The Crested Butte News Serving the Gunnison Valley since 1999
“You can’t just sit as a non-qualified person in that unit for years”
[ By Kendra Walker ]The Mt. Crested Butte town council is looking to close a loophole in the Pitchfork subdivision’s deed restriction policies that has allegedly allowed some non-compliant homeowners to avoid selling their units by listing them at high prices. The Pitchfork neighborhood and its deed restricted units have been under a recent spotlight with the dissolution of the Gunnison Valley Regional Housing Authority and the town working to establish a more comprehensive deed restriction compliance monitoring program.
During an April 7 work session, town staff explained they discovered a key gap while reviewing the Pitchfork Occupancy and Resale Deed Restriction Agreement and Covenant. While the deed restriction clearly defines resale requirements for capped units, it does not establish similar resale requirements for uncapped units. With capped units, sale prices are restricted and based on the original purchase price, a 3% per-year appreciation and eligible capital improvements and assessments.
“While resale requirements are clearly defined for capped units, there is no comparable process for uncapped units when an owner is no longer a qualified buyer,” explained community development director Neal Starkebaum, explaining that if an owner no longer qualifies under the deed restriction, they must sell the unit to someone who does. “Recent enforcement cases have shown that some non-compliant owners have listed uncapped units at unrealistically high prices, effectively preventing resale and allowing continued non-qualified occupancy, which undermines the purpose of the deed restriction and limits access for eligible local workers.”
For example, Starkebaum noted a three-bedroom, two-bathroom uncapped deed restricted unit listed for $875,000 that had last sold for $420,000 in 2021.
Town staff has proposed a policy that establishes a clear resale timeframe and consistent compliance pathway for uncapped units when an owner is no longer qualified to stay in the unit under the deed restriction, such as failing employment requirements or no longer using the unit as their sole residence.
The proposed policy would establish a three-month window for a non-compliant owner to complete the sale of the unit. If the unit remains unsold, the town would seek a court order to apply the standard 3% annual appreciation cap to force a realistic price point.
“You can’t just sit as a non-qualified person in that unit for years,” said town attorney Gerald Dahl. “That’s a violation.”
The council debated the complexities of regulating resale prices on uncapped property.
“The thing I don’t like about a three-month grace period is I feel like that incentivizes buyers to watch for these things,” said council member Bruce Nation, noting that it may hurt an owner’s negotiating power as savvy buyers wait for the cheaper pricing to kick in.
“One thing to keep in mind is the person selling also bought the unit under the same conditions that they are now being asked potentially to be sold to,” said town manager Carlos Velado. “When they bought it originally, they were subject to the deed restriction and got subsidized housing as well. But now they’re trying to get the benefit of being subsidized while now selling at a market rate.”
“I think there’s two parallel conversations here, occupancy and sale,” said council member Roman Kolodziej, suggesting that a non-compliant owner should perhaps be required to move out first, and then tackle the pricing of the unit.
Nation suggested the town consider purchasing those types of units to have the power to update the deed restrictions. “Once they are forced to sell it at a capped rate, the town should buy it and amend deed restriction to be what we want, rather than letting it go just to another person and possibly have the same issue 10 years down the road.”
“I think that rewards the person doing this,” noted Kolodziej.
“What it’s buying is control,” Dahl said. “The town understands it’s paying more than it’s going to get back, but it’s buying the control of the property effectively and keeping it in a good affordable state for a very long time. If you’ve got the money and the will, that’s a good solution.”
Dahl suggested staff take the items discussed at the work session to gather additional information and options around the topics of occupancy, resales and judge appraisal for a future council discussion.
During public comment later that evening, Pete Giannini encouraged the council to continue the conversation around updating deed restrictions, noting that he was denied eligibility to purchase a deed restricted unit in Pitchfork because his income made from the stock market skewed his total gross income coming from out of the county, despite him working and living full-time locally.
“The money I have in the market is earmarked specifically for my retirement and a down payment on a house. It came out to be more than 20% of my total gross income,” he said. “While the notion of this deed restriction is a good idea in theory, there are certain instances where it is just not and not doing the job it’s supposed to be doing.”
