“How much flexibility do we want to build into this”
As the finishing touches are put on the first duplex in the Homestead affordable housing development in Mt. Crested Butte, the town is considering making several changes to the deed restrictions for Homestead that will allow a greater range of qualified buyers in today’s marketplace.
Deed restrictions outline the qualifications needed to buy or rent a unit in Homestead and limit the selling characteristics of a property to promote long-term affordability.
According to Mt. Crested Butte town manager Joe Fitzpatrick the town’s units in Homestead have not been offered for sale on the open market yet, and the town has intended to re-visit the deed restrictions originally proposed for the project to make sure they fit the needs of the town and the community housing market.
During a town council meeting on July 1 Mt. Crested Butte community development coordinator Hunter Dale said town staff had examined the recent market for qualified individuals and had several suggestions for the deed restrictions.
The Homestead project is planned for the entryway to the Prospect subdivision on the north side of town. A joint project between the town of Mt. Crested Butte and Crested Butte Mountain Resort (CBMR), Homestead is currently planned to hold 37 units, as a mix of duplexes, triplexes, and single-family homes. Mt. Crested Butte is building 16 of the units, and CBMR is building 21 units.
Mt. Crested Butte is finishing up its first duplex this summer. CBMR’s first unit will begin construction in the next few weeks, according to CBMR planning director John Sale.
Mt. Crested Butte community development coordinator Hunter Dale said the first proposed change would remove a one year residency restriction for rentals, allowing the town or CBMR to rent Homestead units to an individual that earns the majority of their income in Gunnison County and who will occupy the unit for at least nine months out of the year.
Another change would allow a Mt. Crested Butte business owner, but not necessarily a resident, to own and rent out an affordable unit in Homestead. The renters would be required to meet specific qualifications set in the deed restriction.
One of the more debated changes was the proposal to increase the amount of monthly income a qualified buyer is allowed to spend on housing.
As written the deed restrictions only allow buyers who would spend 30 percent or less of their monthly income on housing, including mortgages, insurance and homeowners association dues. The county housing authority suggested increasing the amount to 35 percent, but Dale said town staff felt the restriction could be removed entirely.
“That’s really the financial institutions’ call,” he said.
Town attorney Rod Landwehr advised against removing the restriction. He said if a Homestead unit owner is unable to make the payments and the property is foreclosed, the deed restrictions for that particular unit would become void. However, the town would have the option to buy back the unit before foreclosure, keeping the deed restrictions. “If we are increasing the odds of failure on the part of the buyer to repay the loan, I think we’re jeopardizing the continued affordability of the units under this deed restriction,” Landwehr said.
Gunnison County Housing Authority director Denise Wise agreed. Wise said limiting housing expenses to 35 percent of a person’s monthly income was a nationwide standard for affordable housing. “I do believe it is a slippery slope when we start giving the bank the latitude,” Wise said.
Council member Gary Keiser said the town should keep the restriction, but increase it to 35 percent.
Another proposed change might allow a single person to buy a two-bedroom unit, or a couple to buy a three-bedroom unit.
“They say they’ll have kids down the road, or they want it for their mother in law to stay in or for visitors. It’s really how much flexibility do we want to build into this,” Sale said. The Town Council seemed willing to accept this change and agreed to discuss it further.
Wise also made several suggestions including redefining how the initial sales price is set, and making it the responsibility of the Homestead home owners association to set future sales prices, rather than the unit owner.
After giving a few directions to staff, the council agreed to discuss the proposed changes and potentially approve the deed restrictions during their August 5 regular meeting.