It may not be the only solution, but Routt County Planning Commissioner John Ayer thinks the Red Hawk development in Stagecoach is an example of one of the tools the county can use to address the need for affordable housing.
After years of educating developers about the need for affordable housing, Ayer says the county finally is starting to see results.
"I just really feel they are getting the message," Ayers said.
The developers of the Red Hawk subdivision received project approval in January and became one of the first developments in the county to volunteer deed-restricted housing deemed affordable by the Yampa Valley Housing Authority.
Of the 29 homes being built in Red Hawk, eight will be deed-restricted, affordable units.
Some might balk at the notion of a $275,000 home in the Red Hawk being deemed affordable housing, but that price tag means a two-person household making $69,600 a year will use 30 percent of its income to pay the 30-year mortgage. Such a scenario represents a household making 120 percent of Routt County's average median income. To qualify for one of the eight deed-restricted properties to be built at Red Hawk, the household income needs to be less than 120 percent of the area median income.
"They're making it by the skin of their teeth," said Elizabeth Black, executive director of the Yampa Valley Housing Authority.
Other deed restrictions stipulate that the homeowner must be employed in Routt County, have a net worth of less than $250,000 and use the home as his or her sole residence.
The owners of the Red Hawk development said they could make more money by building more expensive houses, but providing fair market housing is part of the company's philosophy.
"It's really hard to get someone to build an affordable house when they can build something twice as expensive and make twice as much money," said Rob Van Deren, co-owner of Morgan Communities of Colorado. Other owners are Ren Martyn and Steve Barwick.
The company has been in Steamboat for only a year, and the Red Hawk subdivision is their inaugural development. The developers said their niche is affordable housing, a much needed commodity in the Steamboat area and a buzzword among locals, Realtors and politicians.
"We could make a lot more on this project if we wanted to," Van Deren said.
They plan to offer four base-model homes for the subdivision and hope to start pre-selling the homes in early March.
They said they hoped to make more of the houses deed-restricted but settled on eight as costs rose and negotiations with the county led to an agreement to prepare part of Routt County Road 16 for paving. Planning commissioners also expressed concerns about the density of the project.
The developers are doing something that seems unusual for single-family home builders: They are buying the land, developing the building plans, building the homes and selling them. They call their business a "full-service development company that takes it from horizontal to vertical."
Such a business model helps keep costs down, and the owners said they are receiving good cooperation from local contractors on pricing.
They plan to have four base models available and ranging in size from 1,250 square feet to 1,950 square feet and ranging in price from $275,000 to $495,000.
The deed-restricted homes will be spread throughout the subdivision and will have to cost about $275,000. That is about what they cost to build, Martyn said.
"Based on the estimates today, we are not going to lose money on the affordable houses," Martyn said.
That might not always be the case for developers, said Black, the Housing Authority's executive director. Developers risk taking a loss on building houses that need to be affordable.
"That is the biggest concern for us and other developers," Martyn said, referring to affordable housing being required in new developments. "If it costs more to build these (affordable) houses, the difference is going to be tacked onto the other houses."
"By virtue of the fact that this developer and a few others are ignoring more profits in order to provide a public benefit stands to show that the development community can rise to the occasion and be considered a credible partner in the provision of affordable housing," Black said.
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