Keeping Eagle "affordable’
Jones, a firefighter with the Greater Eagle Fire Protection District, is a first-time home-buyer. He and his wife, Dominique, purchased a condo at Founder’s Place in Eagle Ranch last year. It’s a tight fit, with two adults, a baby, two dogs and a cat living in a unit of slightly less than 1,000 square feet. Still, the young family is pleased to be able to own a place.
Jones and his family bought a deed-restricted unit at Eagle Ranch using a program ranch developers and the town hammered out during that project’s lengthy annexation process. Future developers in the town will be subject to a similar requirement. Last summer, the Eagle Town Board approved a set of affordable housing regulations that require developers of new residential projects to reserve 10 percent of their properties for a deed-restriction program aimed at holding down housing costs.
The town’s new regulations will be used for the first time at the Bluffs project at the east end of Third Street. Masthead Development will be required to built 14 deed-restricted, single-family homes there. Town planner Paul Clarkson said those homes must be priced at or under $232,000. In the town of Eagle, the median price of a home of any kind was just more than $278,000 in 2000. County-wide, the median price of all housing units for sale was around $350,000 in 2001.
Stuart Borne, president of Masthead Development, said his firm will participate in the project, but with reservations. His firm is developing the Bluffs as a land-only project, in which the company builds streets and installs water, sewer and other infrastructure, he said, then leaves actual home construction to lot buyers. With that level of involvement in the project, Borne said his company would have preferred to offer deed-restricted lots rather than homes.
On the other hand, he added, the town needs housing stock to have an affordable housing inventory, so he understood the town’s perspective. Still, Borne said, the ordinance could use some work, at least from his perspective.
“If you’re not developing product, you shouldn’t have the impact requirement,” he said.
Borne described Eagle’s ordinance as a “good first shot.”
Home-buyers who acquire a deed-restricted unit will be able to get in at a good price, but won’t be able to participate in the valley’s healthy price appreciation. Units governed by the town’s program are limited to a maximum appreciation of 3 percent per year. The appreciation rate is tied primarily to the Denver-Boulder Consumer Price Index.
That “hard” appreciation cap is the most commonly used method to keep home prices reasonable for the next buyer, and seems the most successful. Eagle County officials a few years ago tried a more flexible restriction at condominiums at the Riverwalk project in Edwards. That restriction requires sellers of those units to offer them exclusively to Riverwalk employees for 30 days, then only to county residents for the next 90. Eagle County housing Director David Carter said appreciation has been “significant” at the Riverwalk units over the past few years, so that flexibility hasn’t kept prices down.
A two-bedroom unit at Riverwalk is currently on the market for $170,000. Similar units were being offered in the $120,000 range in the mid-1990s.
By contrast, the hard cap does keep prices down. When the first deed-restricted townhomes in Avon’s Wildridge area came on the market more than a decade ago, the units were priced in the low $70,000 range. Tambi Katieb of the Avon Community Development Department said one of those units recently sold for just more than $100,000.
Tired of paying rent
Gypsum resident Bill Kaufman was one of the first buyers in the Wildridge project. After a few years in the valley with the Eagle County Sheriff’s Office, Kaufman purchased the place in partnership with a friend. After Kaufman was married, he and his wife, Sally, bought out the friend’s share and lived in the home for another several years. A few years ago the Kaufmans sold their home, took their modest profits and purchased a single-family home in Gypsum.
“It worked out well for us,” said Kaufman. “Mostly, it was a way to stop paying rent.”
Even limited appreciation is better than simply writing rent checks, he said.
“I wouldn’t do it again unless I was starting over,” he said. “But for a first-time buyer, they’re (deed restrictions) great.”
Like Kaufman, Jones said he was tired of paying rent and wanted to start building equity, even at a modest clip. And, he added, the purchase price in the low $160,000 range, was something he and his family could afford.
While the existing deed-restricted homes in Eagle have sold quickly, Gary Martinez, general manager of Eagle Ranch, expressed some reservations about marketing similar units in the future.
“There’s so much new (deed-restricted) housing going in upvalley,” said Martinez. “Will we have as much demand for these units as we thought?”
Town planner Larry McKinzie, though, said the intent of the program was to provide entry-level housing for those who live and work on the western end of the valley.
Eagle Ranch isn’t governed by the town’s new ordinance, but does have similar requirements to meet as part of it annexation agreement with the town. Eagle Ranch has already built and sold several condos in the $160,000 range. The firm will end up building about 60 affordable units, including a handful of single-family homes, in the “neighborhood center” part of the development. In addition, Eagle Ranch has set aside 20 percent of its real estate transfer fees to contribute to a town-wide affordable housing program. Even when the development company’s obligation to build units is finished, the transfer fee will ensure at least a small steady stream of income into the fund.
The Eagle Ranch units – all at or around 1,000 square feet with outdoor storage – have sold well. The first units were snapped up quickly and there’s been plenty of interest in future units, Martinez noted.
While there are some questions about the marketability of deed-restricted units down the road, Martinez, the former town manager of Breckenridge, said participating in a housing program is just part of doing business in the area.
“It’s a requirement. It’s important for the community to do this,” he said. “Does that mean it’s easy? No. It’s clearly a subsidy we have to pay to do business here, and we’re looking forward to completing our obligations.”
This story first appeared in the Eagle Valley Enterprise.
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