Affordable housing: Too much or not
July 22, 2004
Sheryl Mobley knew shopping for a home in Eagle County
would be a challenge. She just didn't realize how much of a challenge.
She and her husband, Brian, spent two months looking for a home priced below $180,000. What they found were mainly condominiums, and ones with price appreciation caps at that.
Some say there's a surplus of affordable housing here these days. Mobley disagrees.
"I thought there was not very much within our price range, and we had to get something less than what we wanted," she said.
The issue of a there being a glut in affordable housing came up when the Eagle County commissioners considered changing the guidelines that put the onus on home developers to help provide affordable housing - generally considered homes priced under $262,000. While it is true there is more housing within the reach of the local work force than ever before, there's still plenty of demand, said K.T. Gazunis, the county's housing director.
"The facts don't support that statement for either purchase or for rental," she said.
Affordable homes selling rapidly
It's been just more than a year since construction crews broke ground on Miller Ranch, a 282-unit public-private venture between Eagle County and ASW Reality Partners known as Berry Creek LLC. As of this month, nearly 70 percent of those units have been sold, and only 90 units are left, said Bob Arguelles, director of sales and marketing for ASW Realty.
County officials knew there was a demand for the type of housing Miller Ranch offers, but sales have been even faster than expected.
Arguelles said his company is trying to work with the contractor to accelerate the construction schedule. All of the homes should be finished by October of next year.
Gazunis said Miller Ranch's popularity is probably largely due to price and the community's location in Edwards.
The home prices range from the low $120,000s for a one-bedroom condo to the high $260,000s for a four-bedroom single-family home. The condos are sold out, while demand for the single-family homes has been a bit slower.
"The single-family home buyer is a little bit different," Arguelles said. "A family would like to come and buy a home that's finished, and sometimes it's difficult for the single family to plan a year out."
Miller Ranch will soon focus its marketing efforts toward the single-family home buyer and the Hispanic community.
"There are families who have given a lot of their lives and effort to employers here, and we want to make sure we are placing a certain amount of effort out there," Arguelles said.
Quin Moya, sales manager for the new Two River Village housing community near Dotsero, said sales of the single-family homes there have been good. The location may be a bit of a disadvantage -Dotsero is about 43 miles away from Vail -but Moya thinks that will eventually change.
"The apartment is probably not the dream house for a family," he said. "We have affordable single-family homes, and there aren't a lot of them at all."
A two-bedroom, two-bath home in Two River Village starts at $193,000, Moya said. About 15 families are living there now, he said.
Too much, too little, just enough?
"I think there is adequate amount of affordable properties out there," said Rick Beveridge, owner of Beveridge Real Estate. "Every definition of affordable is different. As far as single-family homes, there are not enough affordable housing units. But I think everybody realizes you kind of have to make a couple of steps, start with a duplex, a townhome or a condo."
Properties like the townhomes in Eagle's new development, The Bluffs, seem to be selling like "hot cakes," Beveridge said.
The market is good for prospective buyers looking for properties priced below $260,000, said Joan Harned, co-owner and managing broker for Black Bear Real Estate Co. More than 100 units are available in the affordable-housing price range. Also, financing options for first-time home buyers - such as 100-percent financing and lower interest rates - make buying a home in Eagle County easier than it has been in a long time, she said.
The side effect of that, Harned said, is a glut of rentals. Beveridge agreed.
"I've seen an abundance of affordable housing with the Miller Ranch project," he said. "It's had a trickle-down effect on Eagle and Gypsum on rental units."
County statistics would indicate otherwise. Vacancy rates for the month of July were 3 percent for four-bedroom rental units, 2 percent for two-bedroom units, 1 percent for three-bedroom units and there were no vacancies reported for two-bedroom and one-bedroom units. Five-bedroom units were 20 percent vacant.
Wage vs. home prices
There are restrictions on Miller Ranch homes. Buyers must earn 75 percent of their income in Eagle County, must plan to use the home as their residence, and cannot own another home. Single-family home sales are limited to families of at least three. Units may only appreciate 3 to 6 percent a year, depending upon the average Eagle County wage.
Mobley and her husband ended up buying a Miller Ranch condo. She is concerned about the deed restrictions. Eagle County homeowners have generally enjoyed watching their home values increase rapidly every year, thanks to the skyrocketing local real estate market.
"I'm afraid of the resale value that we won't make as much as we would like to," she said.
But with real estate values increasing at a much faster pace than wages, county commissioners wanted to ensure Miller Ranch homes would continue to be affordable. That's why the appreciation is tied to wage increase, Gazunis said.
The median income for a family of four in Eagle County is $76,700. With a 10 percent down payment, that family could afford a $239,325 home, Gazunis said. With help from programs such as the county's downpayment assistance fund, that same family could receive an additional $10,000 for a down payment. They could then afford a home worth $247,707, based on industry-standard of 30 percent of a household's income paying for housing.
Current real estate listings show 101 units for sale listed at $262,000 or below. Only a few are three-bedroom units, and most are two-bedroom units. Last year, 68 single-family homes and 42 townhomes were sold in that price range, according to the county assessor's records.
"We know what's available," Gazunis said. "We know around 100 of those (homes $262,000 and below) sold last year and know only about 100 are available right now this year. We also note a huge portion of our population can't afford that without downpayment assistance."
Staff writer Tamara Miller can be reached via e-mail at firstname.lastname@example.org or by calling 949-0555, ext. 607.
Cost of Living in Paradise
Here's a breakdown of annual expenses for a family of four with a household income of $58,000 that owns a three-bedroom condominium or townhome of about 1,500 square feet.
Standard City, U.S.A
Personal Car: $10,457
Goods & Services: $19,487
Total costs: $58,000
Housing compared to Standard City (%): 100
Personal Car: $11,430
Goods & Services: $18,950
Total Costs: $75,552
Housing compared to Standard City (%): 346.6
source: Northwest Council of Colorado Governments, 2004 Cost of Living study