Steamboat City Council clears way to lift deed restrictions at Sunray Meadows
March 12, 2014
Steamboat Springs — At its last meeting, the Steamboat Springs City Council paved the way for an easier process to lift deed restrictions from residential properties, but it remains to be seen how wide the application might be.
Instead of just removing the deed restriction for the one Sunray Meadows owner who was before the City Council on March 4, members voted to allow the owner before them and the two remaining deed restricted units in the development to all receive the same deal administratively if requested.
There were seven original deed-restricted units at Sunray Meadows in a building that the developers of Edgemont purchased to partly fill their community housing requirement. Each owner had the same terms in their deed restriction but received vastly different subsidy amounts, ranging from $60,900 to $165,500.
The first owner to request the restrictions be lifted reached a deal with the city to pay back 11 percent of the subsidy at sale or refinance.
"At that time, we said we'd honor the same terms with anyone else that asked," Steamboat Springs Planning Director Tyler Gibbs said. "Each one was still being taken through council individually."
Before March 4, only one other owner had gone through the process to ask City Council to lift the restrictions, and two deed restrictions at Sunray Meadows were lost to foreclosures.
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The situation at Sunray Meadows, where multiple deed restrictions were crafted at once, might not present itself for the city in the near future.
Deed restrictions come in many different forms, according to the circumstances they were written under.
There are 96 deed restrictions in Steamboat, according to Steamboat Springs Planning Director Tyler Gibbs, and about a third of those are under the purview of the city.
When the City Council voted to suspend the city's community housing requirements, unsold units had deed restrictions lifted if they were subject to the ordinance, but units that went through a different process, such as the planned unit development process, had to go to City Council to request those deed restrictions be lifted.
If, in the future, multiple deed-restricted units created under the same terms request relief, the city could follow the same path as Sunray Meadows by crafting a deal for all affected owners that could be approved for each administratively.
"We don't have anything proceeding along those lines," Gibbs said.
In West End Village, where there were more than 40 deed restricted lots, owners were allowed to buy out of certain deed restrictions after negotiations involving the city of Steamboat Springs and the Yampa Valley Housing Authority.
The Yampa Valley Housing Authority recently has seen a request by a Fox Creek Village owner to lift a deed restriction, according to Executive Director Jason Peasley.
The first question, Peasley said, is whether the organization and its board are open to the idea of lifting deed restrictions.
"We as a community invested a lot of money to make sure those units were affordable," he said. "As stewards of that resource for the community, how does the community benefit from" lifting the restrictions?
The second question is what a potential deal to lift restrictions at Fox Creek Village would look like.
If a deal was struck that mirrored what was done at West End Village, Peasley said, the buyout cost would be significantly higher and practically unaffordable.
The housing authority has lost two deed restrictions in Fox Creek Village to foreclosures.