Our View: Another brick out the wall
April 23, 2011
April 23, 2011: Deed restriction buyout proposal illustrates economic shifts
April 16, 2011: Steamboat homeowners could soon buy out of deed restrictions
Steamboat Springs — One of the last bricks that helped to form the foundation of Steamboat Springs' affordable housing efforts during the past decade is about to come tumbling down.
Early next month, the Steamboat Springs City Council is scheduled to take action on a proposal that would allow West End Village homeowner Rebecca Roof to buy out of her deed restriction in an effort to help her sell her home.
Roof has a sympathetic story, and we think the City Council ought to support the proposal. We also recognize that allowing Roof out of some of the deed restrictions encumbering the sale of her home means similar requests will need to be granted to future property owners here. Ultimately, it will spell doom for income-based deed restrictions on Steamboat Springs homes and condominiums.
Roof is a U.S. Forest Service employee who recently was transferred to Arizona. The deed restrictions on her Penny Lane home include an income requirement and a net worth cap that make it difficult to attract qualifying buyers, especially in today's tightened lending market.
There are a lot of stories like Roof's these days. We're three years into an economic slide that has crippled the local real estate and construction industries and seen home values drop 20 percent or more a year. Besides those buyers who are gobbling up short sales and foreclosed properties at bargain prices, there's not a lot of real estate activity. Finding qualified buyers for properties like Roof's with income-based deed restrictions is increasingly difficult.
So what's the city to do?
The proposal before the council would allow Roof to get rid of the income restriction and net worth cap on her home's deed if she pays $2,300 to compensate for the preferential, below-market financing she received when she bought the home for $405,000 in 2007. It recently was listed on the MLS for $360,000, and her Realtor has said a buyer is ready to close on the home if the income and net worth cap restrictions are removed.
However, two other deeds would remain in place: The buyer would have to work in Routt County and use the home as his or her primary residence.
We like the balance struck by the proposal facing the council. On one hand, it recognizes the challenges now facing residents who bought deed-restricted homes during a different era of financing and real estate activity. On the other, it keeps a couple of provisions in place that will help ensure that homes built for the working class remain occupied by full-time residents employed in Routt County.
From a bigger-picture perspective, it would be unfair to not work with Roof — and, by extension, future property owners — on removing some of her deed restrictions when the city already has done so for many of the developers who were required to build affordable housing units as part of their projects but then couldn't sell many of them after the economy went south.
Finally, we hope the city and affordable housing advocates — as this Editorial Board has been for many years — learn from the experiences of the past couple of years and use them to shape future housing policy.