Diego to teach at Battle Mountain High School in Eagle, even as her housing costs remained roughly the same. Well over a third of her income was going to rent, and she’d moved three times since coming to the Vail Valley in 2018, she said.

“I was on the verge of leaving the valley simply because I didn’t see myself ever being able to own a home out here,” Shaltes said. “It’s kind of terrifying. You just feel like you’re going nowhere financially.”

That all changed in July 2024, when she bought a three-bedroom, two-bathroom house in Eagle, part of a 16-home neighborhood built in a Buena Vista factory. The project was completed in a fraction of the time it takes for traditional builds, helping to deliver housing faster and cheaper.

“I feel like it hasn’t hit me yet — that I own a home, that I did it,” Shaltes said. “It’s pretty incredible. … I can stay here and teach here and retire here.”

As factory-built neighborhoods pop up in Colorado communities buckling under soaring housing costs, state lawmakers want to take the novel strategy mainstream.

Senate Bill 2, which passed the statehouse and is on its way to the governor’s desk, would establish regional building codes for factory-built, modular homes. The new regulations would supersede local and existing state codes in a bid to make production easier.

“If we’re going to solve the affordable housing crisis, we all need to work together,” said Sen. Tony Exum, D-Colorado Springs, a lead sponsor of SB 2. “Factory homes are less expensive than building from the ground up, so we’re trying to get people into their first home at a reasonable price.”

Builders say regional codes would streamline the production process for modular homes, translating to lower costs that could be passed onto the buyer. In the Colorado High Country, where median home prices climb into the millions, proponents of modular housing see it as a workaround to the short building season and limited labor force that drive up the cost of development.

Still, local governments have raised concerns with the state continuing to wade into housing decisions at the community level. Affordable housing advocates, however, see it as a necessary response to an urgent need.

‘The power of modular’

Shaltes’ home looks like nothing out of the ordinary.

A three-story structure, it features a ground-level garage and upper deck. Inside is a 1,200-square-foot living space including a moderately sized kitchen, with finished floors and door trimmings. But instead of being built on-site from the ground up, it was assembled in pieces, like a car assembly line, in a factory more than 90 miles away.

While she was initially skeptical of living in a modular building, she said it feels more like a home than any place she’d rented before.

The Adams Way neighborhood where she lives took less than a year to complete when it opened to new buyers in summer 2024. The project was led by Habitat for Humanity Vail Valley, which ordered the homes from Fading West, a Buena Vista-based production facility.

The nonprofit estimates it would have taken at least three years to build the same homes on-site. Building in a factory also kept the costs of the units down, allowing Habitat to sell the homes for well below market rate. Shaltes said she purchased her house for around $350,000, a far cry from Eagle County’s median sale price of $1.3 million last year.

“We really got to witness firsthand the power of modular,” said Emily Peyton, Habitat’s director of special projects. “What it really does is get families in houses faster and allows us to retain critical members of our workforce.”

Fading West has produced around 500 homes on the Western Slope since opening in 2021, and the factory has the ability to build houses in just seven work days, according to Chief Business Development Officer Eric Schafer.

Breaking down regulatory hurdles could make production even more efficient.

Colorado has over 300 jurisdictions, most with their own building codes. That’s in addition to state codes and the International Building Code, all of which Schafer said Fading West adheres to.

“If we’re building on one side of the street that’s a town and the other side that’s the county, they have different wind loads, snow loads,” he said. “If there were as many codes for cars as there are for building houses, (Toyota) Camrys would cost $200,000.”

To help cut costs and churn out more housing, SB 2 establishes a 20-member group within the Department of Local Affairs to develop regional codes by July 2026, taking into account local climates and geographic conditions.

The group would include officials from local building departments across the state and industry representatives such as electrical engineers, plumbers and modular developers. The bill also limits how much local governments can restrict the building of modular homes.

Elyse Howard, Habitat for Humanity Vail Valley’s director of development, said the strategy could further reduce costs for affordable housing initiatives. She gave the example of being able to place a bulk order for a modular home that fits a certain region, which could help bring down the overall price of each unit.

“I think there’s some efficiencies and economies of scale that can be created by grouping some regions of the state together,” Howard said.

‘A model for rural areas’

Some Habitat groups have turned to building their own modular facilities to pump out homes.

Habitat for Humanity Roaring Fork Valley earlier this year broke ground on a 66,000-square-foot factory in Rifle that it says will be able to create up to 200 homes a year and support over 60 jobs. It comes after a Habitat group in Boulder opened a modular facility last fall.

To support the Roaring Fork project, Rifle’s town council leased a 10-acre plot of city-owned land for just $10 a year to Habitat to build the factory. It is also planning to issue tax-exempt bonds to finance the bulk of the construction.

