Another approach to affordable housing?
October 29, 2007
GLENWOOD SPRINGS ” A Durango-area organization is helping people buy homes by purchasing shares of the properties itself.
The La Plata County Regional Housing Alliance sees that as preferable to deed-restrictions as a way of providing affordable housing.
“The thing that’s so beautiful about this investment is that it follows the market,” authority representative Julie Levy said Friday in Glenwood Springs at the State of the Valley Symposium organized by Healthy Mountain Communities.
If housing costs continue to increase, the organization’s equity follows suit, giving it additional ability to help people with housing, Levy said during a panel discussion on affordable housing.
The approach also allows the homebuyers’ own equity to grow at a market rate, making it easier to upgrade later to another home in an appreciating market, Levy said.
The La Plata County alliance works with families by providing downpayment assistance or principal reduction, to cut down how much a buyer has to pay.
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Deed-restricted housing programs, such as those in the Roaring Fork Valley, reduce the asking price of homes by limiting in the property deeds how much they can appreciate in value per year.
One criticism of deed-restricted homes is that they may not keep up with appreciation in the real estate market, making it harder for people living in them to make the jump to free-market homes.
Susan Shirley, executive director of Valley Housing Partners, a regional housing organization based in Glenwood Springs, said she thinks both deed-restricted and shared-equity approaches have merit.
“I don’t know that it’s either/or,” she said. “I think it’s both.”
She said residents she knows of in deed-restricted housing in Carbondale “do not feel indentured in any way” by the limitations they face in equity growth. Restrictions that limit appreciation to 4 percent a year still result in considerable growth in a property’s value over time, she said.
But Shirley added that it still may be necessary to start providing help for residents who eventually want to step up to the free market.
Shirley said the shared equity approach might be a good one to pursue in western Garfield County, where there has been philosophical resistance to deed-restricted housing programs.
Levy said one benefit of shared equity programs is that they remove the stigma often attached to affordable housing.
“You can drive down the street and not know which house is affordable and which one isn’t,” she said.
Friday’s housing discussion came at a time when the gap between local housing prices and wages continues to grow, and many local employers can’t find enough workers. Panelists talked about a public-private affordable housing partnership in Eagle County, a housing investment fund that began in Denver but has spread to 15 counties, and a Boulder effort that creates its own housing programs and partners with others on projects as well.
Levy said she is like a lot of workers who are attracted to mountain communities because of the lifestyles they offer, but eventually will face a decision of whether to move to a place where housing is cheaper.
“If we don’t provide them with an opportunity to build wealth, then they won’t stay,” she said.