April 16, 2015
Crested Butte Deed Restricted Housing
If you’ve been searching for real estate in the Crested Butte area, chances are that you’ve come across a land parcel or home that seemed oddly underpriced. If so, it’s probable that you stumbled upon a deed restricted unit. I’m often asked, “What is a Crested Butte deed restricted unit, and how can I qualify?” The best way to determine if you qualify is to get in touch with the Gunnison Valley Regional Housing Authority. Generally speaking, you will need to prove that you’ve been living in the area for at least a year, and make 80% of your income within Gunnison county (and that one can be problematic for residents who are able to work online for an out of county company).
As a community, we have decided that one of the things that makes Crested Butte special is the locals that live here. And that’s the reason for deed restricted housing in the area- we don’t want to suffer the same fate as places like Aspen and Vail where most workers live down valley in other towns. That said, there are many types of deed restrictions in the valley.
Crested Butte 3% Cap
Many deed restricted homes in the Crested Butte area are “capped at 3%”. What that means is that no matter what the market does, a deed restricted homeowner can only sell their property for 3% per year more than they bought it for. For example, a $100,000 home purchased today can be sold for a maximum of $103,000 next year- and only to a buyer that meets the affordable housing requirements. There are some exceptions. For instance, making improvements, such as finishing an unfinished space, can also be added to the sales price.
Crested Butte “No Cap”
As the title suggests, this is a less restrictive deed restriction. With this restriction, the property can be sold for any price so long as the buyer meets the guidelines. “No cap” properties have sold for over $500,000 in the town of Crested Butte in the past. While this may not seem like “affordable housing”, those same homes may have been twice the price without the deed restriction.
Long Term Rental Deed Restrictions
In addition to deed restrictions related to the sale of the property, other programs are intended to increase the local rental pool. When a developer completes a new project, calculations are made to determine how many new employees will be needed to work at the new development. Those calculations may mean that the developer will need to provide rental space for a portion of those employees. In some cases, the developer will provide that space within the development itself. In others, they may choose to buy real estate and place a deed restriction stating that only long term rentals are allowed at that piece of property. Any subsequent purchaser of that property will only be able to rent it long term- no short term rentals and no residing or vacationing at the property either.
Another type of restriction is often placed on accessory buildings in the town of Crested Butte. In exchange for a break on water tap fees, homeowners can have a deed restriction placed on the accessory building. Like the above scenario, this deed restriction is meant to increase the local rental pool, so no short term rentals or personal usage is allowed.
This post only skims the surface of Crested Butte deed restricted properties. Every deed restriction is different, and both buyers and sellers are strongly encouraged to understand those restrictions. Deed restricted homeowners generally cannot own other properties within Gunnison county, except vacant land with the intention of building on it in the future. Financing deed restricted properties can be a challenge, so buyers will need to shop around for a local lender willing to make a loan on a deed restricted property. Common neighborhoods with deed restricted housing include Pitchfork and Prospect Homestead in Mount Crested Butte, Paradise Park and Poverty Gulch in Crested Butte, and certain lots in Larkspur just south of town.
Interested in knowing more about buying or selling a deed restricted property in the Crested Butte area? Contact me anytime! Stay up to date on everything that’s going on in Crested Butte and the local real estate market- Sign up for newsletters!