The Crested Butte News Serving the Gunnison Valley since 1999
Lottery a time-consuming process
By Mark Reaman
Chelsea Dalporto-McDowell was one of the lucky ones. She got into a deed restricted Paradise Park unit in 2019. She obtained a mortgage loan and settled into the neighborhood. Her life circumstances changed when she met a partner, and she made the decision to move to Snowmass. In April of 2023 she asked the Gunnison Valley Regional Housing Authority (GVRHA) officials about the process of selling her deed restricted home. She began the official process that included the town of Crested Butte in June, and the process that will eventually help another local worker has left Dalporto-McDowell frustrated, stressed and with her bank account lighter. The sale of her unit is still not complete.
Dalporto-McDowell relayed her experience to the Crested Butte town council at their meeting on September 18. She conveyed that she felt that taking four months to sell the two-bedroom unit in Paradise Park was too long and a financial burden for her. She said the process was also not clear, which led to emotional stress and seemed to favor married couples over long-time single residents and was confusing for everyone.
While acknowledging that there is always opportunity to improve communication and messaging, representatives of the town and the GVRHA said the sale timeline was not unreasonable given the need to hold a lottery for qualified local workers, but they are open to suggestions to make it better.
Confusion leads to stress
Dalporto-McDowell explained to the council she was told three different things when it came to the process of selling her unit. At first, she was told she could choose whom she could sell the property to if they met the deed restricted conditions. She was then bombarded by fellow locals asking her to choose them. She said the barrage of emails, texts, notes and personal interactions all trying to convince her to choose them was extremely stressful. Eventually she connected with a qualified local who could pay her cash for the unit at the maximum allowed sales price. That maximum sales price is calculated by taking the original purchase price, adding in capital improvement costs, and allowing a 3% return in equity.
The two-bed/one-bath unit was determined by the GVRHA to have a maximum resale price of $314,189.
Dalporto-McDowell said the number of requests and personal stories from valley workers hoping to buy her unit were “staggering and emotionally taxing.”
Not only were the encounters with desperate locals stressful, the confusion coming from the local housing officials was as well. “Between June 16 and July 27, I was told three different sales processes ranging from being able to choose a qualified buyer, to having to sell to an essential employee, to what would be the final answer, hosting a formal lottery,” she told the council. “By the time this process is closed it will have been four months of waiting on the correct transfer process to be established, a buyer to be identified and the bank to close the deal.”
She said that even when the officials determined a lottery was needed to pick a buyer, the word was sent out from officials that she still could decide who would be able to buy her unit. This added to the stress and the number of encounters from people hoping she would choose them.
Dalporto-McDowell said given the uncertainty and the fact the town could not provide a timeframe for the sale process, there was not an opportunity to rent it to a qualified tenant and the unit has sat empty. “Had the town of Crested Butte had a defined process and timeframe, I would have rented the home to someone in the community and avoided the financial implications of having an empty house for four months. This pitfall…has made it critical for me to borrow money to continue to float my mortgage while the town of Crested Butte figured out and enacted the transfer process,” she said. “This should never have happened in a town that has identified housing as a crisis.”
Finally, it was made clear to Dalporto-McDowell that the lottery would be held, and the person chosen would have the option to take the unit. This again relieved Dalporto-McDowell from some stress, but when she saw the list of qualified buyers and how many lottery entries they were able to get based on certain criteria, she felt the process was “discriminating” in favor of married couples over long-time single residents.
“When looking at the lottery results, I was baffled by all the single people, who coincidentally also happened to be the folks who had lived in the community the longest, being at the end of the priority list,” she told the council. “Please find a way to make this equitable across all lifestyle choices for people in the future.”
Hearing the concerns
Councilmembers said they appreciated hearing her experience and felt further discussion over guidelines and lottery priorities would be appropriate. Crested Butte housing director Erin Ganser admitted at the meeting the process had been “a bumpy ride” at times. She said the plan was for housing officials to update the affordable housing guidelines and bring them back to the council for consideration.
Ganser, GVRHA executive director Andy Kadlec and GVRHA ownership program manager Lauren Woodyard further addressed the situation with the News on September 22.
“We’ve heard loud and clear some of the concerns and we want to revisit the process,” said Kadlec. “But when there are deed restrictions in place, we have to follow what is on paper. We can perhaps change it for the future but are limited to what we can do. We are bound to the deed restriction and have to operate under current guidelines.”
