Breckenridge sees ‘unprecedented demand’ for its program that pays homeowners to convert

Breckenridge has a slew of purchases and projects on its docket and not enough money to get it all done. 

In addition to learning about “heavy appropriations” needed to expand the housing budget to complete 2024 housing projects, Breckenridge Town Council also found out about another dwindling housing budget at a Tuesday, June 26, meeting.

Town manager Shannon Haynes told council members that they will be asked soon to approve appropriations for the housing projects largely because of the “timing of certain expenses falling into 2024 instead of 2025.” Council will learn more specifics on exact appropriation requests at its July 9 meeting, but Haynes did mention an appropriation was needed for the Stables Village, a neighborhood that will feature 61 workforce housing units, including five single-family units, 38 duplex units, and 18 triplex units.

Housing manager Laurie Best informed council that the town has already spent around 85% of its budget for one of its most popular affordable housing initiatives, Housing Helps. The project is a deed restriction acquisition program used by Summit County and Breckenridge to incentivize homeowners by paying them to put a deed restriction on their property so it can be exclusively sold to a local in the workforce. The program was created out of a need that was identified in numerous housing studies. 

The program restricts how a property appreciates and impacts what it can be sold for. In Breckenridge’s description of the program on its website it notes “because the deed restriction will restrict how the property may be used, it is likely that the future value of the property will be impacted by the deed restriction.”

At the beginning of the fiscal year, an approximate $2.5 million budget was set for Housing Help. As of the last week of June, $2.13 million of that budget has been spent or committed to be spent. 

Much of the council expressed that they were glad to see the program being utilized so much that the budget is nearly out. 

“Running out of that fund early is great,” council member Todd Ranking said. “Good job. … When we talk about keeping the authenticity of Breckenridge, I think a lot of that can be protected by having existing homes continue to have workforce in them.”

Best said that town staff members believe this to be an important program and one that should continue in the community. Yet, resources being eaten up at a quick rate because of the current “unprecedented demand” for the program the town is seeing has staffers thinking priorities need to be set when it comes to the town’s contribution for the program for future years. Best ran council through the town’s plan to stretch the dollars it has left for the program. 

Housing Helps offers two types of deed restrictions, a full deed restriction and a light deed restriction. Best said some changes are being made to the light one. 

Generally, the program pays an owner 15-19% of a property’s market value to put a light deed restriction on it. Alternatively the program pays 20-30% of a property’s market value for a full deed restriction, which has more requirements to ensure affordability including a 3% appreciation cap, according to the town’s website.

Best said the town can only really afford 15% for light deed restrictions with what it has left in its budget for the rest of the year. 

The change was also discussed at a meeting for the Breckenridge Housing Workgroup on June 12 where the group discussed the true value and benefit for a light deed restriction. 

Council also asked staff if there were examples to show the true benefit of a light deed restriction given the lack of an appreciation cap.

An issue prohibiting the town from determining the value is a lack of strong, accurate data. Housing Helps was launched just ahead of COVID-19, and the program was used at times where the housing market went through drastic changes because of the pandemic, staff members said. 

Best said a concern is that the price will creep without a cap and will become unaffordable to the workforce at a certain point, which defeats the purpose of the program. 

Council did not give staffers concrete direction on what the future of the program should look like and wanted an analysis on the actual resale prices of properties with light deed restrictions. 

Best said, as of now, the housing staff will not be asking for budget appropriations for the program, but it could come in the future.