Home Economics: A series on housing issues in the Vail Valley
The Vail Daily is launching an in-depth reporting project that we’ve decided to call “Home Economics” — a five-day series that focuses on housing issues throughout the valley.
Pam Boyd, the reporter who had the idea for the project, also came up with the name, which is pretty self-explanatory: The valley’s affordable housing crunch is all about supply and demand.
There just aren’t enough places for working-class folks to live in this valley, which makes it hard for employers to attract and retain talented workers. That creates numerous other problems — notably the downvalley and upvalley shuffle for workers commuting to their jobs, which creates parking and traffic issues.
The series will explore how affordable housing has been an issue since Vail’s inception and how the problem has grown over the years. It will also take a look at employers who foresaw a growing problem early and got ahead of the curve. We’ll also look at what local towns are doing to help solve the issue, and we’ll delve into just what you can get for $500,000 on the open market in Eagle County.
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The Missing Middle: Eagle County’s housing market freezes out mid-income residents
It shouldn’t be so hard for Rick and Colleen Gregory to find a house.
It probably wouldn’t be, if they weren’t looking in Eagle County. The couple has a combined annual income of around $110,000 — which puts them slightly above the Eagle County average median income of $105,000. Rick has worked for the town of Vail for 19 years and while Colleen has only been in her current job for a couple of years, she has lived and worked in the valley for almost 17 years.
The Gregorys have homeownership history, having previously purchased residences in Avon and Gypsum. They won’t have to cobble together a down payment or convince a lender that their credit is up to snuff.
But their housing search isn’t going well and it isn’t the first time the Gregorys have faced this problem.
From the editor: A spotlight on housing issues
My wife and I bought our first home in June. We’d scrimped and saved for years for a down payment and then found a real estate broker who knew exactly what we wanted. She managed to get us in the door for the first showing of a townhome in Eagle Ranch that was going to be listed the next day. After one walkthrough, we offered the seller full price on the spot.
Undoubtedly, in this valley, we’re the lucky ones: Lucky that I had an employer who gave us temporary housing for six months so we could get market-savvy. Lucky that both sets of parents floated us some extra money to get the whole deal done. Lucky that we even found a place we could afford — and that our offer was the winner.
We are thankful every single day. But there are way too many people in the Vail Valley like us, with good jobs and a passion for this community, who can’t solve the housing riddle.
Decades in the making: Vail Valley’s workforce housing crisis has been building since the beginning
The front page of the very first issue of the short-lived Daily Trail newspaper said it all back in late June of 1998: “Gore Creek ghost town: The changing face of Vail.” The story launched a five-part series on the affordable housing crisis and chronicled the runaway real estate industry and the hollowing out of Vail’s year-round community with 70% second homeownership.
The ensuing two decades have seen very little progress in terms of slowing the downvalley exodus of year-round residents in search of cheaper land and lower home prices. In fact, things have only gotten worse, with Vail’s rate of second homeownership now at 80% — and an identical 80% of employers saying lack of housing is hurting their ability to hire workers.
On that very same front page was a photo of three generations of Seiberts, including Vail founder Peter Seibert, his son Pete Jr. and grandson Petey. Pete Jr., a realtor, recently moved back to Vail and lives in a town-subsidized affordable housing complex known as Chamonix Vail. In November, he narrowly missed being elected to Vail Town Council running on a platform supportive of the town’s innovative Vail InDEED voluntary deed-restriction program.
And in the upper right corner of that first issue of the Daily Trail was a photo of one of Vail’s founding mothers, Diana Donovan, teasing a story about her opposition to an affordable housing plan on town-owned land known as Common Ground and spearheaded by then-Mayor Rob Ford. That opposition, in part, led to the failure of that ambitious housing plan and the resignation two years into his four-year term of Ford — a move that made national headlines.
Housing done right: Some employers are meeting Vail Valley’s housing challenges, and most started years ago
Everyone sees the valley’s housing problem. A few, though, did something about it.
The Sonnenalp Hotel’s Faessler family got it right on two continents.
“We had an employee housing problem decades ago. It has never gone away. Sometimes it’s less urgent, but it’s always there,” Johannes Faessler said. “We recruit from overseas. There is virtually no way to recruit people from another place or another country and expect them to find housing in Vail.”
