Is affordable housing really ‘affordable’?
SUMMIT COUNTY ” “You’re not in Kansas anymore,” said assistant county manager Steve Hill, discussing upward pressure on the value of local price-capped housing. The price of affordable housing is a relative thing, Hill said.
“When I came here, I bought half the house for twice the money,” Hill said. “It wasn’t affordable, but it was attainable. That’s how I’d explain the difference to my neighbor.”
Hill represents Summit County on the Summit Co mbined Housing Authority board, where representatives from the towns and county recently discussed the relative definitions of the the two terms.
A generally accepted definition of affordable is when a household spends less than 30 percent of its income on housing expenses. But that definition of affordability doesn’t always add up.
“It’s no longer reasonable to presume that Summit County will have homes that allow most of us to spend less than 30 percent of our income on housing,” housing authority director Jennifer Kermode wrote in a recent talking-points memo. “We need to acknowledge that Summit County is a more expensive place to live than many other Colorado areas, thus we have to accept that our cost of living will be higher.
Whether it’s simply a matter of semantics or not, Kermode said the goal remains to get locals into places that working families can buy and maintain within their existing means. In Summit County, that means spending more, maybe much more, than 30 percent of your income on housing.
The price of deed-restricted homes in Summit County spans a wide range that reflects the bridge between affordable ant attainable. And the market shows what’s in demand. The housing authority’s web site recently showed that several two-bedroom homes listed for less than $200,000 were quickly snapped up.
At the other end of the scale, a three-bedroom home in the Breckenridge Wellington neighborhood is listed for more than $400,000.
“It’s not just about the 80 percent of Area Median Income (AMI) any more,” said Breckenridge town manager Tim Gagen.
Upward price pressure across the housing market drives the range of affordability, Gagen said, explaining that there is significant demand for attainable units from people making 120 percent or more of the AMI.
For Breckenridge, a key factor in the price spiral is the loss of existing locally owned homes, as longtime owners sell to the second-home market. Some residents who bought their property several decades ago are moving away and cashing out, those homes no longer affordable to newcomers, he explained.
The housing authority lists several factors driving affordable home price inflation:
– increased demand for land;
– increased demand for smaller homes to be used as vacation homes;
– increased demand from retirees for homes;
– increase in new jobs;
– increased cost of building; and
– increased cost of heating fuel food.
The debate is important as the housing authority explores how best to leverage the tax money generated from a voter-backed sales tax hike and graduated development impact fees.
The funds from the taxes come from the state to a housing authority account where they are immediately distributed back to the towns relative to revenue contributions.
The sales tax portion of the revenue can be spent on development of affordable housing and administrative costs. At most, 6 percent of the revenues can be used to support the multi-jurisdictional authority.
Each town and the county independently created impact fee scales and those funds go directly to the respective jurisdictions where they are assessed. By law, impact fees must go to capital expenses like land acquisition or new development.
Most recently, each of the jurisdictions committed a portion of the tax revenue to fund a downpayment assistance program for full-time residents making between 81 and 160 percent of the area median income. Loans of up to $10,000 will help local workers finance a home they can afford.
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