Housing hiccups at Paintbrush development in Gunnison

Some renters upset over rent discrepancies 

By Katherine Nettles

As might be expected for a large workforce housing development, the first couple years have presented some kinks to work out for the Paintbrush housing development in Gunnison, and some renters are not happy with the notices they have received in the past two months regarding income qualifications and rental rates there. The Gunnison Valley Regional Housing Authority (GVRHA) and Gunnison County staff are working with the housing development’s owner and manager, Gatesco, to sort through misunderstandings and find a way forward that is clear and equitable to all involved. 

Paintbrush is the county’s largest workforce housing development yet, with 76 units varying from studio apartments to three-bedroom, two-and-a-half bath units. There is a deed restriction on all units requiring that occupants work in the county, and a complex system of rental rates for most of the units based on the income level of occupants relative to the area median income (AMI). 

The units were completed in late 2021, and due to some management errors the first group of tenants were, in some cases, mismatched with the units and rental rates for which they qualified. In other cases, tenants making too little to qualify for the units were also given leases. As Gatesco has sought to rectify these issues over the past two months, several tenants have come forward to the county and GVRHA alleging that the rules have been changed on them. 

Gatesco began sending letters to tenants in August, three months prior to the date the first group of leases were set to expire. While many were informed they were eligible to renew their lease, others were informed they did not qualify for the units at all, or that they would need to pay higher rents if they wanted to renew.

GVRHA executive director Andy Kadlec says the GVRHA and the county became aware of the situation in late September and reached out to Gatesco. Kadlec explains that GVRHA works with deed compliance issues and has been assessing deed restriction compliance on the Paintbrush property through an audit of Gatesco’s files.

During a county commissioners’ meeting on Tuesday, October 17, two tenants from Paintbrush addressed the issue during public comment. 

Andrew Prather said that he has lived in Paintbrush for almost two years, and he believes he has been overpaying for his unit based on his and his partner’s income bracket. He expressed frustration that he was notified that they were eligible to renew their unit, but then a few days later notified that they did not actually qualify to renew.  

“I feel that Gatesco is not doing what they are supposed to be doing, going by the deed restrictions,” he said.

Daniel Brown, with his infant daughter accompanying him, said his family is in a similar situation and worried they might have to relocate to a different area due to the lack of other housing options. “It just sounds like they are trying to change the rules to suit themselves,” he said. 

County commissioner chair Jonathan Houck said the county, which worked with Gatesco to make the project happen, has been aware of some issues at Paintbrush. “We have some ongoing discussions making sure that all the pieces are working correctly,” he said.  

County manager Matthew Birnie said they are currently doing an audit to better understand the situation and trying to negotiate a period to pause the lease expirations while they work on better solutions.

“There are several units that this is relevant to…the deed restriction doesn’t work quite like your understanding,” Birnie told Priser. “It does appear that they made some management mistakes. They actually undercharged more people than anything.”

Gary Gates, the owner of Gatesco, said he acknowledges that in the early days of signing new leases for the Paintbrush units, his former employee made some mistakes and put people in units meant for different AMI categories. 

In one example, documents that Gatesco provided to the GVRHA, the county and the Crested Butte News show a three-bedroom, two-and-a-half bath unit being rented for $525 per month to a couple making $60,000 per year, or 80% AMI. While that 80-120% AMI  qualification is what the bulk of Paintbrush units are aimed for, a unit of that size was supposed to go to a family of at least three people, and even at 80% AMI the unit should have, according to Gatesco’s rent schedules, cost between $1,474 and $1,949 per month.

Gates said there are also renters who make about $20,000 per year, and he is legally bound to charge only up to 30% of someone’s income. “I can’t do that,” he said of the economics, since the 30% AMI level would require much lower rental rates. He noted that the units are not government subsidized, and that the development is privately owned but he got a discount on the land from the county in exchange for agreeing to build affordable housing and manage the units. 

Gates said he sent out notices to those whose rent needs to be adjusted and gave everyone 90 days’ notice. “And we are offering month to month for people who would have to pay an increase, so if they just need time to work out another solution they can. But we have a waiting list of a dozen people who are at the right income level,” he said, to comply with the regulations he agreed to. “We’ll do what we can for those who want to work with us.”

Kadlec said that while the GVRHA is still assessing the situation, he is sensitive to both the tenants facing rent increases or eviction and to Gatesco trying to get the property into alignment with economically sound and equitable rates to keep the system stable. Kadlec said the GVRHA is working toward recommending next steps to everyone involved.

Commissioners too said they are still sorting it out. They held a scheduled executive session on the matter Tuesday, and afterward Houck summarized they are still trying to answer their own questions around deed restrictions at Paintbrush. 

“We appreciate that staff has actively engaged in these conversations with Gatesco, and I think we all have a mutual goal which is to keep people housed and to clarify and fulfill the mutually agreed-upon terms of how the deed restrictions work,” he said. “We also want to make sure it’s clear that the board is fine with using all reasonable and necessary legal actions and authorities that we have in this discussion. But where the discussion is right now is working with [Gatesco] and trying to work through those nuanced issues.”

Birnie and county attorney Matthew Hoyt both agreed the direction for them, and their respective staff, was clear. They said they will continue to work on an understanding and try to keep those who qualify in the Paintbrush apartments. 

“It’s a learning process for everyone,” said Gates. “These are the first leases to be coming up. We’ll get this worked out…we just have to deal with these mishaps.”