Is Vail’s approach to deed-restricted housing meeting the need? |

Is Vail’s approach to deed-restricted housing meeting the need?

Employee housing versus ‘affordable housing’ versus ‘attainable housing’ and why new employee units highlight misconceptions around deed restrictions

The new Altus Vail development offers workforce housing through 15 deed-restricted units set aside for tenants who work in Eagle County or who work remotely for businesses that do work in the county.
Carolyn Paletta/Vail Daily

In 2017, the town of Vail changed its terminology – and its approach – toward solving the housing crisis in a way that it says addresses the need among workers of various income levels but that, to some workers, misses the mark.

The town’s new housing plan launched in 2017 placed an emphasis on deed restrictions — promising the purchase of 1,000 units over the subsequent decade — used to set aside employee housing as well as “affordable” or “attainable” housing. However, these two sets of restrictions do not always go hand in hand, and the labels can be confusing.

The new Altus Vail development, for example, offers 15 units set aside for Eagle County employees, although the deed restriction also includes remote workers whose companies do business in the county.

Katie Schreiber, who works in Vail, has struggled to find housing locally. She toured one of the units, which have been marketed as workforce housing since the project was approved back in 2017. She balked when she saw that a 400-square-foot studio was going for over $2,700 a month plus a $200 per vehicle parking fee.

“I just think it’s crazy that it was allowed to be considered employee housing and that they even remotely thought that they would get those units filled with actual employees,” Schreiber said.

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Each day, Schreiber drives over Vail Pass from her home in Breckenridge to get to her job at the Ritz-Carlton Club in Vail, a trek that becomes perilous — and sometimes impossible — in the winter.

“It is stressful,” she said. “It’s happened a handful of times (that) I’m not able to make it to work or I’m not able to make it home and I stay at a friend’s.”

She and her husband have been wanting to relocate to Vail to be closer to her work, but finding housing just seems impossible, Schreiber said.

“It’s just crazy how fast things go … it’s just not going to happen. There’s nothing even remotely affordable,” she said. “It’s just — it’s so hard.”

Mixed messaging

Schreiber is not the first person to have seen an advertisement for “employee” or “workforce” housing and assumed it would be affordable for your average worker.

The median household income in Eagle County is $84,790 and the median “per capita” or per person income is $44,391, according to data from the U.S. Census Bureau. This boils down to a median per person income of just under $3,700 a month before taxes.

Which begs the question: Should the deed-restricted units at the Altus Vail — Vail Village’s first major development in 10 years — be marketed as workforce housing if your average local employee cannot afford them?

The Altus is a private development on the free market in an area with very valuable real estate, Vail Housing Director George Ruther said. It is the prerogative of private developers to make a profit on their investment.

It is not their job to provide affordable housing, Ruther said. The terms of Altus’ deed-restricted units simply say that those 15 apartments, ranging from over $2,700/month for the cheapest studio to nearly $6,000 for a higher-end two bedroom, need to be occupied by local workers.

Market pressures will correct those prices and may end up driving them down a bit before the company finds tenants to fill them, which the agreement says they must do sooner rather than later, Ruther said.

The manager of East West Hospitality, the Altus Vail’s property management company, said three units have been rented thus far and two more are in the process of being rented, meaning they have found tenants for one third of the units since they went on the market a few months ago.

“We’re thinking we’re in pretty good shape,” said Eric Walz, the manager of East West Hospitality. “Obviously, it’ll be kind of a slow burn.”

The new Altus Vail development offers workforce housing through 15 deed-restricted units set aside for tenants who work in Eagle County or who work remotely for businesses that do work in the county.
Carolyn Paletta/Vail Daily

Part of the confusion with Schreiber and Altus is due to a lack of community awareness on the difference between employee housing and “affordable” or “attainable” housing — two terms used by the town of Vail, although the town has recently shifted toward the latter.

The missing middle

Still, the more important issue is, and has always been, whether deed restrictions are working to meet the current need for housing in Vail and throughout the county.

Altus is “15 units in a market that needs somewhere around 2,500 units to meet our need,” said Chris Romer, the president and CEO of the Vail Valley Partnership, the valley’s regional chamber of commerce. “It’s a tiny fraction of what’s needed.”

The county utilizes what is called the “area median income” in calculating rent and mortgage costs for various affordable housing developments in accordance with guidelines set out by the Colorado Housing and Finance Authority, Eagle County Housing Director Kim Bell Williams said.

Eagle County’s area median income is $70,000 for one person and $100,000 for a family of four, according to the guidelines. This means the 2021 monthly rent limit for affordable housing prices should be set at $1,875 for a one-bedroom, $2,250 for a two-bedroom and $2,600 for a three-bedroom including utilities and fees.

These numbers represent calculations based on 100% of the local area median income, the percentage of which can be scaled up or down based on the need that a particular deed-restricted project is trying to fill, Bell Williams explained.

