Case against deed restrictions in Eagle County
Eagle County, CO, Colorado
Your article on free-market home values was totally absurd, one-sided and completely void of merit. Why didn’t you interview a local real estate broker or an appraiser instead of Don Cohen, who being such an advocate for taxpayer-subsidized, deed-restricted housing, would of course try to cast a favorable light on these so-called affordable-housing units?
As an appraiser in this valley for over 18 years and a broker for over 25 years, I can tell you, based on hardcore black-and-white market data that deed-restricted homes are not gaining value more quickly than free-market property. At least not across the board, as indicated by Don Cohen.
Yes, there are some examples to support Mr. Cohen’s position, but I can point to many more examples of equity gains in many properties throughout Eagle County such as the Westin Riverfront Resort in Avon, Arrabella Square, many single-family homes in Singletree, East Vail, Bachelor Gulch, Wildridge, etc.
Yes, they are not appreciating at the rate that they were in 2001, 2002, 2003 and marketing times are extended over previous years, but to say that “right now, nobody’s equity is going up anywhere” is naive at best and lazy in terms of accurate research and reporting.
Your article claims that Don Cohen says that the values of affordable homes are “often capped.” If fact, the value of affordable homes in Eagle County are always capped!
In Miller Ranch it is capped at a 3 percent maximum per year. This 3 percent is not guaranteed as your article seems to imply. It is subject to market conditions, much like the free-market homes. And if there were 20 -30 people in line for deed-restricted homes a year ago and today there are only four people in line, what does that tell us? How about it is now extremely more difficult for people to get financed on these personal income/deed restricted properties?
Furthermore, for Alex Potente, the Eagle County housing director, to claim that deed-restricted properties are a better investment and have fewer transaction costs reveals a director to me who should find another line of work! These taxpayer-subsidized houses are not now, nor should they ever be in the future, perceived as investments and the same transaction costs are incurred by the purchaser as with any other free market transaction; i.e., loan origination fees, tile commitments fees, appraisal costs, surveys, etc. The only so-called transaction cost that one typically does not see on a deed-restricted sale is a Realtor commission, which is typically paid by the seller anyway.
Mr. Cohen continues to refer to the collapse of the housing market and although this is accurate on a national level, there is no market data to support a collapse of the housing market in Eagle County, although Mr. Cohen didn’t claim there was. However, by his own account he states that over the past three-four years, returns of free market housing has been 4-5 percent. This is a little on the low side but it is still higher then the legally allowed 3 percent return on deed-restricted housing. So can someone please explain to me how deed-restricted housing is a better investment as claimed by Alex Potente?
Clearly this article is to champion the cause of deed-restricted housing. Personally, I think deed-restricted housing has its place in Eagle County, but there are many hard-working citizens here who feel that they work their tails off (insert two-three jobs at a time here) to pay for their own free-market housing and then have to turn around and help pay for taxpayer-subsidized, deed-restricted housing. A true “double whammy”
The divide between wages and area home prices has been going on since the ’70s and we are still here! We don’t need to spent taxpayer money on yet another consulting company from Crested Butte to inform us of this over and over again. We got it the first time!
The bottom line is that if you want to live in these mountains, you have to earn it, you have pay for it. It doesn’t not come cheap and it certainly doesn’t come easy. Nobody has a God-given right to live here, although the current self-entitled generation would differ.
Good luck to all of us.
Certified Colorado Residential Appraiser