Mt. CB agrees to Homestead purchase assistance program

Lottery scheduled for March 15

By Kendra Walker

The town of Mt. Crested Butte and its Homestead developer, Bywater Development, are working to set the stage for the upcoming construction season and the development of the 22-unit Homestead affordable housing project. Over the past month the town and Bywater have taken several steps to move the project forward, including establishing a purchase assistance program and sharing initial designs with prospective buyers.

The council has agreed to commit between $1.5 million and $2 million toward a purchase assistance program for Homestead buyers. During its February 20 meeting, the council agreed to the town staff’s recommendation to utilize those funds toward purchase price buydowns. 

“We put a lot of work into trying to figure out the best way to use those funds to equitably apply them to each potential owner,” said town manager Carlos Velado. “We explored cost/square foot and percentage reductions from the original sales prices and found one-size-fits-all approaches to be inequitable. Some prices were lower than 2020 while others still had significant gaps between now and 2020,” he explained. 

Velado said the town worked toward developing a methodology to apply the assistance with the following goals: 1. The assistance should be across the board and apply to all buyers (excluding private businesses or governmental agencies, not including the Town); 2. The adjusted sales prices shall be as equitable as possible. The unit price increase versus 2020 should be as consistent as possible to eliminate perceived bias; 3. The methodology should not be arbitrary and should be consistent and defensible.

Velado explained the town would use a percentage discount variable approach based on Area Median Income (AMI). “The higher AMI you have gets a higher discount, and lower AMI gets a lower discount. We found it was the most equitable method across the board and accomplished what we’re looking for,” he said. “This option provides the greatest benefit to the buyers while also establishing a lower purchase price that will keep the units more affordable over time.”

The buydown amounts are determined based on the following formulas: a 5% reduction for two-bedroom units at 100%, 110% and 120% AMI; a 20% reduction for three-bedroom units at 120%, 130% and 140% AMI; and a 25% reduction for two- and three-bedroom units at 150% and 160% AMI.

For example, for a 1,660-square-foot three-bedroom in the 150% AMI category with a proposed sales price of $525,093, the buyer would receive $131,273 in town assistance for a net price of $393,820. A 1,460 square-foot two-bedroom in the 120% AMI category with a proposed sales price of $346,738 would result in $17,337 in town assistance, bringing the net price to the buyer at $329,401.

The council earlier this month approved an amendment for the Homestead Subdivision deed restriction that also qualifies town of Mt. Crested Butte employees and allows the town to purchase a maximum of four units.

Additionally, the town and Bywater held a design presentation meeting on February 8, offering potential homebuyers and neighbors an opportunity to provide feedback on the initial design of the development and units. 

Velado said about 70 people attended. “The meeting was generally received well. Both current Homestead residents and prospective buyers expressed concerns about the roof design, snow shed and snow storage and management,” he said, noting that the plans have been updated based on feedback they received. “We did our best to address it and it is moving positively.”

Bywater presented the preliminary design to the Prospect Design Review Board (DRB) on February 20, and Velado shared that the design review was successful. 

The Gunnison Valley Housing Authority is managing the Homestead lottery and is taking applications until 5 p.m. on March 8. The lottery is scheduled for March 15. 

Site prep for the Homestead development is slated for this spring, with foundation work beginning in the summer. Bywater estimates the first homes to be completed in March 2025. 

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