Good Deed program to use existing units for workforce housing
[ By Mark Reaman and Kendra Walker ]
With the hope to start purchasing deed restrictions on existing housing units in the valley by 2022, representatives of a new “Good Deed Housing Program” came to the Crested Butte and Mt. Crested Butte town councils last week and received a commitment for $100,000 from CB to help fund the initiative. Mt. CB expressed support for the program but no hard financing yet, indicating they too might contribute $100,000.
The program would encompass the geographic area between Gunnison and Mt. Crested Butte with the idea of paying property owners between 10 and 15 percent of market value to place a deed restriction on an existing unit. Local housing consultant Willa Williford along with Jennifer Kermode of the Gunnison Valley Housing Authority described the program to the councils and said it has been successful in places like Vail and Breckenridge.
The proposal would be administered by the Housing Authority and use a so-called “acquisition committee” to determine which properties to obtain. Williford said in other communities, deed restrictions are purchased for up to 15 percent of the value of a dwelling unit. Given prices in the town of Crested Butte, single family homes there would not likely be the prime target. Instead, less expensive units in Mt. Crested Butte and nearby subdivisions, condos in town and houses down valley might offer more value.
The hope is to start with a fund of between $350,000 – $700,000 with the expectation that the average sales price would be about $70,000. A final price would be negotiated between the seller and the Housing Authority.
The deed restriction would mirror those already in place in the county and require the seller to have a unit with a full-time resident occupant living there and working at least 30 hours per week, earning 80 percent of their income in the valley or meeting the county’s retiree definition. No short-term renting would be allowed.
“The program would be complimentary to other tools in the affordable housing toolbox,” said Williford. “It will preserve or return existing housing stock to the local workforce. To be clear, second homes are not the target market. This is more for people who might be considering shifting to short-term rental or someone who needs a financial boost.”
She indicated that in other locations, some people have figured out how to leverage the payment as part of a potential down payment on a home.
Kermode said the Housing Authority has worked successfully with several local lenders so having the new deed restriction on a home should not be a problem when it is time to sell the property. The deed restriction is tied to the property in perpetuity and transfers with all sales.
“Given what the town has spent on some property and the anticipated subsidy for Sixth and Butte, this has a great ROI (Return on Investment). We don’t get the other growth issues that come with new workforce housing since it is basically converting existing housing,” said Crested Butte councilmember Ian Billick. “I think it is worth paying a premium for the deed restrictions. The program sounds fantastic.”
Williford said she and Kermode will be meeting with the various government jurisdictions this fall to get feedback and financial commitments for the program. The Crested Butte council gave them a big thumbs up over the proposal and committed $100,000 for 2022.
Mt. CB likes program too
Kermode met with the Mt. Crested Butte town council on October 5, and they expressed interest in the program as well.
Council member Michael Bacani asked if the program in Summit County had been around long enough to see a market downturn. “I’m curious, let’s say in 2024 there’s a market downturn and all of a sudden we have all these rentals on the market, I’m curious to see what happens to a program like this.”
“The program became very robust in 2019 so it hasn’t seen a downturn,” replied Kermode. “It was really popular in the beginning and captured people who were long-time homeowners and really committed to the community and now it’s slowed down. It’s still a tool, we need lots of tools in our toolbox because it depends on the market and supply and demand.”
Council member Roman Kolodziej asked about residents close to retirement. “Let’s say I’m a long-term local who’s lived here for 30 years and I’m a couple years from retirement,” he said.
“In terms of the deed restriction…then you would not qualify and you’d have to sell the property,” replied Kermode. But there are guidelines for retirement and deed restrictions. “We have a small point system so if you’ve lived in the property for seven years consecutively and you are of a certain age, then you could retire in the property without being non-compliant of the deed restriction.”
The Mt. CB council expressed interest in setting aside $100,000 for a Mt. Crested Butte Good Deed program and directed town staff to draft up a Memorandum of Understanding (MOU) to review.
“Thank you very much for being a council that is excited about exploring new options,” said Kermode.