With new affordable housing coming online in Eagle, experts recommend a way to make units more accessible to locals
Giving locals an option to avoid real estate transfer assessment fees could save them thousands
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The town of Eagle will soon add 18 new price-capped units to its Local Employee Residency Program as the first phase of the new Haymeadow development nears completion.
Haymeadow’s first phase consists of 76 units, all of which are deed-restricted, with Eagle County having 43 units and the town of Eagle controlling the other 33 units.
Of the town’s 33 units, 18 will be price-capped with a 0-3% price appreciation cap, which is based on the consumer price index. A price-capped home purchased in Eagle in 2020 for $417,800, for example, could be sold for a maximum of $467,240 in 2024.
Starting affordable, staying affordable
Many of the 106 units in Eagle’s Local Employee Residency Program are price-capped, according to the Valley Home Store, which administrates the program for the town of Eagle. Price capping is an effective tool in keeping home prices affordable in Eagle County, according to the Home Store.
“These units are coming on the market affordably, and then they’re really staying pretty affordable,” Kim Bell Williams with the Home Store told the Eagle Town Council in July.
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The turnover is low on those units, with an average sale of one per year in Eagle. That’s because once people get in those units, they tend to stick around longer, Williams said, with deed-restricted homes retaining owners for an average of 10 years, as opposed to seven years for non-deed restricted homes.
Homes sold in the Haymeadow development will be subject to a real estate transfer assessment of 2%, with 1.4% going to the Haymeadow metro district and HOA, and the remaining 0.6% going to the town. The deed-restricted units in the Haymeadow development will be the first units in the town’s Local Employee Residency Program which are subject to a real estate transfer assessment.
On a $400,000 home, the real estate transfer assessment represents an extra $8,000 that potential owners will need to come with, Williams told the Eagle Town Council in July, with $5,600 going to the Haymeadow metro district/HOA and the remaining $2,400 going to the town.
“Based on our history and turnover, we estimate that over a 20-year period, these 18 LERP Haymeadow units would potentially be five transactions total, and that would bring in a total of $12,000 to $15,600 in revenue over 20 years,” Williams said. “So we’re not talking about a lot of units, and we’re not talking about a lot of money. But we are talking about a new thing that’s hitting your program that we need for you to be aware of and understand the impact to the buyer pool.”
Can town help locals with real estate transfer assessment?
Williams said buyers looking to purchase one of Eagle’s 18 new price-capped units will have a difficult time coming up with the additional $8,000 for the real estate transfer assessment.
“I think that would exclude a large number of buyers from purchasing these particular units,” she said.
The solution, Williams said, could be for the town to offer locals a way out of the real estate transfer assessment, or at least the town’s portion of it.
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Williams urged the council to “start thinking about an exemption to the town’s portion of the RETA, and putting that in place,” she said. “Because we know that it’s challenging for buyers to come up with cash in this market, and I don’t see that changing anytime soon.”
With the Haymeadow units expected to hit the market in the next month or so, “this would be something for you to start thinking about now,” Williams said at the town’s July 9 meeting. “Put yourself back in the place where you bought your first house, and how much cash you could save up.”
