Breckenridge almost ready to put 17 workforce townhomes on the market
June 1, 2017
As Breckenridge inches closer to putting 17 newly built townhomes on the market in the coming weeks, one looming question hinges on what kind of deed restrictions might come with the properties.
It's a matter of what the town hopes to accomplish long-term with its new workforce housing neighborhood — currently known as Denison Placer 1, but in the midst of a naming contest — and the best way to go about doing it.
Workforce neighborhoods are housing developments of various sizes built by the town, and the units within them are sold at below-market prices to individuals who qualify based on various guidelines, like local employment and income requirements.
Instituting deed restrictions can mean imposing price caps, limiting real estate fees, adding employment requirements and setting other limitations on the use and future sales of the townhomes in perpetuity. Officials view imposing deed restrictions as one way Breckenridge can hold down prices after the initial sales.
"It's funny because deed restrictions are a great tool," said Laurie Best, senior planner at Breckenridge Community Development. "I mean they are probably our most effective tool for making sure the units continue to be occupied by our workforce."
At the last town council meeting on May 23, town officials expressed a sense of urgency in setting deed restrictions on the new workforce housing development that's set for a June 17 launch date.
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"What's going to be important from a timing perspective is that in mid-June, we're going to be putting out information, so people that are lining up and getting interested in purchasing these 17 units need to know the conditions if they are going to be serious about wanting to buy one," town manager Rick Holman told the council.
The issue is expected to come up again Tuesday, at the last scheduled meeting before the June 17 launch date, when the town will start accepting applications from people who want to buy the homes. If the number of qualified applicants exceeds availability, there will be a lottery.
Altogether, the new workforce housing neighborhood will include 52 townhomes, all from one to three bedrooms, at different price points. Seventeen of the units will be made available at the launch, and 35 more are expected to be ready sometime next summer.
Best said the town isn't releasing the exact prices of the townhomes until the launch, but she did provide ballpark figures, saying the one-bedroom units will go somewhere around $200,000 while the majority will sell in the $300,000 to $400,000 range and a handful will close right at $500,000.
"(Town officials) kind of view the deed-restricted housing, or workforce housing, as a basic piece of our infrastructure," Best said, adding that without a permanent population, basic services suffer and the sense of having a real town quickly fades away.
Combating this problem in a resort town is tricky, she continued, and it takes a variety of housing options, long-term rentals and real estate sales, at various price points to meet the need and help make up for units lost to short-term rentals and rising prices too high for the average worker.
"That's one thing the town has done really well," she said, "is different styles and pricing."
Some of the biggest concerns about setting deed restrictions on the new neighborhood expressed by town council members at their last meeting in May centered on striking the right balance in keeping the houses affordable while making them attractive to potential buyers, who might want to upgrade not too long after their purchase.
On one hand, if the town's goal is to make housing affordable for its workforce, officials could impose strict requirements like cap the sale price and limit real estate fees, which can add 6 or 7 percent to the price every time a home is turned over.
On the other, however, council members also talked about the needs of growing families and how changes in housing are often precipitated by changes in life, such as the addition of a new member to the family.
Being in a deed-restricted home, council members hypothesized, could prevent individuals from selling those properties at a significant profit that allows them to upgrade into bigger, more expansive homes when they are ready to make the move.
"As soon as we sell these (homes), we lose control other than having these stipulations in deed restrictions," Councilman Mike Dudick said during the discussions. "They provide economic control so the pricing doesn't get out of whack and become unaffordable."
"I'm not opposed to that," Councilwoman Erin Gigliello responded. "It's just that the culture we've created, it would be good if (the people who buy them) have a place to go."
While Best conceded that buying a home, deed-restricted or not, is a major investment that comes with inherit risks — most notably the market forces of the time — she added that the town's workforce-housing units are typically priced so far below the market value that anyone who buys one rarely, if ever, takes a loss.
Still, these units aren't about providing investment opportunities, she said.
"We don't view necessarily deed-restricted units as an opportunity for financial gain or investment," Best said. "We always say it's a nest, not a nest egg."
Best encourages anyone who's interested in the new workforce-housing neighborhood to go to DenisonPlacer.com, where they will find more information about the development, in addition to being able to sign up for regular updates.