Vail housing purchases make units affordable for locals
Program intended to keep the town in the deed-restriction business
Town of Vail/courtesy photo
The town of Vail this week purchased three homes, bringing the total to nine so far this year.
The town bought two units in the Buffehr Creek condos and one in the Columbine West condominiums. The total purchase price was roughly $1.8 million.
The total town spending this year on the nine units is about $7.25 million.
9: Units purchased this year by the town of Vail.
$7.25 million: Total spent on those units.
$975,000: Purchase price of a Pitkin Creek condo.
$635,000: Sale price of that now deed-restricted units.
About $4 million of the money comes from collections from a new town sales tax, passed in 2021.
After voting to approve the purchases, Council member Kevin Foley made sure to thank town voters for passing that tax increase last year.
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The units will be offered for sale, then rented if they don’t sell. Part of the deed-restriction process includes a significant markdown in the sale price, combined with limiting appreciation to 1.5% per year.
The first unit the town bought, a family-sized unit in the Pitkin Creek condos, was purchased for $975,000. The unit is currently under contract for $635,000.
Adapting to the market
Vail Housing Director George Ruther said the purchase program was born from the valley’s real-estate boom of the past couple of years.
The town for several years had a program called Vail InDEED, in which the town absorbed some a home’s sale price in exchange for a permanent deed restriction.
But in the months when cash purchases became common, fewer sellers wanted to participate. A cash offer closes much faster.
Ruther said interest in InDEED has started to perk up as the market cools a bit. Council member Barry Davis called the program a kind of “InDEED plus.”
Ruther said the units purchased so far can be either resold or rented. The target markets are those who either for the town or work in town. The town, the one of the largest employers in the valley, currently has more than 30 vacant positions, roughly 10% of its staff.
In first pitching the idea of helping with a purchase, Ruther said the idea was to act “as the rich aunt or uncle.” That idea was discarded in favor of one that’s far more simple: just buy the thing, then resell it.
“Once we have the home, buyers can take the time they need” to complete a deal, Ruther said.
Ruther credited town leaders with taking the initiative in buying homes.
Davis said the current effort comes because the council “has locked on to the one thing we can agree on.”
More need than ever
The ever-increasing need for housing keeps growing, of course. Davis noted there were just more than 90 lottery applicants when the 32 Chamonix townhomes became available. Four years later, there were 40 applicants for a single unit that came up for resale.
“That’s a strong indicator,” Davis said.
While the town is paying to lower the price of units it buys, Ruther noted that the town couldn’t buy or build anything for the kind of money it’s spending to reduce those prices.
Using money from the new tax, as well as general fund and reserve fund money allows the town to “turn cash assets into real estate assets,” Ruther said.
That’s a pretty safe bet, Davis said.
“These are easy wins,” he said. “These units are never going to get cheaper, and even if the world turns upside-down, I’d still rather own the units.”
Davis acknowledged that there’s no perfect process for deed-restricting units. “But we’re trying,” he added. And, he noted, given the difficulty of building anything new, or rezoning existing property, this is a good step.
“We can’t build another Chamonix today, but we can do this,” he said.