Their Sonnenalp resort in Germany opened as a bed and breakfast in the early 20th century. Because it’s well away from any town, they’ve provided staff housing for decades.
“It was always part of the need to have people housed there. That was part of our DNA,” Faessler said.
They opened the Sonnenalp in Vail 40 years ago in Dec. 1979. It became apparent quickly that they needed somewhere for their staff to live.
“As we grew, the housing piece had to grow with us,” Faessler said.
Good deeds: Vail InDEED program catching attention elsewhere
VAIL — The Vail InDEED program started during a lunch meeting. The program is now expanding into other mountain resort communities.
The lunch meeting was between George Ruther, then Vail’s community development department director and now-housing department director, and Steve Lindstrom, the longtime chair of the Vail Local Housing Authority. Ruther and Lindstrom have lunch together fairly often.
On this particular day, Ruther was bemoaning the limited number of deed-restricted homes in town that come up for sale every year. The town will buy a unit or a few every year and put those into its deed-restriction program. But it turns out that what’s available often doesn’t meet the needs of eligible buyers.
Ultimately, Ruther asked, “Why can’t people just buy their own houses and we’ll buy the deed restriction?”
And that’s how the Vail InDEED program was born.
No vacancy: Deed restrictions are the weapon of choice for governments in the fight against vacant homes
Across the country’s most desirable areas, which certainly includes Eagle County, houses are providing something other than housing, and residences are owned by something other than residents.
Many of the nation’s marquee housing opportunities have become investment properties, and their ownership histories look more like a commercial area than a residential zone district. Banks, LLCs, private equity firms and real estate speculators have assumed the role of the proud homeowner.
As people began to realize that many of the residences in their communities were not being occupied by community residents, an idea emerged: Perhaps there’s something governments can do to ensure new houses become used for housing. In approving developments planned in their districts, deed restrictions became a go-to answer to the question of how to accomplish such an idea.
A little help: Down payment loan programs are helping locals get into the market
EAGLE COUNTY — Nicholle Jackson has been busy the last couple of years. That means people are buying homes.
Jackson is a broker at the Valley Home Store, the county’s workforce housing clearinghouse. Jackson and others at the Home Store work with potential buyers trying to purchase a home.
While qualifying for a mortgage is harder than it was in 2007, loans are more available than they were in, say, 2010. But the Home Store has a powerful tool to get people into homes: the Eagle County Down Payment Assistance Program.
That program makes loans of up to $15,000 for qualifying buyers. If a buyer has $7,500 to put into a home purchase, that buyer can borrow up to another $15,000 from the program. The ratio is one part buyer funds, two parts assistance loan. That means someone with $5,000 could qualify for a $10,000 down payment assistance loan.
Those loans mature either in 15 years or at the sale of a property. If a property appreciates by 10% over that time, the borrower repays the loan amount plus 10%. If a home loses value between purchase and sale, only the principal is due.
The program has been popular the past couple of years, with 50 loans written in 2018 and another 46 this year as of Dec. 2.
Funding for the program is provided by a combination of grants and repayments from previous borrowers. Jackson said Eagle County for 2019 provided a matching grant of $250,000. Donors including local banks, towns and employers matched that amount.
The $500K question: Here’s what half a million will buy you in the Eagle County real estate market
Buying a home is one of the biggest decisions you’ll make in your life. In a tight housing market, like Eagle County, actually finding a house is perhaps even harder than hammering out all the financial details of what you can afford.
“Inventory is at a 10-year low. That is a really key component to the amount of listings that are available to people under [$500,000],” said John Pfeiffer, president and employing broker at Slifer, Smith & Frampton.
He added that the Vail Valley’s seen a stable, healthy economy since the recession in 2008.
“The good news is, a lot of the inventory we had a few years ago has been purchased. A lot of buyers stepped into the market and a lot of those listings are now gone,” he said.
Despite the relatively slim pickings, Pfeiffer stated that now is a great time to buy a house, for those considering, because interest rates are low and home values are increasing at healthy rates.
“Prices have not gone crazy in running up, so they’re not paying a peak price, and interest rates are at record lows. That’s a dream scenario for newer buyers,” he said.
The Vail Daily decided to see what $500,000 could buy in the Eagle County real estate market.
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