Real homes for real people - really

Affordable housing becomes more realistic

November 11, 2001
By Jane Stebbins

SUMMIT COUNTY - David O'Neil wasn't sure his idea of a new urbanist, affordable housing project would take off in the High Country, where the median price of a home hovers near the half-million-dollar range. "We were breaking ground in a lot of different ways," he said. "We were breaking ground with building methods, with land planning and in terms of the ratio of locals' homes to market homes. We were going somewhere no one had ever gone before. I wouldn't have done it if I didn't think it would work."

Housing stock

Twenty years ago, there was a housing glut in Summit County. Homeowners were selling their houses for less than they paid for them. But 10 years ago, that began to change, as the county began experiencing a population boom.

"All of a sudden, our population was exceeding our housing stock," said County Commissioner Gary Lindstrom. "People began renting out rooms, allowing 10 people in one house. Rent went from $400 to $800 a month. All of sudden, people were spending more than 50 percent of their salary on rent."

Locals soon were priced out of the market. Employers began finding it difficult to locate employees. People abandoned their dreams of living in the mountains and moved "back home," wherever that might be. Increasingly, Summit employees started to commute from Kremmling, Leadville, Alma and Fairplay.

And in the ensuing years, Summit County's housing situation only got worse.

"The definition of affordable housing was discussed a lot," Lindstrom said. "People became very sensitive to the fact that we kind of hadn't planned very well.

Lindstrom knows of people who purchased homes in the late 1980s, and, in the space of a year, were able to sell those homes and upgrade - substantially - on the profit.

Seeing the demand, developers started building in the early 1990s - but it was all the wrong stuff, Lindstrom said.

"They built housing that was not affordable or attainable," he said "That's when we saw the change in the market, from $200,000 houses to $500,000 or $600,000 trophy homes. That wasn't meeting the housing in the community. These weren't houses the average person could afford."

That's when county officials realized they'd only be paying lip service to affordable housing if they didn't step up to the plate. The housing authority, which was relatively inactive when there was a glut of housing on the market, was resurrected. Then-County Commissioner Marsha Osborn proposed a "linkage program," that would require a percentage of real estate sales prices fund affordable housing. Realtors and developers shot it down. "It bombed, Lindstrom said. "Big time."

Its failure, however, was the catalyst for the Summit County Housing Authority to develop new funding methods.

Under its auspice, Ophir Mountain, near Bill's Ranch in Frisco, was born. The Archdiocese of Denver stepped forward to build Sierra Madre in Silverthorne. A private developer and the town of Silverthorne worked to make the Blue River Apartments a reality. Breckenridge town officials worked with another private developer to create Pinewood Village on Airport Road.

And there were the flops - and proposals that flopped. "I remember Wintergreen, the housing built for married employees at Keystone," Lindstrom said. "They started at $300,000. It was kind of a joke."

Two other projects, Spyglass townhomes in Wildernest and Kenington Place on County Road 450 north of Breckenridge, were great deals for first-time buyers. But there were no restrictions put on the properties, so new owners soon resold their units - sometimes at a substantial profit.

New urbanism

That's when David O'Neil wandered into the High Country with his idea of new urbanism. The lawyer-turned-developer had built a similar project - Poplar House - in Boulder, and thought it could work in a ski resort. New urbanism encourages interaction between neighbors by placing smaller homes closer together and utilizing porches on which people gather to talk. Each of O'Neil's homes faces a community green, where people can gather and kids can play. And of utmost importance, the homes would be owned and occupied by locals.

Summit Housing Authority Director Gordon Ferris had not only heard of "new urbanism," he'd lived it for 13 years, in an 1889 home in Alexandria, Va. "It's an old idea that's been resurrected," he said. "One thing it does is promote interaction between neighbors, which is lost in a lot of suburban, traditional designs built from the 1960s on."

The neo-new urbanists touted their front porches, an element that disappeared with the advent of air conditioning. The homes are closer together, the streets are narrower.