Rifle Mayor Sean Strode said the partnership is about finding creative answers to the region’s affordability problems.

“Everybody wants to supply their communities with affordable housing, and, thus far, no one’s found a concrete answer,” Strode said. “I think this is an opportunity to look forward and try and see if this works.”

Gail Schwartz, the nonprofit’s outgoing director, said modular production will bring affordable housing projects to fruition that otherwise wouldn’t be possible in the area.

In Aspen, for example, construction costs can be as high as $3,000 per square foot, driving up the median single-family home price in the surrounding county to $7.2 million last year. The Rifle factory will allow Habitat to sell homes for around $160 per square foot, which could lead to units priced between $250,000 and $375,000, according to Schwartz.

“This is a model for rural areas,” she said.

The nonprofit hopes to start selling homes by spring next year, with units going not just to the Roaring Fork Valley but to communities across the Western Slope. Part of being able to do so may hinge on SB 2’s ability to make the process more efficient.

Rather than talking to “five different counties and a whole host of jurisdictions,” each with its own building rules, Schwartz said a regional approach means “you’re not in this position where you need to tailor each unit to a different code.”

Local governments, however, largely remain uneasy about the state’s influence over decisions traditionally made at the community level.

Push and pull between local and state control

While Strode thinks SB 2’s intentions are good, he said it would be a “remarkable challenge” to find a building code that could work for wide swaths of the mountains.

“Any time you start generalizing Western Colorado communities, I find it problematic,” he said. “I think that sometimes in the Capitol, western Colorado kind of gets lumped into one bucket.”

The bill does not specify how the state would be divided into regions or how many there would be, with those decisions being left to the 20-member task force to work out.

The Colorado Municipal League, which represents 271 cities and towns, has pushed to make SB 2 more palpable to local governments by ensuring regional codes consider factors like wind shear, snow loads, and wildfire risk.

Still, the group raised issues with the legislation overall, seeing it as an erosion of local control. Concerns also linger that the task force writing the codes will include members whose industries are poised to directly benefit as a result.

“When you take code development out of the hands of local government, there is a concern that those codes will not be responsive to the needs of that community,” said Bev Stables, the group’s legislative and policy advocate.

The issue is a microcosm of the debate around how involved the state should be when it comes to housing.

The fight came to a head two years ago, when groups like the municipal league and local government leaders lambasted a bill championed by Gov. Jared Polis that would have dramatically overhauled local zoning rules by effectively banning municipalities from limiting the development of high-density housing.

While that bill ultimately failed to advance to Polis’ desk, a renewed effort last legislative session did become law after seeing several major concessions, including a carveout for the entire mountain region.

Stables said she wants the state to be more of a partner when it comes to advancing housing goals rather than implementing top-down approaches.

“I think it’s really unfortunate that local government work, in terms of zoning and permitting and codes, are being categorized as ‘red tape,'” she said. “It’s not arbitrary. It’s deliberative and really intentional in response to the unique needs of our members’ communities.”

‘Incumbent on all of us to step up’

Not all local government leaders are opposed to the idea of streamlining building codes. In communities where modular development has already been adopted, some think SB 2 would make the process smoother.

In Breckenridge, for example, the town recently teamed up with Summit County officials to develop a 52-unit rental complex crafted entirely from modular units. The income-based apartments, which opened last summer, were built by Fading West, the same factory that created Adams Way in Eagle.

Summit County Commissioner Tamara Pogue said the endeavor, while successful in delivering housing faster, “was cumbersome at best” because of the layers of state and local codes that the factory had to adhere to.

“For a community like Summit, where we are the developer and are using taxpayer dollars to pay for the building, we want to be as efficient as possible,” Pogue said, adding that the problem SB 2 is seeking to solve is a legitimate one.

She added that, unlike more contentious measures to overhaul local land-use authority, the bill has no bearing on those decisions.

She said the inclusion of local building department personnel on the task force is an important step to ensuring they get the new codes right, but acknowledged it will be a tall order.

“There is a nuance here that is important to recognize,” she said. “It’s not going to be easy to find codes that work across very disparate regions.”

Schafer, from Fading West, said the regional codes would apply to the interior of the home but still give local governments purview over site work, such as a home’s foundation, and auxiliary elements like decks.

“We’re not taking decisions away from counties or municipalities. Rather, we’re trying to help solve the (housing) crisis,” he said.

Schwartz, the outgoing Habitat for Humanity Roaring Fork Valley director, put it more bluntly.

“The governments aren’t solving the housing crisis,” Schwartz said. “It’s incumbent on all of us to step up to help solve this because we have a social justice issue in our region, with multiple families (living) in a hotel room or in a mobile home. This is something that really should be unacceptable.”

Published on VailDaily.com.