The Crested Butte News Serving the Gunnison Valley since 1999
Price cap and policy…are locals tied to units in golden handcuffs?
By Mark Reaman
The Crested Butte town council expressed some concern with the general idea of changing deed restrictions associated with affordable housing units in the valley at the August 6 meeting. While acknowledging there could be some issues for people who have been in affordable housing for a long time, the council expressed that the valley’s stakeholders should look at the situation and address it, or not, at a policy level and never as a “one-off.”
Understanding they have no authority over Mt. Crested Butte affordable housing projects, the CB council expressed concern that changing the deed restriction could set a detrimental precedent throughout the county, so the council had staff draft a letter to the Mt. Crested Butte town council that was asked to consider adjusting a deed restriction by town residents. That letter was approved by council at the August 19 meeting.
The issue came up when Homestead at Prospect residents asked the Mt. Crested Butte council to revise the current deed restriction to better reflect the current market by lifting their price appreciation cap that stands at 3% annually. Resident Theresa Henry told the Mt. Crested Butte town council in July that current homeowners in the neighborhood have been forced to live with a constant construction zone as the neighborhood expansion of 22 units has hit hurdle after hurdle. She asked the Mt. CB council to lift the price cap “to accommodate the hardship forced upon us, the impact on our quality of life and the rise in housing costs, including affordable housing costs.”
She explained that their deed-restricted houses purchased 10-15 years ago do not align with the sale of comparable affordable housing units today in the current market. She said many neighbors looked at perhaps selling their current units and applying for another affordable housing unit “but the unit sale costs were too high for us to even consider or qualify…The gap in the current affordable housing pricing and Homestead’s current 3% appreciation (limit) force us to remain in our originally purchased units, unable to secure financing.”
While revisions to deed restrictions are possible, Mt. Crested Butte has never amended a deed restriction on price appreciation caps.
Crested Butte town manager Dara MacDonald asked the council if they wanted to weigh in on the issue given the valley-wide impacts of deed restriction. “The purpose of affordable housing is to provide safe, stable housing and not build wealth,” she said. “That can be a hard balance.”
“It makes me wonder if there is a way to accommodate elements of both. If you can’t even get into a larger deed-restricted unit as a family grows, is there a way to structure it to sell deed restricted units for what that deed restricted unit would sell for today,” asked councilmember Gabi Prochaska, who is also on the Gunnison Valley Regional Housing Authority board.
“I don’t think the solution is to increase the sale price of the unit someone is leaving,” said mayor Ian Billick. “The question is what does it take to get into that other unit? We don’t want someone necessarily tied to a unit in a pair of golden handcuffs. That could be a discussion to have as a policy decision.”
“To me the issue isn’t to allow the home to build a college fund or retirement account but if the people are locked in there forever and stuck in that one unit, there might be something we can do. I don’t know,” said Prochaska.
“Maybe there needs to be help and counselling on other ways to build wealth when you have a low mortgage payment,” suggested MacDonald.
“There will always be pressure for homes to be piggy banks. There will always be that request,” said Billick.
“The education piece is huge,” agreed councilmember Jason MacMillan. “What’s tricky are the other options. So much depends on timing.”
“Like Ian said, the conversation should happen, but it is important to consider at the policy level and not as a one-off,” said MacDonald.
“The price cap is very clear,” noted councilmember Kent Cowherd, who lives in a deed restricted unit. “You know what you are signing up for when you get one of these units.”
The letter approved by the council at the August 19 meeting states that the “appreciation cap is a fundamental component of a deed restriction, preserving the affordability of a unit particularly in inflationary periods. Its primary purpose is to ensure the long-term affordability, for current and future owners….”
Among other warnings the letter says that removing the price cap appreciation impacts affordability, undermines public investments, defeats housing strategies and sets a precedent that will lead to similar requests.
