Avon takes another look at deed-restriction policies
Updates address lottery process, inheriting properties, ownership of other real estate, remote workers
Chris Dillmann/Vail Daily
As Avon works to grow its community housing stock, the town is taking another look at its revised community housing policies.
Avon adopted updated community housing policies in September 2023 for the first time since the early 1990s. On Tuesday, the Town Council looked at revisions to the policies that handle deed-restricted homeowner concerns and align with market, industry and state-level changes.
Avon’s deed-restricted housing units are meant for residents working 30 hours or more in Eagle County. Price-capped units are subject to income limitations of 100% to 140% of area median income for a four-person household.
When the policies were first created, they only served one deed restriction. Now, the town has many deed restrictions, with several more due to come online in the near future as Avon focuses on expanding its community housing opportunities.
The Avon Community Housing Policies serve as a secondary governing document employed alongside the recorded deed restrictions that accompany all community housing units. The community housing policies provide information for developers, buyers, sellers, owners and property managers of deed restricted properties.
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Though this has not always been the case, from now on, deed restrictions will point to the housing policies, providing details that can be adapted. The town aims to review the housing policies annually.
The Town Council reviewed proposed updates to the policies including revised chapters, updated definitions and a few minor program additions. All decisions made during the meeting are non-binding and meant to give direction to town staff.
Changes address ownership of other real estate, inheriting deed-restricted units
The Town Council discussed whether the owners of the town’s deed-restricted units could own other real estate.
Most other jurisdictions in Eagle County have limitations on owning other real estate.
“There is a large investment being made up-front, whether it is developing these units or paying for a buy-down,” said Patti Liermann, Avon’s housing planner. “If that amount of money is going into purchasing a unit for someone who is also then holding other units in real estate, that’s not going to the highest and best use. That this should be going as a community benefit to someone who is just trying to get their foot in the door to stay here in the community, and we should not be spending that money on someone who is building up a real estate portfolio.”
Town Attorney Nina Williams said she has seen the restriction on owning other real estate across the municipalities she works for.
The counter argument is that banning ownership of other real estate limits investment and options for a deed restricted unit’s resident or owner. “A very strict, ‘you can’t own other property,’ puts a limitation on different options for financial planning,” said Eric Heil, Avon’s town manager.
Some members of the council were in favor of supporting those who inherit or purchase additional real estate. “It’s a double-edged sword, but I don’t think people that are rich are going to be living in these units anyway,” said Chico Thuon, council member.
Council Member Lindsay Hardy said she was “very torn” on the issue, as real estate outside of Eagle County can be a more affordable investment. On the other hand, “sometimes, I think that these programs were meant for people who can’t afford anything else, anywhere else,” she said.
The council decided to allow for the ownership of property outside of Eagle County, but only after the unit owner qualifies for the deed restriction. Deed-restricted unit owners are also permitted to own commercial property for business use or vacant land within Eagle County.
The question of owning property outside of the deed-restricted unit led to a discussion about the inheritance of deed-restricted units.
Avon’s standard procedure for selling deed-restricted units is for the unit to go to a lottery of others on the wait list. But this is complicated by the inheritance process.
Property law requires that if property, including deed-restricted property, is listed in a will, that it be conveyed to the named person or people. However, as owners of deed-restricted units must meet a certain set of standards, the process is a bit more complicated.
Some residents of Avon’s Wildwood deed-restricted units specifically requested that the town allow them to transfer the unit to their qualified child.
“They’ve raised their family there their whole life, they’re going to live there and retire, and when they die, that’s the only place their kids can afford to be back in the county, and the place they call home, that they should have that ability,” Heil said. “I believe not many deed restrictions, if any, have provisions like that.”
Avon will give inheritors of such a unit a year to meet the deed restriction qualifications. If they do not, town staff will assist the heir(s) in selling the unit.
The council rejected the suggestion that owners also be able to gift their deed restricted unit to a relative within their lifetime. Owner-directed sales of deed-restricted units are also not permitted; units must go through the town’s lotteried resale process.
How to qualify for an Avon deed-restricted unit
When the council first approved the updated community housing policies, the exact details of the lottery process through which people would receive their community housing unit were still in the works.
On Tuesday, Liermann and Heil presented a more complete version of the lottery process. First, entrants will be narrowed by applicable income. Then, applicants will be narrowed by the amount of time they have lived or worked in Eagle County, with more years earning additional lottery entries up to three total. Finally, there will be a random lottery amongst those who were left.
Heil’s proposed system of lottery entries would allocate additional entries to those who had lived and/or worked in the county for more time. The base threshold for a lottery entry would be living in the county for four years.
Amy Phillips, Avon’s former mayor, provided feedback during public comment that the town’s proposed income limitations for its price-capped units were too restrictive.
“I don’t think you want to always be doing the lowest income levels,” Phillips said. “Because if the people that are in the middle or upper never get a shot, we’re going to lose our middle class.”
“The people I hear most frustration from are people that have been trying to buy a place now for the last 10 years, who now have succeeded up the income chain, and yet they can’t qualify because it’s always going to the lowest AMI (Area Median Income),” Phillips said.
Avon’s community housing policies do not permit remote workers to qualify for a deed-restricted unit, with exceptions. Any consideration of remote workers will require an acknowledgement of their remote status from their employer and the “remote work must substantially benefit Eagle County to be considered for eligibility,” according to the community housing policies.
The wording is “intentionally kind of vague,” Liermann said.
This is because the town or the program administrator must approve any remote work applicants, and each remote worker’s situation has the potential to be different from the last. For example, an engineer whose company is based in Denver but who works on projects exclusively in Eagle County may qualify for a deed restricted unit.
Every year, the town conducts a compliance check-in on its deed restricted unit owners, including asking for their two most recent paystubs. If the paystub comes from a non-local company, it prompts a conversation with the homeowner about where their work is based.
