Details emerge in Vail’s plan to create worker housing
By the numbers
1,000: The number of deed restrictions the Vail Local Housing Authority wants to purchase in the next decade.
$3.6 million: First-year funding for the plan.
$5 million: Approximate annual cost beyond the first year.
90 percent: Occupied homes in Vail that become unoccupied upon sale.
VAIL — This town’s new housing plan takes a new approach to preserving workforce housing. But that new approach has raised plenty of questions.
Members of the Vail Local Housing Authority Tuesday afternoon met with the Vail Town Council to talk about some of those details. The biggest of those details are how much the town should pay, who should write the check, and what those restrictions will ultimately look like.
Taking the last question first, the housing plan envisions a new kind of deed restriction. Those restrictions in the past have usually involved caps on appreciation, and working in Vail or Eagle County, as well as restricting buyers’ ability to own other real estate.
In the case of the new restriction, there’s only one requirement: working in Eagle County for an average of 30 hours per week throughout the course of a year.
The appreciation caps would go away. But, since a property would be restricted in who can own the unit in perpetuity, that would affect the value in future sales.
Here’s one way that system could work:
If a prospective home buyer can afford the mortgage payment on a unit, but not the down payment, then the town could provide the down payment in exchange for a permanent deed restriction on the property.
In a phone conversation Wednesday, Vail Community Development Department Director George Ruther said property owners could also sell deed restrictions before a sale. For instance, a condo resident facing a homeowners association special assessment for a new roof or driveway could sell a deed restriction to the town to raise some needed funds.
At Tuesday’s meeting, council member Jenn Bruno questioned how much those restrictions would cost, and what the town’s maximum threshold for payments would be.
“We need more parameters … this is a little too arbitrary,” Bruno said.
Housing authority board member Molly Murphy said the market will determine what the town pays for deed restrictions.
“We really want to get a fair market survey done,” Murphy said. That way, the housing authority would have a rational basis for spending different amounts on deed restrictions.
‘Leap of Faith’
Just how much those payments might be is hard to determine. Ruther said there may never be hard and fast rules.
“The purchase of a deed restriction is a purchase of an interest in real estate,” Ruther said. “Fair market value is having a willing seller and a willing buyer.”
At the Tuesday meeting, Mayor Dave Chapin acknowledged that the new system requires “a leap of faith.”
But, he added, “What we’ve been doing hasn’t worked.”
There was also some concern from the council about running deed restriction purchase decisions through the housing authority. The idea is that the authority board could act more quickly than the town council.
“I’m comfortable shifting (spending authority) to the housing authority,” council member Greg Moffet said. But, he added, the housing plan’s mission does need some adjustment. If the idea is to simply buy deed restrictions, then the end result will be the smallest number of units and bedrooms.
Council member Kim Langmaid said she wants very careful tracking of the program in its first year. But, she added, she sees little risk in the first year.
That risk to Vail taxpayers is diminished because the first-year funding comes from a long-standing fund developers have paid into throughout the years. Draining that fund will provide roughly $3.1 million of the first year’s $3.6 million in spending.
Vail’s taxpayers will be on the hook in future years, though, which has led Moffet and other town officials to start lobbying for a possible property tax increase on the 2017 fall ballot.
Valley resident Lee Fabricius and Nate Hall, a broker with Berkshire Hathaway HomeServices Colorado Properties, attended the Tuesday meeting.
Fabricius said he’d be eager to participate in the program as a buyer.
“We’re ready to go whenever you are,” Hall said.
Town officials will draft a resolution nailing down responsibilities for the program’s first year. That resolution will be on the council’s Nov. 15 agenda.
Vail Daily Business Editor Scott Miller can be reached at 970-748-2930, email@example.com and @scottnmiller.
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