John Spezia: Council needs to reconsider Brynn Grey annexation proposal
What are deed restrictions? In general, they are qualifications and requirements for a home buyer or seller of a for-sale house. They target a specific population of local citizens in need of affordable housing in a community.
Since we live in a popular tourist/skier destination market economy, the costs of land, housing, products and services, along with our speculative real estate market, are very expensive. Add the high rate of appreciation of houses and low wages that can’t keep up with this housing market, and it’s very difficult for local professionals like nurses, fire, police, social workers and emergency personnel to purchase affordable housing in the community they serve daily.
Deed restrictions vary for each community depending on the target population a community is attempting to serve. Usually, the qualifications for a purchaser are live locally, work locally, income requirements — targeting an income group that can’t afford market rate housing prices — and limited assets — can’t own a home or rental property and have less than a specific dollar amount of investments. An appreciation cap is put on the house that keeps the house affordable for the next buyer who qualifies for the targeted income group.
In the newest Brynn Grey pre-annexation agreement with the city, the deed restriction requirements are live locally, work locally and an appreciation cap of 3 percent. For each $100,000 of a home’s price, this would result in an increase of about $34,000 over 10 years. The only problem with this scenario is anybody who lives and works in Steamboat Springs can purchase these “affordable” deed-restricted houses.
You can own your home, have rental property, have a wad of money invested and so on and qualify for these deed-restricted housing units. This misses the target income population in need and allows an investor-purchaser to rent their own house out and use the rent money to pay the mortgage on their new deed-restricted house. For-sale affordable housing problem solved?
The West Steamboat Springs Area Plan in conjunction with CDC annexation code requires that 20 percent of the units built must be affordable for locals who earn 80 percent of Routt County annual median income — $56,000. To meet the those affordable housing requirements, the Brynn Grey annexation proposal of 438 units would need the equivalent of 87 affordable units.
A family of four at 80 percent of the AMI could only purchase a unit costing $270,000. At this point there are no deed-restricted units in that price range in the Brynn Grey proposal. The city is also considering revising the CDC annexation code so it can avoid the West Steamboat Springs Area Plan’s affordable housing requirements.
According to the city’s own financial analysis, the city will be contributing about $48,447,000 over the next 16 years to the annexation property, and Brynn Grey will be investing $28,000,000 over the next 16 years while making a 10 percent profit. The difference is $20,000,000. Brynn Grey gives itself a $7,160,000 credit for the affordable housing component, which does not target the entry level population in need and is not affordable anyway.
Oh, did I mention that the city is facing a $1.8 million budget shortfall this budget cycle based on their own estimates?
In the Brynn Grey annexation proposal, City Council needs to reconsider all the aspects of good governance and community and fiscal responsibility.
Solutions? Follow the existing West Steamboat Springs Area Plan requirements, develop a source of funding for for-purchase affordable housing, develop an alternative property/sales tax financial base, hire an affordable housing specialist for the planning department to provide up-to-date information on AFH and for-purchase affordable housing to the council so they can make informed decisions.
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