Housing rules frustrate developer

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— All the recent hoopla about the lack of affordable housing has Ray Kulas a little frustrated.
The local property manager has plenty of affordable housing, but most people in Steamboat Springs make too much money to qualify.
"Some people working at McDonald's are making too much money to get into one of our apartments," said Kulas, property manager for the four-year-old Mountain Village Apartments near Walton Creek and Whistler Road.
Kulas is talking about Section 42 apartments that are income restricted. At Mountain Village, 26 of the 103 units are income restricted.
The developer was given an $800,000 tax credit in exchange for making 25 percent of the units affordable housing.
For example, a single person wanting a Section 42 apartment can earn no more than $19,000.
"I need them (applicants) to make about $8.75 an hour," Kulas said. "I don't know anyone who's making $8.75 in Steamboat because there's a shortage of employees. They're paying higher wages."
The federal government sets the income restrictions based on 50 percent of the average median income for a family.
In Routt County, the median income is $54,300, according to Housing and Urban Development, which makes the rules for Section 42 housing.
That means Mountain Village can rent a low-income apartment to a family of four only if that family makes $27,150 or less.
Rex Gambrell, the regional property manager for the company that runs Mountain Village, said he believes the median income is skewed and doesn't represent a fair figure for Steamboat Springs.
"Steamboat is probably the only town in Routt County that is paying a high minimum wage, whereas Hayden and Oak Creek are paying a more typical minimum wage," Gambrell said.
"The average median income is based on the entire county, which skews the income," he said.
Gambrell points to Pinewood Village Apartments in Breckenridge, which has the same Section 42 housing but remains full of tenants.
"Property in Summit County has a higher median income than Routt because there are more resort towns crowded together," Gambrell said.
HUD lists Summit County's median income as $64,600. Therefore, Pinewood Village is able to allow higher-income tenants.
For example, a family of four in Breckenridge can make up to $32,300.
A single person in Breckenridge wanting a low-cost apartment can earn $22,600, compared to Steamboat's rate of $19,000. And two people in Breckenridge can make $25,850, compared to $21,700 in Steamboat.
A regional economist with HUD said there's not much Steamboat can do about separating out its median income from that of surrounding rural areas.
Economist Jim Coil said the standard for determining median income was established in 1974 to evaluate how federal subsidies would be handed out.
"We didn't want to have a different income level in the inner-city and one for the suburbs," Coil said. "We wanted to allow for people to move around and not be concentrated."
However, he did say there could be a major adjustment after the 2000 Census.
It's all frustrating to Kulas, who says he's spending $1,000 per week on ads trying to fill the low-income apartments that come with washers and dryers, along with garages they can rent for extra.
It's especially urgent because federal regulations require that all Section 42 units be rented out before "market" units in the same complex are rented out.
"We're losing over $8,000 a month in just the market units," Kulas said.
Right now there are four low-income units available, but it's keeping Kulas from renting out eight market units to tenants.
Recently, a resident who expressed interest in an apartment who earned $9/hour was turned down because his employer was going to give him a 50 cent raise within a few months. The raise would have put him over the limit.
On the same day that he had to turn down that potential tenant, Kulas hoped he could put the Wilkinson family into one of his 3-bedroom apartments.
Paige Wilkinson was excited about the prospect of putting her husband and three children in the relatively new complex where other families lived.
"We rented out an old cabin in Strawberry Park last year," Wilkinson said. "That cost us $700 and it only had one bedroom. Our pipes froze three times and we had mice."
If Wilkinson's husband, who's an architect, doesn't make more than $29,300, she may get the apartment for about $700.
Kulas said the regulations surrounding the Section 42 housing are strict.
For example, he has to verify all information through a third party, such as the employer. Full-time students aren't eligible to live alone; child support and interest income also count toward an applicant's income. Kulas said he even has to check the profit/loss of small-business owners who apply.
"There are business owners who pay themselves $10,000 a year but the company makes $100,000 and pays for their truck and food," said Kulas, who said some people try to "get around" the rules.
"You can't have one penny over. No exceptions," Kulas said.

To reach Frances Hohl call 871-4208 or e-mail fhohl@amigo.net

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