"Whether it was intentional or not, it had the effect of bringing people closer together in the neighborhood," Ferris said. "They're much more efficient in their density, they're a more efficient use of the land; you can get more people per acre than in other types of projects. That not only helps the developer maximize profits, under an affordable housing context, it makes the project more feasible."

When the developer passes those savings along, it becomes more feasible for would-be buyers.

The need was here. In the mid-1990s, the Joint Upper Blue Master Plan Committee wrote that a lack of affordable housing was one of the most pressing problems in the valley, and over the long-term, could lead to a loss of community diversity and vitality.

In 1997, Jane Harrington, then-director of the housing authority, said 583 affordable housing units were needed in the Upper Blue Valley - after Pinewood Village and Kenington Place were built. Front Range-based research firm RRC Associates said another 330 units were needed for people making between 80 and 120 percent of the Area Mean Income (AMI). Today, the AMI - meaning half the people make more and half make less - is $64,500.

The success of O'Neil's plan, however, hinged on a few key elements he wasn't sure he'd find.

"It had to have proximity to urban services," he said. "And the property has to be challenged in some respect - title problems, in litigation, environmental issues."

He found it on an 85-acre site south of French Creek subdivision and east of the town boundaries of Breckenridge. It was a rolling landscape - filled with boulders left over from dredge boat mining. The Wellington-Oro mines upstream were polluting the ground water. The owner wanted to sell, and after negotiations, agreed to spend some of the proceeds of the sale for mine reclamation.

"When I first saw it," O'Neil said, "I knew it was a home run." Instead of contaminated water and rolling hills of rocks, he saw houses with views of the Ten Mile Range. He saw homes within a 20-minute walk to downtown, the recreation center and day care.

"We promised the world," O'Neil said. "The town took a big risk here. Without that risk, this wouldn't have happened. I think it's worked. Look at the original plans. I think we nailed it."

Breckenridge town officials were intrigued, said Mayor Sam Mamula. "I was a big advocate of new urbanism," he said. "But the only model we had was the the way they do it in Aspen. It definitely works."

Residents agree. Tracy and Bill Watterson moved to the Wellington Neighborhood from north of Breckenridge and feel they get a better sense of community in their new home.

"I like the concept of the neighborhood, that the homes sit around a green space where the kids can go out and play with the other kids," Tracy said. "It's like the old homes, where you could talk over the fence to each other. It's worked really well for us."

Breckenridge Town Manager Tim Gagen and his wife moved there from a townhome in Frisco, where they knew about four or five people, and were surrounded by second homes and short-term rental units.

"Here they're all local residents, lot of of kids, lot of dogs," Gagen said. "The neighborhood feel has worked out real well."

That's now. In 1998, when O'Neil presented the plans, he had trouble getting people to pay attention to him as he talked up his project. Then town planners tussled over the plans. The parcel of land was in the county, and in a land-use district that allowed one unit of density - essentially, one house - for every 20 acres of land. And under the guidelines of the Joint Upper Blue Master Plan that encouraged downzoning in the valley, town council members weren't sure if they should allocate more density to the project.

But it was for affordable housing for locals, who were leaving the county in droves. The community, town council members felt, was unraveling because people couldn't afford to live here.

"I don't think it was so much a tussle than it was all of us trying to feel our way through this," Mamula said. "There were mine fields all over the place. There was no model for it in the county."

"It was a brilliant idea," Ferris said. "David took some land that had no density on it, and because of the town's need for affordable housing and his belief in the new urbanism model, he took this piece of property and convinced the town to transfer in all the density that was needed." The town eventually gave O'Neil the density he needed, annexed the land to the town and waived sewer and tap fees.

"He had to make it affordable without implying it's something below standard," Mamula said. "David did a good job. I know of nobody else who would go through what he went through; that was a lot of brain damage. There were a lot of other ways he could have made money, and he kept coming back for more."

Home sweet home

When completed, the first phase will comprise 64 homes. Forty are currently occupied. An additional 58 units are planned for the second phase, which also includes elements even more controversial than new urbanism: a live-work theme with retail uses - a coffee shop and post office boxes among them downstairs - and residences above. He proposes a fire station - and still is optimistic he can get a grant to build it and convince the Red, White and Blue officials to operate it. "We're still working on it," he said.

