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As mountain home prices rise, Vail turns to deed restriction program to help with affordability

Vail
Posted at 12:52 PM, Sep 22, 2021
and last updated 2021-09-23 02:08:01-04

VAIL, Colo. — Sometimes life comes down to a little luck. For Robyn Smith, a life-changing moment involved a bingo ball and a lottery with 22 other people.

Smith is a small business owner in in Vail working on business development, strategy and consulting while her husband works at the resort.

Both of them work full-time and are paid a decent salary. And yet, even with their dual incomes, the couple has not been able to afford a house in town.

Instead, the couple has bounced from one rental property to another over the years. They paid roughly $3,200 a month in rent.

One place she stayed in had a broken refrigerator along with the high rent; another didn’t have any heat. Still, the couple considered the rental pricing a great deal for the area.

“To make it in Vail you’re going to make it 12 months at a time,” Smith said. “If you ask somebody in Vail how long they’ve been here, they’ll tell you in seasons how long.”

The couple’s story is not unique in Vail. In mountain communities across the state, housing is unavailable and unaffordable. The average price of a single-family home in Vail is around $2.3 million.

“When the average price of a home in a community is $2.3 million, you have a real challenge in front of you,” said George Ruther, the housing director for the town.

During the pandemic, more people who have the ability to work remotely are also moving to the area, making housing more expensive and more difficult to come by. Short-term rentals are also impacting the housing supply.

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One of the biggest challenges with the area, though, is the lack of land available. The town is surrounded by U.S. Forrest Service land with very few opportunities for expansion. Ruther describes it like an island in a sea of trees.

He doesn’t see a way for the town to build its way out of the housing problem.

“I don’t have the ability to grow and expand our municipal boundary and so we have identified that we need to do a better job of protecting those existing homes that are already here in town,” Ruther said.

In 2018, the town came up with the Vail InDEED program. It is a program where the town pays property owners to put a deed restriction on their homes. The goal is to place restrictions on 1,000 homes by 2027.

When the property owner goes to sell the home, they must sell it to someone who will live in it full-time and not treat it as a second home or a rental property. The restriction also buys down the purchase price of the home to make it more affordable for residents.

So far, the town has purchased 162 deed restrictions on homes, investing roughly $11 million in total.

“InDEED, I’ll be honest, it has been a game-changer. It was that program that kind of moved the needle for us in town,” Ruther said.

He said the more deed restrictions the town purchases, the more employee housing it can offer without new construction, traffic, and more.

“It’s really about taking advantage of what you already have in place in your community,” he said.

The town is also in the process of building some new employee housing that will have deed restrictions. The deed restriction program is so popular that the town has a waiting list of applications for people looking for an affordable home.

Vail now uses a lottery system to determine who will have a chance to pay for a deed-restricted home when it becomes available.

Smith was one of the recent winners of the InDEED lottery system. She will now have the chance to buy a townhome for $525,000.

“I was crying, I was screaming, I was jumping around in the car. It was the best thing to ever happen to us,” she said.

While she was celebrating the opportunity, the excitement was tempered because Smith knows 22 other families were not as lucky and will have to wait for another opportunity to be able to afford a home in the community.

Once the couple is finally able to move in, she says this will be their forever home since they likely will not ever be able to afford another house in town.

She applauds the town for intervening and hopes it will expand the program in the future.

“It isn't a charity event to have affordable housing. It’s an investment in the community. It’s an investment in businesses that thrive off of that workforce,” she said.

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The Vail InDEED program is so popular it has been replicated by towns across Colorado, as well as in other states.

The deed restrictions are not going to solve all of Vail’s housing affordability needs, but Ruther says they are an important part of the equation as the town looks for short and long-term solutions to a problem that isn’t going away anytime soon.