I arrived a few minutes late for the Archuleta Board of County Commissioners work session yesterday morning, where Emily Lashbrooke — Executive Director for the Pagosa Springs Community Development Corporation — had already begun her overview of some draft “deed restrictions” she and her board of directors are developing for the PSCDC’s current affordable housing project, now underway in the Trails subdivision west of town.
The PSCDC and friends broke ground on the project on Monday, and posted a video online showing a dozen local leaders celebrating the start of what might become 10 new homes for working families in Pagosa Springs by the end of 2024. The PSCDC has signed a contract with local development company BWD Construction (‘Beyond Your Wildest Dreams’) to build the 10 proposed residential homes.
One of the sticky problems with building new homes in a mountain resort community, aimed at low to moderate income families, is the tendency for subsidized homes to appreciate in value until they are no longer affordable.
This appreciation problem has been evident over the past couple of decades. One of the most ambitious builders of affordable housing in Pagosa at the beginning of the 21st century was Colorado Housing Inc. Making use of federal housing subsidies, non-profit CHI built several dozen homes for qualifying families, priced at around $50,000 each. But the organization made no effort to control the appreciation of the homes, and over the following decade, many of the owners sold those subsidized homes for prices as high as $400,000 — and walked away with money in their pockets, courtesy of the American taxpayer.
Another local non-profit, Habitat for Humanity of Archuleta County (Habitat Archuleta) also makes use of federal subsidies, but attaches a restricted deed to the new homes, to prevent the affordable homes — affordable in 2024 — from becoming ‘no-longer-affordable’ in, say, 2030. One of the protections built into the deed requires the homeowner to give Habitat the first right to purchase the home before it goes onto the open market, so that Habitat can potentially find a new workforce family to take possession.
The 10 homes in the Trails subdivision for which the PDCDC has contracted with BWD will be subsidized by local and state government grants, and will be offered only to moderate income families, at least one of whom is employed in Archuleta County (to include, perhaps, employment at the Wolf Creek Ski Area in neighboring Mineral County.) The vacant parcels on which the homes are being built were tax lien repossessions, donated to PSCDC by the BOCC.
The homebuyers might qualify for sizable fee waivers from Pagosa Area Water and Sanitation District (PAWSD).
As mentioned, I missed the first part of Ms. Lashbrooke’s presentation for the BOCC, but it was clear from the remaining conversation that both the PSCDC and the BOCC are serious about ensuring that these new home remain in the “affordable” price range for at least 30 years, and that they are occupied by “working” families.
To make that happen, one of the typical techniques is to write legal restrictions into the deed.
Another useful feature is to have a local organization monitoring the homes — to make sure they don’t turn into rental investments, or get sold for a high price in spite of the deed restrictions. The PSCDC wants to help get the homes built, but apparently doesn’t want the responsibility of making sure the property continues to be used according to the deed restrictions for the next 30 years.
Ms. Lashbrooke, at the work session:
“One thing I do want to make clear is, there is some language here [in the draft deed restrictions] that refers to PSCDC responsibilities. Once we sell these homes, we’re out of the picture. And that’s why we want to work with the Housing Authority to take them on…”
The Archuleta County Housing Authority (ACHA) currently oversees about 45 subsidized low-income rental units in downtown Pagosa, and makes sure that the occupants meet the income limits specified by the relevant state and federal housing agencies.
ACHA executive director Anissa Lucero was seated in the work session audience, taking notes.
Ms. Lashbrooke:
“We don’t have the capacity or the time to manage these deed restrictions, and it’s not in our wheelhouse. It’s not our expertise… So some of these responsibilities will be talked about when we meet with the Housing Authority. So, when a complaint comes in, whether it be from a prospective buyer or a bank — like, this person isn’t paying their mortgage — the Housing Authority would be the point of contact. Not the PSCDC.”
She noted that, according to the draft deed restrictions, the buyer is ‘income qualified’ when they first purchase the home, but after that, their income is allowed, by the deed restrictions, to fluctuate up or down without a risk of losing the home.
“The only time the family gets ‘income qualified’ is upon the purchase of the home.” she said.
“This deed restriction will be in place for 33 years.” I believe that 33-year time frame is specified by one or more of the state grants the PSCDC has applied for.
Ms. Lashbrooke broached the idea that, in the future, these deed-restricted homes might be purchased by local businesses, for housing their employees, but questioning from the BOCC, about how a ‘business’ could ever qualify for an ‘income-qualified workforce family home’, seemed to paint that option as unrealistic.
Commissioner Veronica Medina said she was opposed to businesses being allowed to purchase these ‘workforce’ homes.
Ms. Lashbrooke:
“There’s also a rental component in here, where an owner might be allowed to rent their house for a specified period if their work takes them out of the community for some reason… and it’s capped on the number of years they can continue to do that.”
In response to a question from Commissioner Ronnie Maez, Ms. Lashbrooke suggested that the home would need to be rented to a qualified working family, at an affordable rent.
It’s complicated, ensuring that a subsidized home behaves the way you want it to.