Appreciation cap set for Miller Ranch homes
Eagle County commissioners, by a vote of 2-1, approved Tuesday a “floating” deed-restriction cap of between 3 and 6 percent; it will change according to the average increase of wages.
Commissioner Arn Menconi voted against the cap, saying the purpose of the 282 new homes in Miller Ranch is to keep some housing in the county affordable and not help owners make money when they sell their homes.
“I would have like to see the deed-restriction cap set at 3 percent a year,” Menconi said. “I voted “no’ because the supply of good housing for people who live and work in Eagle County is only going to become more scarce.”
Recently, Menconi said, two deed-restricted homes were put in the market in Vail and 15 people were interested in them – the town of Vail’s cap on deed restriction is 3 percent.
“We see the 3 percent cap being used in many places across the United States, and it’s working,” Menconi said. “We haven’t seen any examples of deed restriction attached to wages in any other community.”
Salaries have grown in Eagle County at an average annual rate of 5 percent from 1992 to 2001, reports the Colorado Department of Labor and Employment. Residential property values, however, have been changing at a rate of 10 percent a year.
“I don’t see the government’s role to assist homebuyers with building equity,” Menconi said.
With the approved floating cap, a home purchased for $210,000 would be valued at about $263,000 three years later, if the cap was set at 5.5 percent thay year, Menconi said. Using a 3 percent cap, that same home would be valued at about $218,000.
“The proposed caps won’t help people build too much equity,” said Michael Gallagher, chairman of the Board of County Commissioners. “The floating cap between 3 and 6 percent puts reasonable limits.”
Commissioner Tom Stone said it makes sense to have the appreciation of home values to go up as salaries increases.
“Mr. Menconi has forgotten that we live in a capitalist economy instead of a socialist economy,” Stone said. “We’re trying to keep these homes affordable to firefighters and teachers and other medium-income people. The state wage average we’ll be using will reflect their wage increases.”
If the town of Vail had stayed as a partner of Eagle County in the Miller Ranch project, Mayor Ludwig Kurz said it would have pushed for a 3 percent cap, the same deed-restriction existing in Vail. But the town accepted a $1 million offer from Eagle County to step out of the Miller Ranch project. According to the agreement, which leaves Eagle County and ASW Realty Partners as the developers of the project in Edwards, half of the homes will remain available for employees within the town of Vail – the cap however will be the one approved by the county.
“These people (buyers at Miller Ranch) should have an equal opportunity as everyone else who can build some equity and can move from a government-sponsored development to a free-market home,” Stone said.
The first 66 qualified applicants already have chosen their homes at Miller Ranch, where prices range from the $120,000s to the $260,000s.
“The county’s role should be to provide affordable housing for our citizens in the future,” Menconi said.
How it works
– If the Colorado Department of Labor and Employment determines the average increase in a given year 4 percent or 5 percent, the allowed increase in value for a Miller Ranch home would be the same, respectively.
– If the average wage increase is 6 percent or greater, however, the percentage increase for resale of a home in Miller Ranch shall be capped at 6 percent for that year.
– If the average wage increase is 3 percent or less, the percentage increase in value of a Miller Ranch home shall be capped at 3 percent.
Veronica Whitney can be reached at 949-0555, ext. 454, or at firstname.lastname@example.org.