Steamboat homeowners could soon buy out of deed restrictions | SteamboatToday.com

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Steamboat homeowners could soon buy out of deed restrictions

City Council could give final approval to housing policy proposal May 3

Proposed changes to the deed restrictions on this Penny Lane home include removal of income and asset caps, indicating market-driven shifts in local approaches to affordable housing policy.

— When U.S. Forest Service employee Rebecca Roof got a transfer to Arizona, she found it very difficult to get out from under her roof in Steamboat Springs.

What has unfolded since — the proposed removal of some deed restrictions on her West End Village home, with compensatory payments from Roof — indicates a changing approach to local affordable housing policy that could affect other homeowners facing similar challenges.

The city is considering a plan that would enable Roof to buy out of two deed restrictions, an income requirement and a net worth cap, for potential buyers of her home at 2357 Penny Lane. In order to maintain the community character behind affordable housing policies and the general intent of West End Village, though, the plan would keep requirements that potential buyers work in Routt County and live in the home as their primary residence.

The Steamboat Springs City Council gave initial approval to the plan April 5 and could give final approval May 3.

Mary Alice Page-Allen, asset and program manager for the Yampa Valley Housing Authority, said 41 of the 72 West End Village lots have deed restrictions. Although Roof's request arose out of the special circumstances involving her job transfer, Page-Allen said the process could set a template for future, similar requests from other homeowners.

"One of the things that we're real cognizant of here is that we don't expect this to be the only one," Page-Allen said. "I don't see a stampede happening, but I do see some others coming."

She said the challenge would be creating a process that's fair and equal for different homes with different restrictions in different neighborhoods. Two similar requests recently have arisen from owners of condominiums in Sunray Meadows off Village Drive, for example.

Roof would have to pay about $2,300 under the proposal to compensate for preferential, below-market financing she received when buying the home on the city's west side in 2007. Thirty-four of West End Village's deed-restricted units received preferential financing, Page-Allen said.

Some deed-restricted homes in other neighborhoods received substantially greater purchasing discounts and could have a greater cost to buy out of deed restrictions, she said.

"I think that regardless of why the request comes forward, we had to develop some kind of process to say, 'Here's how we analyze it' and treat everybody equally," Page-Allen said. "We have to treat each development equitably."

Broker associate Sharon Pace-Ward, of Prudential Steam­­boat Realty, said she has an offer on Roof's home, contingent on the amended deed restrictions.

"I think this is a big victory for all of West End Village, while still preserving what they're trying to preserve," Pace-Ward said, referring to the neighborhood's community character goals.

City Manager Jon Roberts said discussions about removing deed restrictions under special circumstances began last year.

Steamboat Springs Finance Director Deb Hinsvark said the potential policy changes are driven by the drastic changes to the real estate market since deed restrictions were implemented several years ago.

"Deed restriction is an effort to keep real estate at an affordable price. The problem is, the current market has dropped below that affordable price," Hinsvark said. "It's more a consideration of where we are in the market right now, I think, than anything else."

— To reach Mike Lawrence, call 970-871-4233 or email mlawrence@SteamboatToday.com