Deed restrictions on contracts that some owners signed when they purchased homes through the Estes Park Housing Authority were again a topic of conversation during organization’s July public board meeting.
Several residents of Vista Ridge Condominiums, an EPHA-managed property, attended the meeting to ask for clarification about determining the value of their deed-restricted homes and expressed a concern about a lack of increase in equity over time.
Scott Moulton, executive director of EPHA, explained that restrictions in the deed, combined with the requirement to sell only to those who make 80% of the area median income, are factors that determine a base allowable sales price. However, the process begins with an appraisal conducted by an outside professional that compares the unit with other deed-restricted sales of similar properties.
After the appraisal, half of the value increase is applied to the sales price. The deed-restricted homes in Vista Ridge are further made affordable by a soft $50,000 mortgage held by EPHA. This is a non-serviceable loan, so no payments are made during the life of the loan unless the property is sold within three years of purchase.
“Maintaining the affordability long term is critical to the mission of the EPHA,” said Moulton. “Ownership opportunities are very difficult to provide at 80% or below.”
In addition, the homeowner bears the responsibilities and risks of homeownership, whether deed-restricted or not. These include increases in HOA fees and fluctuations in the housing market.
“Deed-restricted properties, depending on the model, can actually be safer economic bets than market-unrestricted homes, but that risk is still there,” he said. “This is not meant to be a complete safety net, absolving a homeowner of the risks that come with homeownership.”
The Directors compared the occupancy levels of the housing authority’s largest property with another similarly sized facility in Estes Park. According to Moulton, Prospector Apartments on South St. Vrain Avenue, which has rented approximately 52% of its units, is offering a summer special with reduced rents.
The rental rate of Fall River Village, a workforce housing complex previously used for short-term vacation rentals before being purchased by EPHA in October, is 100% full on the upper level. Moulton reported that units on the lower level of the complex are about 45% full. Two units on the upper level, a four-bedroom and an attached one-bedroom, are being held for possible conversion into a childcare center.
“We’re about 30% behind the anticipated pace of leasing for Fall River Village, but I would say most of that is our own staff capacity combined with getting the property physically ready, more than it is market variations,” Moulton said.
Jessica Moffett, EPHA’s housing operations manager, said that maintenance issues on some units and removing old furniture out of what were short-term vacation rentals so residents can move their furnishings in are causing delays.
She reported that several units of summer workers with J1 visas have moved into Fall River, opting for EPHA’s six-month lease option. In addition, a seasonal worker for the Estes Valley Recreation and Park District is also taking advantage of the shorter lease option.
In a final move during open session, Moulton’s employment contract was extended for 90 days, to provide the EPHA board the opportunity to work to employ an attorney with employment law expertise who will craft a work contract for review.
After the regular meeting, the board met in executive session to discuss a potential land acquisition.
The next Estes Park Housing Authority meeting will be held on Aug. 13 at 8:30 a.m. in the George Hix meeting room in the US Bank building.