by Adam Broderick
Editor’s Note: There is more to living in a resort town than the difficulty of finding a place or the long political discussion over how to provide so-called affordable housing. Reporter Adam Broderick looks at different angles of the issue in this summer series that explores deed-restricted affordable housing in resort towns like Crested Butte and Mt. Crested Butte.
Last week we heard stories from real Buttians about what it’s like to live in affordable housing in Crested Butte and Mt. Crested Butte. This week we speak with government officials and housing authorities in other resort towns, exploring what has been done to address similar local housing issues.
But first, what does “deed-restricted” mean? Deed restrictions determine who can and cannot purchase a property. The goal of deed restrictions in regard to affordable housing is to keep homes affordable for years to come by restricting the amount of value one can add to a home with improvements or remodels. When deed restrictions are upheld and work as planned, the housing market may change drastically from the time of purchase but the property value remains the same, or very close to it.
Criteria for ownership in deed-restricted homes differs from one affordable housing project to the next, but for the most part, to qualify one must make a minimum income (to guarantee payments will be made on time) but not too much, and usually most income must be earned locally. Also, one must reside locally for a certain number of years. When a deed-restricted homeowner decides to sell, only a small percentage can be made for profit.
Crested Butte town planner Michael Yerman explained that the typical deed restriction is for 3 percent of the purchase price, or the consumer price index, whichever is less. “The long-term goal is to keep housing units affordable for the future, so if you deviate from that you lose that affordability,” Yerman says. “What makes these properties attractive to homeowners is that the land is dealt at a much lower rate, making the build more affordable. In exchange for that, you agree to a three percent increase.”
For example, a home that cost $100,000 will always be worth $100,000, plus 3 percent per year, or $3,000 per year. Thirty years down the line that $100,000 home would be worth no more than $190,000. However, improvements which increase energy efficiency or create additional liveable space could be included in the home’s future price.
Other covenants imposed by homeowner associations often limit developments, like determining which styles of homes can be built and which materials can be used to construct them; proximity to the street or neighboring properties; size of buildings and additional structures; pet allowances; lot storage prohibitions; road maintenance and landscaping guidelines; and even paint colors or fencing materials.
In discussions with other communities about how their efforts to implement affordable housing for locals, it has become clear that Crested Butte is not alone in dealing with the so-called “housing crisis.” I spoke with housing authorities and elected officials in ski towns around the west—Telluride, Aspen, Jackson and Park City—and all face similar housing issues.
“It’s not just an Aspen problem. It’s a Roaring Fork Valley-wide problem,” says Mike Krosdrosky, executive director of the Aspen Pitkin County Housing Authority (APCHA). He says Aspen has faced a housing crisis as long as he can remember; the difference is that now there is more affordable housing.
Aspen has 2,166 units currently for sale or rent with deed restrictions of some sort, and another 765 affordable homes and rentals in the surrounding Pitkin County. Somewhere around 45 percent of the total workforce in Pitkin County lives in affordable housing built by the city. Twenty-one percent of those residents are at the low-to-moderate income level and 79 percent are at the moderate-to-high income level.
“The goal from the early 1990s was to house about 60 percent [of the local workforce], so we’re below that stated goal, if that’s any indication of the ongoing way of life here,” Krosdrosky says.
In 1990, the city of Aspen passed a real estate transfer tax for employee housing and Krosdrosky says that has brought in a lot of funds to build affordable housing. “It’s a 1 percent transfer tax on the purchase price of any residential real estate over $100,000 that changes hands. A percentage of that goes into a fund for housing development. Last year the city collected $8 million to $8.5 million and we’re on track to exceed that this year.”
Cindy Christensen, head of operations for APCHA, has been with the city of Aspen for 25 years and has worked on local housing issues since 1992. She says the city went to the voters to extend the 1 percent transfer tax. “The last time we asked the voters for an extension of 40 years, it was approved no problem.”
Part of the desire is to keep workers in the community. “We have workers commuting from as far as Rifle and Eagle,” Krosdrosky says. “It’s cheaper to live in those towns than in Aspen. Rifle is probably an hour and a half from Aspen. Our bus service goes that far, but during the winter you’re adding probably an hour on that.”
This summer, the APCHA is collecting data to inform an update of its affordable housing guidelines. On July 1, the organization sent a survey to all residents and is working to distribute it to 750 businesses. “The study will help us update our affordable housing guidelines by allowing us to analyze affordability, qualifications for renting or purchasing, and other best practices for the mountain community,” Krosdrosky says. “We feel we’re overdue for getting our guidelines updated so we’re collecting new data to analyze. Once we start aggregating data we can start having conversations around these issues and make decisions based on facts instead of speculations.”
Park City, Utah
According to Outside Magazine’s “Best Towns Ever” (September 2013), “The trick to being a Park City local is finding a way to stay. There’s a tricky balance between attracting wealthy tourists and second home owners without expelling the middle class.”
There are more than 325 units of deed-restricted, low-income rental housing in Park City, one of only two communities in Utah that have an affordable housing resolution. Park City’s communications and public affairs manager Phyllis Robinson says the ratio of primary to secondary homes today is 31 percent primary residents and 69 percent second homes/part-time residents. That number has fluctuated over time but it generally hovers around 35 percent primary and 65 percent second homes/part-time residents.
Robinson says the city’s population is getting older and the community is at risk of losing economic and age diversity in the community. In a presentation to the Park City Board of Realtors last June, Robinson said the city saw a decrease in younger households and an increase in older households between 2000 and 2010. The surrounding county has become more attractive to younger households as well because of the diversity and greater affordability of housing.
