Avon Town Council takes a hard look at dated affordable housing guidelines

Current housing guidelines, which have not seen an update since the early 1990s, are preventing owners of deed-restricted units from improving or selling their units

Completed in 2006, Miller Ranch in Edwards features 282 deed-restricted residences, and the guidelines that govern its units serve as an example for Avon's new housing guidelines.
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The Avon Town Council reviewed a new document Tuesday that would replace the town’s outdated housing guidelines adopted in 1990 and 1991.

Council members did not come to any conclusions or vote on the new document, titled 2023 Town of Avon Housing Program Guide and Administrative Procedure, but did critically analyze it. Following revisions made by town staff, the document will again be presented to the council at its Aug. 8 meeting.

While there is no emergent need to approve the new guidelines, as long as the old guidelines are in place, certain restrictions will remain upon those who live in price-capped, deed-restricted housing units in Avon.

“What we’re finding is that these older guidelines have strapped people in so tightly that they have not been reinfusing money (to make) improvements in the structures, and they’re falling apart,” said Jena Skinner, the town’s senior planner. “They’re also extremely undervalued, which is great for a buyer, but horrible for a seller, and really keeps people stuck in their units.”

Under the new guidelines, the town would have a hand in administering the transfer of these units, either directly from one owner to another, or from an owner to the town, and then the town to a new owner.

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“As we start to see more units that are this far below market value, by going through the town, it helps to prevent that there is side money off the record that could go with these kind of deals,” said Avon town manager Eric Heil. “We’ve seen that in other communities, where the housing disparity gets to be so great that there becomes a premium on these types of units.”

Comparing the Wildwood townhome units in Avon to the Miller Ranch Road units in Edwards, both of which are price-capped, deed-restricted housing arrangements, Eagle County Housing & Development Authority broker associate Patti Liermann noted that the Miller Ranch owners make significantly more improvements to their homes than the Wildwood owners.

“We see constant improvements to the appliances, the flooring. They’ll redo an entire kitchen, and it’s because they want to, because they get to have a little bit more money to play with, with the capital improvement allowance, and how the depreciation schedules work,” Liermann said.

Under the current housing guidelines from 1990-91, the Wildwood unit owners are only able to make capital improvements valued at up to 10 percent of the initial purchase price of their homes. Some units were purchased for $92,000, and have not changed hands since, meaning those owners are only allowed to make capital improvements of up to $9,200 per year.

“9,200 (dollars) doesn’t even get you an appliance suite if you need to replace all the appliances in the kitchen,” Liermann said. “So what we would like to do, in this document, is bring it up to date, so you have a rolling allowance that resets every five years.”

The rolling allowance would reset every five years to the current value of the home, with 10 percent of that updated number being permitted for capital improvement.

“So, if someone wants to replace the kitchen appliance suite, they have the money to do that, and it gets added back into the maximum sale price of the home,” Liermann said. This creates more financial flexibility for the homeowners, enabling them to increase the value of their unit while still being somewhat restricted in their spending, so as not to raise the value of the unit to that of a home on the free market.

The town is currently planning on engaging a weighted lottery system for selecting those that may buy the price-capped, deed-restricted units going forward. The initial qualifying criterion will likely be an income cap that has not yet been officially selected. Once an applicant is found to have met the income standards, they will be entered into a lottery with other applicants, with the possibility for three bonus points provided based on a set of criteria not yet decided on by town staff and council.

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Proposed at Tuesday’s meeting were the following criteria: Whether an applicant is employed and eligible for a loan, if an applicant has lived in Avon for a certain period of time prior to applying, and whether they work in Avon.

Though most council members and town staff were in favor of the weighted lottery, there was no complete consensus on the criteria for bonus points. While providing extra support to applicants who had been living locally in Avon for seven years or more appealed to Mayor Amy Phillips, Heil was in favor of a countywide standard.

“I think we need to be a little bit more regional thinking,” Heil said, pointing out that if each town in the county prioritized its own residents too much, it might have negative effects down the line.

Heil suggested he and Skinner will consider council feedback and return in two weeks with a finalized version of the document, including a flow chart to explain the lottery system.

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