Can midvalley Tree Farm project deliver on promise to provide housing for ‘missing middle’?
Listing prices for first wave of resident-occupied units are around $2 million
When a massive midvalley project called the Tree Farm was approved in June 2017, the development team and Eagle County officials hailed it as a way to address the “missing middle” — people who cannot afford the free market but make too much to qualify for subsidized housing.
The Tree Farm approval included 150 deed-restricted units reserved for people who live or work in Pitkin, Eagle and Garfield counties. No caps were placed on the sales prices, but the high number of units combined with the relatively small unit sizes was designed to keep the residences “attainable” for the target market.
Now, nearly five years later, the initial wave of resident-occupied units is being marketed at between $1.43 million to $2.57 million for two-bedrooms, two-baths — spurring questions on whether they are truly be attainable.
Dave Marrs, a member of landowner Ace Lane’s development team, said that recently a lot has changed since the Tree Farm was approved. Demand for property in the Roaring Fork Valley and other mountain resort markets soared during the pandemic and hasn’t let up, he said. Meanwhile, construction costs skyrocketed to more than $600 per square foot, not including land and other “soft costs,” he said.
“It’s really unfortunate that the market has escalated at light speed,” Marrs said.
Eagle County Commissioner Jeanne McQueeney, who voted for the project in 2017, and housing authority executive director Kim Bell Williams contend that there was and remains a place for resident-occupied housing (RO) in the effort to meet the region’s housing needs. Both officials said deed-restricted rental and for-sale units are critical to address housing, but so are RO units.
“It’s not who we maybe think of in terms of affordable housing, but our doctors, our CEOs, people that run our businesses, they need places to live as well and they can afford more than what we think of,” McQueeney said.
The Tree Farm earned approval after a drawn-out, bare-knuckle fight between Lane’s allies and hundreds of opponents of the project. There were eight hearings by the Roaring Fork Valley Regional Planning Commission, which recommended denial, and five hearings by the county commissioners, who granted approval by a 2-1 vote.
Marrs, chief operating officer for Lane’s team, said they altered their proposal numerous times in response to comments Eagle County officials made in the hearings and in negotiations with the county staff.
The Tree Farm is located in the El Jebel area across Highway 82 from Whole Foods. Lane’s final application proposed 340 residential units and 135,000 square feet of commercial space between the highway and his water ski pond known as Kodiak Lake.
Eagle County’s code required that 25% of the residential units, or 85, be affordable housing. At one point, Lane’s application proposed 128 price-capped units and 41 RO units, far exceeding the requirement.
The county’s minutes from the June 26, 2017, county commission hearing noted that Lane spoke about his interest in housing.
“His focus was on attainable housing, and he wanted to partner with Eagle County,” the minutes said.
As the hearings were coming to a close and the commissioners were inching toward a vote, Lane and county housing authority reached an agreement for a new affordable housing plan. The Tree Farm would provide 40 price-capped rentals and 10 price-capped sales units along with 150 resident-occupied units with no caps. There was a catch. The RO units must be marketed exclusively for 60 days to people who live or work in the three counties of the Roaring Fork Valley. After that, they could be sold to any buyer from anywhere. The out-of-valley buyers would be forced to pay a 1% fee. The revenue would go into the county housing fund.
Any time an RO is resold, the 60-day marketing to local residents or workers remains in effect.
Marrs said county officials dictated the affordable housing mix.
“That’s the rules we’re playing by,” he said.
Opponents of the project criticized the affordable housing plan. They said the RO scheme wouldn’t provide any real affordable or attainable housing. The Tree Farm, critics said, would add to the valley’s affordable housing woes rather than ease them.
The ‘missing middle’
In the county’s eyes, the arrangement meant that Lane was exceeding his requirement for 85 affordable housing units. The Tree Farm received credit for the 40 rental and 10 for-sale units with price caps. The project received extra credit for committing to rent 25 of the units to households making 80% or less of the area median income. The project also received partial credit for the RO units rather than a one-for-one credit.
“They exceeded the requirement for the affordable housing guidelines,” McQueeney said. “They needed to have 85 affordable housing units and ended up with 100 (credits). So, we did end up with more. How affordable, I’m not sure. We’re in such uncharted territory with what’s happened with the market in the last year and a half.”
Marrs said it was always the Tree Farm’s intent to provide housing for people who live and work in the valley. He told the Aspen Daily News in a Nov. 30, 2019, article that the project would target the “missing middle” with the RO housing. “People don’t earn enough to go out and buy an $800,000 or $1 million home at River Valley Ranch or wherever and they make too much to qualify for affordable housing, so they’re stuck,” Marrs said then.
