Program seems to help first-time home buyers
EAGLE ” How does a working family afford a home in Eagle? That’s no small question.
The community has traditionally been the place where Eagle County’s working people ” small business owners, resort area mid-management employees, teachers, firefighters, tradesmen and other professionals ” could afford to buy.
But a quick glance through newspaper real estate ads reveals that even folks who make a good wage may have trouble getting into the Eagle market. This week, the lowest-priced single family home is $549,000; and duplex and condo units are in the $295,000 to $599,000 range. There’s plenty of homes in the $1 million and up category.
Homeowners who are moving up ” cashing out on homes that increased in value ” may find Eagle real estate is still attainable. But how does the first-time homeowner get a foot in the door?
For many people, Eagle’s workforce housing programs have been the answer.
Eagle Planner Bill Gray notes there are 86 deed-restricted units in town.
“These programs are at least offering housing a family can afford,” he said.
Deed restrictions limit the amount of home-value appreciation to a maximum of 3 percent per year. As a result, the median sales price for units in the program is $237,500 ” much lower than the average free-market sales price.
While the program helps buyers get into a home at a cost that’s far lower than the going rate, they can’t ratchet up the price for the next buyer. For instance, $218,000 would be the maximum 2007 sales price for a unit purchased in 2004 for $200,000 even if neighboring, virtually identical units are now selling in the $400,000s. The intent is to keep affordable housing affordable, beyond the first buyer.
Eagle’s first experience with workforce housing was with the Eagle Ranch development.
As part of the development’s approval, the town instituted a 1-percent real estate transfer tax on all transactions in Eagle Ranch.
The 1 percent tax, which anyone purchasing an Eagle Ranch home must pay, is split three ways, with 0.2 percent going to the Eagle Ranch Housing Corporation. The housing corporation was charged with providing 70 deed-restricted units in the 1,100- unit development.
The corporation, which includes three representatives appointed by Eagle Ranch and three appointed by the Town of Eagle, uses the real estate transfer money to purchase units at a particular price, and then make these units available to buyers. The corporation also has money available for a down-payment assistance.
The 70 deed-restricted units in Eagle Ranch are scattered around the neighborhood center part of the subdivision. Units can be found in the Founder’s Place condominiums, Gamble Street townhomes, West Village units, the Orchards, Village Homes and Aidan’s Meadow. Additional units will be located in the Brush Creek Village neighborhood, being built on the east side of Brush Creek Road.
Under the terms of the Eagle Ranch workforce housing program, potential buyers must live and work in Eagle County and be pre-qualified for a home loan. The units are advertised as they become available. According to Gary Martinez, general manager of Eagle Ranch, finding buyers hasn’t been a problem.
“Some of the Founder’s Place units have turned over three and four times already. In fact, one of those units recently sold for the fourth time at a price under $200,000,” he said, noting that a similar unit was listed in the $300,000s.
Key elements for success with the Eagle Ranch program include the housing corp’s funding source and the variety of homes to choose from.
Because the housing corp has money available, it can negotiate with builders to pre-purchase still-under-construction units. That’s a good scenario, said Martinez, because a builder gets a guaranteed sale up front; and the housing corp gets a good price because it buys early.
With a fund balance hovering around $500,000, Martinez said that in the future the corporation could reach out beyond the boundaries of Eagle Ranch ” such as partnering with the county or town on an affordable housing project.
The town of Eagle adopted its own workforce housing program in November 2003. The Eagle program requires that 10 percent of the units in any new development be deed-restricted. People who live and work in Eagle are moved to the top of the wait list. Like the Eagle Ranch program, potential buyers must be pre-approved for a home loan.
There are currently 14 units available in the town program, and a wait list with 20 names. When multiple buyers are tied for the same unit, a lottery determines the purchaser.
Gray said the biggest criticisms of deed-restriction programs ” that buyers lose out in the long run because they can’t realize full appreciation for their units and they will have a harder drumming up interest when they do decide to sell ” hasn’t dissuaded buyers.
“Nobody has any problem any more selling a deed-restricted unit,” said Gray, pointing to the town’s wait list, “and we have only had four re-sales in three years.”
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