How much money can people make and still qualify?
by Mark Reaman
Guidelines to qualify those hoping to get into affordable housing projects in Crested Butte are being worked out by the Town Council and staff. At a work session on Monday, October 19, the council cleared up a few questions but left several others to be determined.
“The last meeting, we looked at these from the 100,000-foot level,” town planner Michael Yerman told the council. “Now we are looking at it from 10,000 feet. Next time we will be on the ground with details. The goal is to put people in successful housing situations.”
To meet that goal, the town will hold a couple of home ownership classes to make very clear what is involved with qualifying and what is expected from new homeowners going into deed-restricted housing. “It is essential for people to know what they are getting into,” Yerman emphasized.
The council wanted some background on the lot pricing in blocks 79-80, which Yerman will compile. At the moment, the idea is to sell lots for as little as $25,000, but the price could go over $75,000 depending on the size of the lot.
“We are trying to keep the lots affordable but also get some money for the town affordable housing fund,” explained town manager Todd Crossett.
One major area of discussion was determining who would qualify based on income. Using the Gunnison County Average Median Income (AMI) figures, the question to the council was whether to allow people making 200 percent of AMI to qualify for any deed-restricted housing in town. For example, a couple with a combined income of $91,840 makes 160 percent of AMI. A couple making $114,800 is at 200 percent of AMI.
Yerman said using town as an example, a couple with jobs similar to town department heads make above the 160 percent AMI. Middle managers probably come in below that figure. He said one local couple, a nurse and a carpenter, came in to ask about affordable housing and they came in over the 160 AMI but below the 200 percent figure.
“I would advocate for the 200 percent,” said Crossett. “When recruiting a town department head, it will help them find a place to live.”
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“People still need to qualify for construction loans so they have to make decent money,” added Yerman. “The banks are saying for construction loans, they will need $40,000 down. Anyone above 200 AMI wouldn’t qualify for affordable housing in town. The higher end would be for self-builds or about six of the upcoming lots. The second tier would be for people coming in below the 120 percent AMI. These units would be town-built units or micro-lots and other lending options could be available to help people with financing.” That would calculate to a couple making less than a combined $68,880.
Councilman Glenn Michel said he was struggling with allowing the higher 200 percent AMI to qualify. “They could buy a house in Crested Butte South and it would be a better investment,’” he said.
“They might want to live in town and not do the commute,” responded Yerman. “The value of having employees living in town is high.”
Councilman Jim Schmidt postulated that two married teachers might make too much to be under the 160 percent AMI, so he was leaning toward allowing the upper limit of the 200 percent figure. The rest of the council was hesitant about that and instructed Yerman to stick the with 160 percent AMI figure for the time being.
Council agreed that deed-restricted housing would go to people with at least one year in the valley and they would have to earn 80 percent of their income in the county. Those who telecommute for a living would have to be in the valley at least five years, since their income would not be primarily derived in-county.
How to deal with people owning residential property and how to sell that property before qualifying for a deed-restricted property will be discussed later.
While expressing some reservations, the council appeared okay with allowing those in such deed-restricted housing to short-term rent the property for no more than a month. That is meant to perhaps help people with their mortgage.
Maximum house sizes were discussed in an effort to keep resale costs low, so 1,500 square feet would be the maximum size allowed for self-built houses on blocks 79-80.
Maximum cost limits would also be imposed in order to keep the initial price of the homes low. The homes would not appreciate at the free-market level but would rise at no more than 3 percent annually.
After more than an hour of discussion, Yerman did not get to all his questions on the affordable housing guidelines so the council will return to the topic next month.