“Four months to hold a lottery and sell a deed restricted home is not unreasonable,” said Ganser. “There are a lot of moving parts to the process. A fast lottery doesn’t exist. Four months is not insane. Prospective buyers need sufficient time to complete a complicated application process and GVRHA needs sufficient time to review applications. We own some of the issues brought up by Chelsea [Dalporto-McDowell], but I don’t think it added any time to the process.”
Woodyard said there was overwhelming interest for the unit, and it was determined a lottery was required as the way to transfer ownership.
“I had more than 100 voicemails inquiring about the unit,” said Woodyard. “We had 50 showing requests and ended up with more than 50 applications. Each application is more than 50 pages. Ultimately there were 25 qualified applicants and 24 offers made by lottery participants at full price.”
The application requires two years of tax returns and payroll documentation, copies of recent pay stubs, proof of Gunnison County residency, bank statements, state issued IDs and a lending statement for the anticipated loan amount.
“Lotteries take time and are not required for all deed restricted units,” said Ganser. “The Paradise Park deed restrictions are admittedly complicated. I think this is the first time we ran a lottery under these guidelines. We learned that for this neighborhood we need to order a title commitment and involve a legal review, which added three weeks to this timeline. Additionally, this was the first time GVRHA acted as a licensed transaction broker and that this administrative team ran a lottery under these guidelines.”
Lottery participants are given various numbers of tickets to be put in the hopper based on things like longevity in the valley and the number of qualified employees or dependents in a household.
Ganser acknowledged there was a mix-up conveyed to Dalporto-McDowell in July from another town staff member while she was away on vacation, but it didn’t result in much if any added time for the process.
“We took away the importance of communication in this kind of situation because everyone’s emotional frequency is pretty high,” Ganser said. “Having 25 households going after one unit is intense. There will be 24 losers. Is a lottery the best way to do it? I don’t have the answer to that. But we tried to be very clear with everyone including the people in the lottery.”
“The challenge is what is the difference of good faith negotiations without having the seller get overwhelmed,” said Kadlec.
“The town of Crested Butte and GVRHA communicated with the seller our understanding of how negotiations in a lottery environment can and should be handled. We feel this aspect of the lottery was particularly challenging and intend to revisit the process to provide better clarity in future sales.”
As to the charge that couples get more opportunity in the lottery than single people, Ganser said it is not based on who is married or not. That is not mentioned in any guideline. “But there is preference with a two-bedroom unit for ‘two qualified employees’ versus one individual,” she said. “This is workforce housing which is different from community housing. We try to fill all the bedrooms. We want bottoms in beds. It is a right sized unit for two people or a person with dependents.”
Next steps
Ganser said the town started the process of updating the housing guidelines this summer, which included a survey sent out to all owners of deed restricted housing units as well as people who signed up to the GVRHA deed restricted “interest list” for the North Valley. The town extended the deadline for the survey following the 911 Teocalli lottery and encouraged lottery participants to participate. Additionally, Ganser said the town will be hosting a public meeting on November 9 to gather more feedback on the guidelines.
“Lotteries are not awesome, we know that,” said Ganser. “We want to hear from people about what might make it better.”
“Selling lottery units is much more involved and there is a lot of administrative work versus a first come-first served process,” added Kadlec. “There are probably dozens of different types of deed restrictions throughout the valley.”
Woodyard said that once an applicant is approved under deed restrictions, approval is good for a year. Beyond that, a new application must be submitted. The other thing to remember is that different deed restrictions have different qualifying requirements, so being approved for one home may not automatically apply to the next.
“Our hope is to listen to the public and figure out a more efficient process,” concluded Kadlec.
Dalporto-McDowell agrees a more efficient sales process should be crafted. “It was my misfortune to be the first to sell in the neighborhood, but I certainly hope that my neighbors will not have to go through this financially burdensome, taxing and emotionally draining experience should they choose to sell their units,” she said. “To me, this is the town of Crested Butte’s Planning Department avoiding any responsibility for their inability to identify the correct process for selling my unit…a process they in fact established. Two months of this, I can chalk up to the cost of doing business, but to say four months is acceptable, is simply evasion of their own wrongdoing.”
Her Teocalli Avenue unit is scheduled to close October 6.