To fund affordable housing, Park City has a property tax code that incentivizes renting long term versus nightly rentals or leaving a home empty. Robinson says that primary residents (long-term rentals) are taxed at 55 percent of their assessed value versus 100 percent for second homes. In 2013, Park City received the Robert Larson Public Policy Award for its ongoing commitment to affordable housing.
The city has a goal of 10 percent of its housing stock being some form of deed-restricted affordable housing. By 2020, it aims to reach or exceed 7 percent, and as of this year is at 5.5 percent. The city is looking at older condo properties to see if there is a level of redevelopment they can bring to the units, and has the funding available if such opportunities become available.
Past projects included the preservation of the Holiday Village Apartments in 2001 under the US Department of Agriculture (USDA) where each of the 80 units was awarded rental assistance, so no household pays more than 30 percent of its annual income for rent. A similar project was done a few years later, but in 2005 the City Council shifted its focus to homeownership projects, including a 13-unit project in 2008 and a seasonal housing project for homeowners.
“We are currently developing another small affordable homeownership project on city-owned land, and evaluating city parking lots for further housing development opportunities,” says Robinson.
The real challenge for Park City, as worded in last month’s Board of Realtors presentation, is this: “Keeping and attracting moderate and middle-income residents is crucial if we want to remain a real life town and have a light carbon footprint.”
“The term Draconian has been used to describe us. We are supplying housing for workers. Once you make that decision, you know what you are building and who you are building for,” says Telluride mayor Stu Fraser. “People cry when they sign the contract, and it’s from joy. We have a really overjoyed group of people that have housing, and a frustrated group that want it. They’re not cookie-cutter places. They win architectural awards. It’s the most gratifying part of my job, building housing and building it the best that we can.”
A recent survey reported that 60 percent of workers in San Miguel County want to live in Telluride, and 30 percent of the local workforce lives in Ridgway or neighboring towns and commutes to work in Telluride.
Approximately 56 percent of all homes in the town of Telluride are owner-occupied. Fraser says the goal is 60 percent, so they’re close, but it still takes time. In all, 310 homes in Telluride are deed-restricted. The town spent $25 million on 100 deed-restricted affordable homes between 2004 and 2012.
“We’re not in a rush to solve the problem in three years,” Fraser says. “And we cannot solve the problem by ourselves. Myself and the mayor of Mountain Village met with all the HR directors from all the large businesses. We said, ‘You’re telling us you don’t have places for your employees? You have a responsibility, too. Government is not set up to be a sole provider of deed-restricted housing. Everybody needs to participate.’”
Fraser and his colleagues even talked to Telluride Ski and Golf Club and they’re now looking at purchasing properties for employee housing. Lance McDonald, program director for the town of Telluride, compares the idea to the old mining model. “When the mines came in, they built housing for their employees. Then if you lost your job, you lost your place to live.”
Telluride has a half-cent asset sales tax that generates the affordable housing fund. There’s also a sliding scale fee that contributes to the fund, which is based on square footage of new houses being built in town. McDonald says larger homes pay a larger fee percentage-wise than smaller homes. But the half-cent asset sales tax is where the real money comes from and generates roughly $600,000 per year.
Of the 310 deed-restricted units in Telluride, 31 are employee dwelling units, which they call their accessory dwellings, and Fraser says the town had to do a lot to make sure homeowners were compliant with town regulations.
“We sent letters out, then followed up with phone calls to property owners to find out if they were renting. It took a while, but we got responses from virtually everybody. We had to stay on their tails to get the information back to us, but now they report annually,” says Fraser.
According McDonald, “We definitely have affordability issues, and they get hotter and colder with the economy. As our region continues to build out, it becomes exponentially harder to create meaningful, affordable housing in these resort communities. A lot of the low-hanging fruit has already been picked.”
The housing crisis has really never gone away in Jackson. “It continually gets worse; however, it does take on different characteristics,” says Stacy Stoker, executive director of the Teton County Housing Authority. “During the economic crisis, we didn’t have as many people living out of cars, and the vacancy rate in rentals was higher. Now it’s almost zero.”
Of the 13,273 housing units in Jackson in 2013, 9,295 (70 percent) remained occupied; 4,139 were occupied by renters, 5,516 by owners. Roughly 36 percent of households have an income less than $50,000 and approximately 38 to 40 percent of the local workforce lives in Driggs, Idaho or another neighboring town and commutes to work in Jackson.
Elected officials in the town of Jackson have a goal of housing 65 percent of the local workforce. Stoker says Jackson was at the 65 percent mark a couple of years ago, but has slipped to about 62 percent and is losing ground pretty quickly right now. There is a Housing Action Plan in the works that should be complete within the next couple of months.
Stoker says there is no dedicated funding source for housing in the community besides developer-in-lieu fees, nor are prospective developers lined up for such endeavors, but this may come through the Housing Action Plan. There are fees that new development pays when they don’t provide housing units in the development, and those fees go toward affordable housing.
Last summer the town of Jackson passed an ordinance allowing people to sleep overnight in public parks and parking lots.
“The idea was for someone who had an RV or vehicle to be able to pull over and sleep overnight,” Stoker says. “This had not been allowed in the past. There was consideration of setting up some kind of man camp for this summer, but I believe that idea was squashed due to issues that could arise from the density of campers all in one place.”
Stoker says the biggest problem in Jackson is the shortage of rentals. “Many people have turned to using their single-family homes and condos as short-term rentals, even when they are not allowed, and this reduces the number of units available for the workforce. Last summer, we had 12 percent of the workforce living out of their cars,” she says. “A decade ago, it was difficult to find rentals, but not like it is currently.”
Stay tuned for Part III of Living the Resort Town Life, in which we’ll speak with local officials and discuss the area’s future plans to develop more deed-restricted affordable