Placing deed restrictions on existing housing stock
[ By Katherine Nettles ]
As the Gunnison Valley Regional Housing Authority (GVRHA) develops its new Good Deed Housing Program, some of its program leaders made a final stop recently to present their plans to Gunnison County commissioners among the other elected officials in the valley who have gotten involved. County commissioners expressed some hesitation, however, and had many questions as to how the program would fit in with their other efforts to develop new construction for affordable housing in the Gunnison Valley. The work session was not intended to make any decisions, and commissioners said they would consider the program at greater length before deciding whether to participate.
Affordable housing and land use consultant Willa Williford presented the Good Deed program developments occurring in the valley. Good Deed recently launched a website and has raised approximately $480,000 in its first year to purchase deed restrictions on existing homes in the valley. The purchases are meant to incentivize property owners to keep housing available to locals and preserve the “community character and economy of the Gunnison Valley,” using available housing stock.
Williford reviewed that through the program, property owners can accept a payment to place a deed restriction on their property, in the range of 10% to 15% of their property’s assessed value. Then the property is in no other way restricted from valuation, but occupancy would be limited to local workers only, defined as someone who works 30 hours per week and makes 80% of their income in the valley.
“We ended up defining this very broadly,” said Williford, to also accommodate retirees who have lived in the valley for many years, or other “reasonable” cases. Occupancy could be for a renter or an owner.
In its “pilot year,” the program has secured commitments of $100,000 each from the towns of Crested Butte and Mt. Crested Butte, a tentative commitment of $40,000 from the City of Gunnison and the Valley Housing Fund has tentatively agreed to match the total collected from all other entities.
“We are in the right ballpark for our goal of doing six to 10 units in 2022 as the first year,” said Williford, which would cost between $350,000 and $700,000.
Williford and GVRHA director Jennifer Kermode opened the discussion to commissioner questions, and asked if the board was interested in supporting the program now or in the future.
Commissioners overall gave a lukewarm response to the program. Commissioner Liz Smith questioned the feasibility of such a program changing the trajectory of Gunnison County to avoid how I-70 corridor resort communities have developed. She also asked what strategic goals the program was aiming for.
Williford said in addition to preserving local housing markets in various income levels and incentivizing the addition of things like accessory dwelling units to provide local housing, the program would complement other efforts happening simultaneously. “And socially, a big benefit would be to preserve diversity of incomes in any given neighborhood,” she said.
“When you have just a live-work deed restriction and such a gap between the NOAH (naturally occurring affordable housing) and free market housing available, this provides that next step up market, gives people the opportunity to step up from a starter home to something more without that appreciation cap over time, being able to cash out and move up to free market housing, or cash out and unfortunately, move out,” said Kermode.
County manager Matthew Birnie said he was aware of much larger funds of the similar programs in Vail and Breckenridge. He asked how the current advertising of the program compared with larger ones elsewhere.
Kermode said she had helped start those other programs, and after about a year of “pretty soft advertising,” she expected the program to gain momentum and financial strength.
County commissioner chair Jonathan Houck asked how to address the funding from various jurisdictions. “There is generous funding from the north end of the valley but as you just said, there is more opportunity in the south end,” he noted of housing market rates.
Williford said each jurisdiction has expressed preferences for having its contributions kept in a geographical area, and those would be contractual.
Mason asked how to address locals in the program whose circumstances change. “Do we do yearly monitoring, or do we force a payback?”
Williford said that if someone no longer meets the criteria, they would have to either rent to someone who does meet it or sell the property. She and Kermode emphasized that they don’t want to displace long-term residents such as retirees.
Houck commented that many local residents are working in an industry or job that isn’t a match for their skills or education, and opportunities might increase for those workers in the coming years as the economy expands and diversifies.
“If 10 years down the road, we are no longer a service community, and people are working on their computers selling widgets in Florida…I think it’s better to address that as it becomes relevant,” replied Kermode.
Smith said she appreciated that there is still a free market element to the program, so if someone needs to sell they can.
Houck said candidly that it would be a challenge to decide between this program versus funding infrastructure and new development. “Where can we take the limited resources we have and deploy them best?” he asked.
Williford said generally the communities doing this have about 70% of their funds invested in development. An exception is Vail where that is flipped due to limited land and resistance to new affordable housing construction.
“I think it’s really important to have both,” she said.
Birnie said his understanding was that most communities doing this have completed more development first, and Smith agreed that maybe it would make more sense down the road, “as we approach build-out.”
“And the towns have approached build out, more or less. So maybe it makes sense for them,” said Birnie.
“The key is having a deep toolbox of tools and opportunity,” said Houck. The commissioners did not express any commitment but said they will consider the program more and get back to its administrators.