Rent rates for the Riverview apartments in Avon, for example, were calculated at 60% of area median income or an annual income of $42,000, which is much closer to the county’s median per person income as calculated by the U.S. Census Bureau.

Other income-based deed restrictions, like a portion of the Spring Creek Village units in Gypsum, allow for applicants with income levels up to 120% of area median income, Bell Williams said.

Bell Williams said she could not speak to why the area median income calculated by the U.S. Department of Housing and Urban Development differs so greatly from the median per person income shown in Census data. The two numbers are likely pulled from different data sets with various factors at play, she said.

The town of Vail’s 2017 housing plan came with an acknowledgment that there was not only a need for affordable housing for local service workers and seasonal employees on the lower end of the income scale, Ruther said.

A market study conducted in advance of the Chamonix development in West Vail showed that high wage earners could afford prices offered by private developers on the free market and that low-income employees had access to section 8 housing supported by low-income housing tax credits from the state.

So, the town shifted its attention to providing more “attainable housing” to support what Ruther called “the missing middle.”

“They were the folks that were neither the seasonal worker nor the high wage earner year-round professional, but the folks that were making their way and trying to get a foothold in the community,” Ruther said.

That is where this new term of “attainable housing” came in, which looks something like the deed restrictions on the Chamonix development.

Chamonix “was not intended to be affordable in the sense that it was restricted to a certain area median income,” Ruther said. But just by restricting deeds to local workers, the appraised value of the units went down 20% compared to what they could have been sold for, he said.

While affordable housing is informed by strict calculations around median income and percentage of income that should go to housing, Vail’s “attainable housing” is not informed by any specific numbers to determine what is attainable to middle class workers. Instead, the approach uses deed restrictions to reduce competition and place downward pressure on free market prices so they are accessible to more people, Ruther said.

The town began this new approach with a total of 688 deed-restricted units/homes, Ruther said. Now, at the halfway mark of its goal to increase this number by 1,000 over 10 years, the town has a total of 1,025 deed restrictions.

Countywide, of course, this number is much higher, but the county does not have any income-based deed restrictions on for-sale properties — only rentals, Bell Williams said. Low-income individuals have little government support in buying a home beyond the county’s down payment assistance loans.

Bridging the affordability gap

Bell Williams agreed that we need higher-end workforce housing like Chamonix and Altus Vail as well as more affordable options like Timber Ridge or the Residences at Main Vail that are created out of innovative public/private partnerships.

But wait lists for section 8 housing like Riverview in Avon grow longer by the day and low income housing tax credits from the state are simply not enough to meet the need, she said, a point to which Ruther agreed.

The stakes are often higher for lower-income employees who cannot find housing. While a middle-class employee might prolong moving their family out of a two-bedroom apartment or choose to relocate, a low-income family might move into a trailer or small home with another family to split the rent. A seasonal worker might choose to live out of their car for a while or rent a room at a local motel.

“I don’t think we can ignore or disregard any one segment over the other,” Ruther said. “I think we have to do our best to try to make inroads into each one of those segments of the market to have a complete and full community.”

The town of Vail has limited resources when it comes to land and funding, so prioritizing future land use is crucial to solving the problem, Ruther said.

When it comes to publicly-owned land, the town should be doing everything in its power to provide a mixture of affordable (something like Timber Ridge) and attainable (something like Edwards’ Miller Ranch) housing to support its workforce, Romer said.

These kinds of projects will be aided by a new 0.5% sales tax increase for the creation of a workforce housing fund, which was approved by Vail voters last month, along with a similar tax on short-term rentals in Avon, Ruther said.

When it comes to private land, the town should be using its power over planning and zoning processes to create an environment for private developers that is more conducive to deed restrictions based on local employment as well as affordability, Ruther said.

On the zoning end, this looks something like Avon’s recent creation of a community housing district, which only allows for deed-restricted housing and, thus, inherently drives down the cost of that land.

It also involves building more high-density housing in a strategic way and streamlining the approval process to reduce the cost developers face in coming before municipal boards, Ruther said.

Increasing efficiency and reducing costs for private developers that are within the town’s control increases their ability to offer deed-restricted housing for less.

“I can’t make a contractor pay his workers less … but there are things that we can do as municipalities to begin making land available for deed-restricted development in the future,” Ruther said.

Without the support of the private sector, public entities like Eagle County government or the town of Vail will not be able to overcome what Ruther and Bell Williams referred to as the “affordability gap,” the burden of subsidizing affordable housing in a, shall we say, less-than-affordable market.

“At the end of the day, we need the political courage to get things accomplished,” Romer said. “And that might mean looking closer at how we manage short-term rentals, that might mean … investing more to help people with their down payments or more deed restrictions.”

“It’s a tough equation,” he added.

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