Colorado, especially the resort towns, is really having a hard time establishing consistent affordable housing around the state. Most municipalities are beginning to introduce or extend deed restrictions, which require certain affordable standards be set. The funny part is, property owners are mostly ok with it. Hardworking individuals in these areas are being priced out of the market and municipalities are combatting that. Some of the ever-present deed restrictions are as follows:
- Work and/or residence requirements
- Maintenance/ upkeep requirements
- Income requirement
- Appreciation caps
- Occupancy restrictions
- Length of restriction/ termination provisions
- Restrictions on short term rentals
- Restrictions on encumbrances
- RDFR or other default cure provisions
- Mortgage subrogation
One of the reasons property owners are willing to be taxed for the development of affordable housing is because they know their town needs it to prosper. Think places like Telluride and Steamboat. That ski lift will not move very far if there is nowhere for the operator to live. The wine will not flow as fast in the town center if the servers have nowhere to live. Telluride, in particular, has made huge strides to provide affordable housing and has seen a return on its investment through stabilization of tenancy and work force.
If you have deed restrictions and want to explore the effect on your rights, you should seek legal counsel. If you are a developer who is considering the effect of deed restrictions on lending, future sale or capped equity growth, you should too seek legal counsel to negotiate with the municipalities in a way that serves both needs. If you have any questions about the contents of this blog or if you need legal advice as to an issue, please contact the Beavers O'Connell Group at (720)538-0363, [email protected] or fill out a form under our Contact page.