But Lane and his organization were focused on developing the land and they aren’t the developer of any of the 340 residences, a hotel or the commercial space. Once they received the approvals, they completed the infrastructure and then sold the four sections of land and entitlements to outside developers.
Big developer interest
Two Dallas firms, Realty Capital Residential and Lang Partners, are building free-market apartments and the 40 price-capped apartments on the east side of Kodiak Lake.
A different Dallas firm, Bedford Lodging, is building the 122-room Hoffman Hotel near the intersection of Willits Lane and Highway 82.
In between the hotel and apartments will be a 72-unit independent living complex for people ages 55 and older. It is being pursued by Essex Communities of Omaha.
The last major component of the project is being purchased by Brown Family Holdings, controlled by Scottsdale, Arizona, developer Walt Brown Jr. His project includes commercial space, the 10 price-capped affordable housing units and a project on the western side of the ski lake called The Lakeside — Luxury Lakefront Residences.
So far, 14 of those luxury residences have been listed in the Aspen Multiple Listing Service even though they haven’t been constructed. Those are the RO units that must be marketed for the first 60 days to residents or workers in the Roaring Fork Valley.
The least expensive of those units is a one-bedroom, one-bath residence with 722 square feet. The asking price is $963,040.
There are 11 two-bedroom, two-bath units that range from about 1,000 to 1,800 square feet. The asking prices range from $1,433,888 to $2,574,835.
A three-bath, three-bedroom unit of 1,828 square feet is listing for $2,550,060.
The 14th unit is a four-bath, three-bedroom unit of 3,287 square feet with an asking price of $5.5 million.
Will they sell?
McQueeney acknowledged that the jury is out on whether the RO units at the Tree Farm will serve the purpose intended. Just because the asking prices are high doesn’t mean the seller will receive it, she said.
“I think the numbers are very speculative,” McQueeney said. “They haven’t pulled any building permits as of yet. I suspect that the price will come down as people understand what the deed restriction really is.”
Not only must out-of-valley buyers pay the 1% fee, all units in the Tree Farm are prohibited from short-term rental for less than 30 consecutive days. McQueeney believes that will reduce the sales prices because some prospective buyers might have counted on short-term rentals to help cover their mortgages.
“Will they come down to what we were thinking back when we approved it in 2017?” she asked. “The market is considerably different. I don’t know if it is $2 million worth of difference. We’ll have to see how this really does play out when it’s actually getting built.”
Brown, the developer of the Lakeside unit, said they are already proving popular. He said there are seven reservations from people living in the Roaring Fork Valley, including some from Eagle County.
Based on the early signs, he said the RO designation is “absolutely working.”
Brown credited Lane with doing everything he could to create a project that will be something the Roaring Fork Valley is proud of and one that helps “chip away” at the affordable housing crisis.
“I think (the Tree Farm) absolutely helps,” he said. “I don’t think it gets solved overnight.”
Brown and his team are working on future phases of their part of the Tree Farm. He said it is too soon to say what the price points will be.
“Costs went up 18% this morning due to two suppliers,” he said.
Meanwhile, the price-capped sale units are a popular commodity at the Tree Farm.
“People are chomping at the bit,” Bell Williams said. The housing authority will start a waiting list for a future lottery to determine what buyers get first crack at the price-capped units.
Bell Williams is optimistic the RO units will also prove popular with “missing middle” buyers from the Roaring Fork Valley.
Tree Farm: We delivered
Marrs said he believes the Tree Farm lived up to its obligations despite the uncertainty on whether the RO units will actually go to residents of the valley.
He said the Tree Farm provided several public amenities, including dedicating land to the Roaring Fork School District for affordable housing that the district would pursue independently.
Tree Farm built a solar array to offset some of its energy needs.
It provided 20 parking spaces for a Roaring Fork Transportation Authority lot as well as $400,000 cash. It also helped fund a pedestrian underpass of Highway 82 that will connect the Tree Farm to Willits Town Center.
A non-motorized path around Kodiak Lake will be open for public use.
“The Tree Farm did what we were asked to do,” Marrs said.
The former girlfriend of Jean-Pierre Conte, the chairman and managing director of the private equity firm Genstar Capital, filed suit Thursday in Aspen claiming that Conte committed assault, battery, and violated the terms of a 2021 separation agreement. Hillary Thomas claims in her lawsuit that during her more than nine years with Conte, she helped parent his four children and her two children “whom they raised in a blended family.”