Everything hasn't quite worked out as planned. Building costs were high, and O'Neil was forced to increase the sales price of some of the units, Ferris said.

"Coming from the Front Range, people always said we'd be over budget," O'Neil said. "It was a steep learning curve. It was steeper than we anticipated."

The homes in Wellington Neighborhood sell to people making 90 to 120 percent of the AMI. That is comparable to units offered in Lance Rader's Vista Point across the street, but higher than the housing authority's requirements of 80 percent or less.

Such projects, Ferris noted, are only possible if heavy subsidies are granted and deed restrictions implemented.

"I'm the one that led the charge on things like maintaining affordability in perpetuity," Mamula said. "More than anything, I was concerned about that. It had to make sense for the viability of the project. In Ferris's eyes, and in the eyes of many town council members, it's also an economic development issue.

"The cost of employee turnover is really high," Ferris said. "Everyone knows people who've moved out of Summit County because they couldn't buy a home, or the home they could afford is a one-bedroom condo where they could move somewhere else and and buy a house for that kind of money." The affordable housing stock in Summit County is filled with a wide array of people - firefighters, teachers, police officers, grocery store clerks, ski area employees, town officials. Suspiciously absent from Summit County's affordable housing developments are empty trophy houses that belong to second homeowners.

"In order to not turn into an Aspen, we need to create a housing stock of affordable housing for working folks in the community," Ferris said. "To my constant pleasant surprise, all community members are aware of this. It hasn't been a hard sell to convince people of the problem."

Summit County hasn't, by a long shot, solved it's affordable housing shortage.

"We're about halfway there," Lindstrom said. "We're moving in the right direction, but we've only just begun. A lot of this is market driven, too. A year from now, the market could shift considerably."

Ferris awaits November 2002, when voters will determine the fate of a yet-to-be-crafted ballot issue involving taxes and affordable housing. Gov. Bill Owens recently signed into law a bill allowing multi-jurisdictional housing authorities to ask voters for approval to increase mill levies or sales taxes or implement an impact fee on new development. The money would fill the gap between what people can afford to buy and the actual costs of homes.

The idea is not new. Aspen utilizes a transfer fee: 1 percent of the sales price of all homes goes to the housing authority - and day care, another hot issue for resort communities. Winter Park has an impact fee, charging a set price for every square foot of a new home. Basalt has inclusionary zoning: for every 10 homes that are built, a certain number have to be affordable. Telluride does that as well, but developers can opt out and pay a fee to the housing authority, instead. Other communities have programs to help people finance their first homes.

"Right now in Summit County, we have nothing," Ferris said of the housing authority's stock. "I firmly believe if we envision competing with other resorts for guests, we need to have an affordable housing program. We can't expect the town of Breckenridge to contribute $1.5 million every time we want to do a project. That's a lot of money." Ferris also hopes the private sector will kick in with building more affordable housing projects.

"The whole idea is that we want to encourage private developers to build these units," he said. "If we can convince them sales will come and buyers can make money on these units ..."

They have done that to small extent.

Developer Tom Silengo has incorporated affordable housing units into his Retreat on the Blue in Silverthorne and Drake Landing in Frisco. Sixteen units at Hidden River Lodge in Keystone are dedicated to resort employees. Rader's Vista Point will have about 16 deed-restricted units. Tom Warnes's Silver Mountain Village is proposed to offer a mix modeled on Vista Point. In the meantime, Mamula is contemplating a move from his in-town home to the Wellington Neighborhood. He fields phone calls every week from magazine writers eager for information about the project.

"I believe it's on the cutting edge," Mamula said. "I really believe it. The neighborhood thing works; I don't think there's any doubt about that. There are kids up there, there are dogs; it's truly a neighborhood." "At the end of the day," O'Neil said, "What people like is that real people live there."

It's a real neighborhood, for real people.