Mt. CB continues affordable housing talks for future

“It’s super uncomfortable, it’s super hard to do well”

By Kendra Walker 

During a November 18 work session, the Mt. Crested Butte town council dove into the topic of deed restrictions and affordable housing. They reviewed the types of deed restricted units currently in the town as well as some of the issues with keeping those units affordable, such as escalating HOA fees and varying deed restrictions. Crested Butte housing director Erin Ganser also shared thoughts and feedback based on her experience dealing with deed restrictions in Crested Butte.

The discussion will serve as background and perspective as the council prepares for a housing retreat in early February that will hopefully result in the development and rollout of a strategic housing plan.

Currently, there are 97 deed restricted units in Mt. CB. There are 54 units with no Area Median Income (AMI)% requirement. “While the unit restrictions do not identify an AMI%, all the deed restricted or covenant restricted units require county residency and county employment, with many designated specifically as employee units,” said community development director Neal Starkebaum. 

There are five units in the town that fall under the 80% AMI category, and 18 units in the 81-120% AMI category. The town recently completed 22 new units in Homestead, and placed AMI% resale caps on 20 ownership units, ranging from 100% to 160% AMI. The town owns a total of five units throughout town that are used for employee housing.

HOA challenges

The council discussed the issue of escalating HOA fees and assessments impacting the affordability of community housing units. From a sample of condo units throughout town, the average monthly HOA dues increased an average of 20% to 65% from 2021 to 2024.

“There’s quite a range of HOA fees within the community,” said Starkebaum. “Those range from $295 to $920. The average monthly cost in 2024 including HOA dues, taxes and insurance is $581 per unit per month. HOA fees are having a significant impact on the affordability on AMI deed restricted units. Even if the owner was able to afford the mortgage and down payment, they are slowly getting bought out by increasing HOA fees and assessments. And in rental units, those increases are typically passed down through to the renters.” He noted that the town has no authority to change or modify existing HOA fees.

“Mixed income properties where you have a portion of deed restricted versus a majority that are market rate are really difficult to manage,” said Ganser. “If you’ve got 20 units and four are deed restricted, you’ve got 16 people who can outvote those four for a hot tub or landscaping, or cool Christmas decorations or whatever it is. The market rate owners are going to try to maximize their investment, but those deed restricted units are caught in those HOAs. Special assessments are also tough. So, you then have scenarios where the price point and the income limit do not match. It’s a challenging space.”

She continued, “We are trying to educate our HOAs. There’s a lot of baggage with these units that is not clear to the public.”

Councilmember Valeda Scribner agreed. “HOAs are not educated businesses but they are operating as one and therefore there’s nothing to say they’re doing it the most efficient way.”

“It’s such a complicated social structure and then you throw deed restrictions in there,” said Ganser. “It is just what it is. Going forward we have to figure out how to manage them.”

The town’s inclusionary zoning regulation requires that 15% of units in new developments be community housing, or the developer pays a fee in lieu. Town manager Carlos Velado explained some of the history behind why there are so many mixed ownership complexes in the north end of the valley. “In our construction boom in 2005/2006, part of developers meeting those community housing requirements was by purchasing existing units and putting deed restrictions on them. That’s how we got in these mixed ownership units. Looking ahead wasn’t really at the forefront. Now here we are, 25-30 years later learning from it.”

“The preference is to not mix and mingle knowing this tension exists,” said Ganser. “Make sure you have the conversation with the developer of how those (affordable units) are managed separately to the HOA or are built separately. I think it’s better to try to separate it if they can purchase something off-site that exists,” said Ganser.

“I think that creates a difficulty when you are trying to integrate housing units into the developments,” said Starkebaum. He noted that could be addressed in the deed restrictions or requirements the town puts on the developer. “Then you have more of an integrated mix of the community with those income levels.”

Other challenges

The council discussed other deed restriction challenges, including current AMI percentages, income qualification caps and compliance.

“There are going to be a handful of people that don’t qualify that should, and a handful of people that do qualify that shouldn’t,” said Ganser. “Life is messy and now we’re stepping into people’s houses and their income. This is the weirdest place for a government to play. It’s super uncomfortable, it’s super hard to do well and knowing that some people are going to game the system.”

Ganser said the town of Crested Butte doesn’t income-restrict after the fact once someone qualifies initially. “We want our local workers to be able to advance their career, to pursue additional education, as long as they’re still meeting the local workforce requirements.”

However, in Mt. CB’s Homestead development for example, the owner must maintain their qualifying net worth and cannot exceed that throughout their ownership of the unit.

“If that’s something you feel is important to keep in place, you’re going to run into that compliance issue a lot, and people will struggle because there’s nowhere for them to go,” said Ganser.

“What’s coming up a lot is that the definition of working in the community is so gray now,” said Scribner. “I want to acknowledge the fact that you can be doing the same exact job and one structure will qualify you and one will not. Are we serving the communities that we want to serve with the current guidelines through our deed restrictions? Are the deed restrictions aligned with current community needs and what we want to actually enforce?”

“There’s also this perception of people being dinged for their life changing after the fact after they get into housing,” said councilmember Roman Kolodziej. “The perception of, they put their time in so they’re local enough no matter what happens.”

“The philosophical question you’ll want to ask yourselves is if you want to create wealth creation for a single household, or protect a program and address a problem,” said Ganser. “Governments usually function in the space of providing a safe, functional house for someone without helping them individually create wealth on it.”

Kolodziej asked what the council should weigh as they consider hiring someone, whether in-house or a contractor, to help the town with housing.

“It’s important to decide how comfortable you are with compliance or if you don’t want to allocate staff resources,” said Ganser. “Over my years of doing this I’ve heard both sides: people saying, ‘I am not sending my tax returns to somebody that I know’…but other people seem to appreciate that we’re a small town and having a human you can go talk to is a part of that.”

She continued, “One of the big things we’re realizing is there’s not many people in that space that are ready to do this work. We’ve got these really disparate portfolios of deed restrictions and ages and how well they’ve been enforced and it’s a little messy.”

Ganser told the council that the town of Crested Butte is interested in partnering with Mt. CB as they look to replace the work previously done by the dissolved Gunnison Valley Regional Housing Authority. Crested Butte recently held a community listening session on deed restrictions and Ganser said they will continue to gather feedback and fine-tune.

“We are all inventing our housing programs from our own awareness and political reality and workforce needs,” she said.

The council will continue analyzing the current state of affordable housing and develop a plan for moving forward at their housing retreat scheduled for February 5, 2025.