Vail’s InDeed deed restriction purchase program has successful first year
By the numbers
698: Deed-restricted units in Vail in early 2017.
837: Current number of deed-restricted units in Vail.
117: Pending deed-restricted units, including nearly 100 at a Marriott Residence Inn that’s currently in limbo.
$2.5 million: Vail’s housing fund for 2019.
Source: Town of Vail
VAIL — This town in 2017 adopted a strategic plan that called for putting deed restrictions on an additional 1,000 units by 2027. That plan is off to a strong start.
The Vail Town Council at its Tuesday afternoon session heard a report from Vail Local Housing Authority Chairman Steve Lindstrom, who laid out the housing program’s progress in 2018.
Lindstrom said that progress has been significant. This year alone, the 32 townhomes at the Chamonix neighborhood in West Vail have all been sold and occupied.
The town financed the construction of that neighborhood to the tune of about $17 million. That loan has been repaid through unit sales.
In addition, work began to replace the Solar Vail apartments, just east of Red Sandstone Elementary School.
That project, by Sonnenalp Properties, is replacing the old, 24-unit building with a new, 65-unit structure.
The town participated in the Solar Vail project by buying deed restrictions on those units for just more than $4.2 million.
Vail’s latest deed restrictions have a number of rules, including limiting use of units to only people who work an average of 30 hours per week in Eagle County. Units can’t be used for short-term rentals.
The Solar Vail deed restriction purchase was made using money that had accumulated over the years in the town’s housing fund.
That purchase largely drained that fund. Council members agreed in June to add another $1.5 million to the housing fund in order to buy more deed restrictions.
Aside from big projects, the Vail InDeed program also purchases deed restrictions from private homeowners. The program pays homeowners to deed-restrict their homes.
For buyers, that can reduce the price of a unit. Deed restrictions on units also mean they’ll sell for less than free-market units.
Lindstrom said there have been 21 transactions with private owners since the program launched in March.
Vail Housing Director George Ruther said the town has completed about two-thirds of the private deed restriction proposals that came through his office.
Ruther said while many of the restriction sales have been made for smaller units, some of those sales have come for family-sized homes.
But, he added, buyers of larger units have so far been less likely to sell a deed restriction.
Council member Greg Moffet noted that the town’s deed restrictions aren’t subordinate to primary lenders on loans.
That means if an owner defaults on a mortgage, the town will be able to maintain the deed restriction on that home.
Council member Kim Langmaid asked Lindstrom if the housing authority could do more work with real estate firms in the area in order to encourage owners of family-sized units to join the program.
Lindstrom noted that working with real estate firms depends in large part upon knowing what the town’s budget is for the program.
For 2019, that budget is $2.5 million, and council members have been clear that no more money will be made available during the year.
Lindstrom said the housing authority is engaging consultants to both look at potential revenue sources and quantify the economic and environmental value of more resident-occupied housing in town.
While there’s only so much money in the housing fund, Lindstrom said he’s optimistic the housing authority will be able to work with both private homeowners and developers to continue the program’s progress.
As the Vail InDeed program continues, Lindstrom said he expects the housing authority and the housing department to continue to learn with every deal.
Lindstrom said the program becomes more effective with almost every deal made.
The authority board is also having progressively more conversations with developers, land owners and others.
“The more things we do, the more opportunity we’ll have in front of us,” he said.
Vail Daily Business Editor Scott Miller can be reached at firstname.lastname@example.org and 970-748-2930.