Breckenridge plans to add deed restrictions to as many units as possible
Town aims to purchase units through its buy-down program and add restrictions
Breckenridge Town Council on Tuesday, June 22, modified guidance for one of the town’s housing programs in an effort to obtain more long-term workforce housing units.
During its work session, council members discussed the town’s buy-down program, which is when the town buys a property and adds a deed restriction to limit residency to working locals. The council took particular interest in two complexes — Gold Camp and Val D’Isere — where the town has first right of refusal, meaning it can match any offers made on the properties to acquire a unit. (All owners in these complexes hold the same right.)
In an effort to avoid competing with locals in the real estate market, the town previously would back off of its first right of refusal if a local buyer was interested in purchasing the unit. The town changed course on that guidance Tuesday, saying it was outdated given the current housing situation.
“We have to remember this is getting worse,” council member Dick Carleton said. “We’re losing historical long-term rental properties. …”
Carleton pointed out that other communities like Steamboat Springs and Crested Butte have moratoriums in place to limit short-term rentals.
“We’re far from the most aggressive community here,” he said. “We’re starting to fall behind in this policy.”
Council member Erin Gigliello brought up the idea of buying the property and reselling it to the interested buyer with a deed restriction in place. She said that would accomplish the goal of housing locals while preventing the buyer from reselling the unit as a short-term rental in the future.
Housing Manager Laurie Best said the town has exercised its first right before and recently looked into using it to buy a property. But once the town determined the prospective buyer was a local intending to live there, the town backed off.
Without the deed restriction, though, the town can’t guarantee the unit won’t be resold or used as a short-term rental in the future.
“In the long run, there’s much better protection of that unit if we do acquire the unit and put a deed restriction on it,” Best said in an interview. “So what the council told us (Tuesday) is that we should move forward with our opportunity to acquire units, utilizing the first right of refusal when the unit meets our criteria, because then we are guaranteed it will serve our workforce in the long term.”
Best added that the town is always looking to acquire units that could serve the local workforce beyond just units on which it has first right of refusal.
“If there are owners in any of these complexes where locals have historically lived, the town does have a buy-down program, and we’re very interested in acquiring units from owners.”
The town also has a Housing Helps program, which is an incentive for owners to make their homes deed restricted. There is no sale that happens with the Housing Helps program; the town just compensates the owner and adds a deed restriction.
As property values continue to appreciate, Carleton said the town might lose the opportunity to add deed restrictions before it becomes more expensive.
“The point is that nobody wants to do this. It’s not like any of us want to have to make this choice of outbidding a local,” council member Kelly Owens said. “But I think we’re to a point where we have to make some really tough decisions to ensure that our community remains intact. And this is probably one of the easier of the tough decisions that we need to start thinking about.”
The council was in general consensus, and Best said the town won’t hesitate to use its first right of refusal following the guidance from council.
“I think going forward, we will probably be a little more aggressive in terms of exercising our first right because that is the best option to ensure the unit stays affordable and stays in the local pool and doesn’t convert to short term,” Best said.
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