County ponders deed-restrictions for Berry Creek housing
Menconi said he would like to see the deed-restriction cap set at 3 percent a year, not a floating cap of between 3 and 6 percent, as proposed in a draft of a deed-restriction agreement that county commissioners are reviewing.
Prices for the 282-affordable home project at the Berry Creek 5th in Edwards, range from the $120,000s to the $260,000s.
“I’m opposed to that floating cap,” Menconi said. “It’s critical to our county to hold the affordable housing as low as possible – in perpetuity.”
Property value in Eagle County has increased 30 percent in the past 10 years compared to 5 percent for wages, reports the county Department of Housing. The proposed cap would float according to the average increase of wages in Eagle County. If the U.S. Bureau of Economic Analysis determined that the average wage in the county is greater than 6 percent in a given year, the percentage increase for resale of a home in Miller Ranch would be 6 percent for that year. If it is less than 3 percent, the percentage increase would be 3 percent.
County attorneys drafted the agreement directed by the county commissioners.
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“This is one of the most significant events for the future of our county,” Menconi said. “This could be our last opportunity to hold a number of properties affordable for the future. Helping people build equity isn’t our government role.”
For fellow Commissioner Michael Gallagher, the floating cap between 3 and 6 percent sets reasonable limits.
“We didn’t want it to get crazy,” Gallagher said. “The proposed caps won’t help people build too much equity.”
But Menconi said the caps will do just that, offering the following examples:
– In a three-year period with a cap of 3 percent, a $210,000 home put back on the market would be priced about $218,000.
– With a 5.5 percent cap, the same home would cost $263,000.
“After 10 years, that (difference) jumps to $72,000, if the cap stays at 5.5 percent,” Menconi said.
Gallagher said the cap should grow with salaries.
“If we do 3 percent, wages go up and the cost of housing goes down,” he added. “Miller Ranch will have products to serve everybody.”
Menconi, however, said not everybody’s wages go up at the same rate.
Salaries have grown in Eagle County at an average annual rate of 4.8 percent from 1990 to 2000, reports the Eagle County Department of Community Development.
“And in a bad economy, salaries don’t go up at all,” Menconi said.
The town of Vail, if it remains a partner with Eagle County in the Miller Ranch project, would like to see a 3 percent cap, the same deed restriction existing in Vail, said Mayor Ludwig Kurz.
Vail is considering a $1 million offer from Eagle County to step out of the Berry Creek 5th project. The agreement would leave Eagle County and ASW Realty Partners partners in developing Miller Ranch. If the town decides to stay in the project, it could set its own deed restriction for 50 percent of the homes.
“The trend of workers commuting to Eagle County continues to grow each year,” Menconi said. “My goal is to maintain 20 years down the road a housing inventory that people who work full-time in this community can afford. This will insure a sense of community for all.”
Veronica Whitney can be reached at 949-0555, ext. 454, or at email@example.com.