Means testing debated for homebuyers | SummitDaily.com
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Means testing debated for homebuyers

Summit Daily/Brad Odekirk The Breckenridge Town Council wants developer David O'Neil to implement means testing as a criteria for people wishing to buy homes in the second phase of the Wellington Neighborhood. O'Neil opposes means testing, saying it stigmatizes lower-income residents and won't work in the long term.
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BRECKENRIDGE – Developer David O’Neil’s jaw was firmly set when Breckenridge Town Council members told him they still want him to means test homebuyers in the next phase of the Wellington Neighborhood.”We believe that requiring formal means testing is an extremely complex undertaking that will have significant long-term and negative impacts upon the neighborhood,” O’Neil told council members. “Means testing seems to be unnecessary and presents many significant issues.”Means testing would examine a potential homeowner’s salary to ensure that wealthier people don’t buy homes that are supposed to be set aside for people making less than the area median income (AMI).The AMI is the amount of money where half the people in a community make more and half make less. The AMI for a family of four in Summit County is $76,100. The ultimate goal of the affordable housing and means testing is to keep regular people – teachers, ski area employees, firefighters and the like – in the community.

The town has asked O’Neil to build 15 of the 128 homes in the second phase for people who make 80 percent or less of the area median income (AMI). The town would also like O’Neil to set aside 48 homes for people who makes less than 100 percent AMI, 57 homes for those in the 101 to 120 percent AMI income bracket and eight homes for those who make 150 percent AMI or less. “I want to give it a go,” Councilmember Eric Mamula said of means testing. “That’s where the need is. Those are the folks I want to satisfy.”Some council members said they wondered if such a test could also take into consideration such things as an applicant’s student loan debt, if they’re caring for elderly parents or have other challenging financial situations.O’Neil said he never intended his project to become an affordable-homes development but rather a community neighborhood occupied by local workers rather than seasonal employees and short-term renters.He maintains that in the first phase of the project, which comprises 122 homes, means testing worked by itself, with wealthier people buying larger, more expensive homes and those making less buying smaller homes.

One of the concerns he has is the long-term affordability of the homes. For example, he said, if interest rates were to increase to, say, 9 percent, fewer people would qualify to purchase a home built for those in the lower income brackets.Council members, however, said they would re-examine the means testing if interest rates started to preclude people from buying homes.Councilmember J.B. Katz said she thinks the first phase of Wellington Neighborhood worked well and the council shouldn’t fix something that isn’t broken.”I am opposed to means testing or changing what’s going on,” Katz said. “I haven’t seen anything that indicates to me that the Wellington Neighborhood isn’t working.”Another issue O’Neil has with means testing is the stigma he believes will be inflicted on those who make less money than their neighbors.



“A project with means testing is generally viewed as a government project,” he said. “Government projects generally are perceived as serving low-income households. This perception, combined with the government control, affects how homeowners view their own homes and their community.”He had support from some of those in the audience.”My father lives in a retirement community in Arizona, and one part of it has means testing,” said Wayne Brown. “All the residents will say, ‘Oh so-and-so, they live in the Tower.’ It is a stigma.”O’Neil said he planned to re-examine the proposed testing and return to council.Jane Stebbins can be reached at (970) 668-3998, ext. 228, or jstebbins@summitdaily.com.


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