With the developers of the Old Cutters subdivision slated to build 25 affordable housing units, Hailey city officials are working to make sure that the increase in supply appropriately meets the needs of prospective home buyers.
At a City Council meeting on Monday, Oct. 10, City Attorney Ned Williamson presented council members with a revised draft of his Workforce Market Community Housing Deed restriction, which would be specific to 12 of the Old Cutters units.
Unlike the deed restriction currently used by the Blaine County Housing Authority for affordable units, a restriction that limits appreciation to a maximum of 4 percent and qualified buyers by income, Williamson's proposal would make units available to a much wider market.
Based on a model developed by the city of Telluride, Colo., the main tenet of this alternative deed restriction is that buyers must live and work full-time in Blaine County.
Williamson presented a similar proposal to the council at a special meeting in September, returning to the issue on Monday with a number of minor changes aimed at increasing the pool of prospective buyers. The changes included a reduction in the required number of hours of employment from 1,762 to 1,500 in order to further helping the valley's numerous seasonal employees and lowering the required number of years of residency and employment for retirees.
While there would be no cap on appreciation, the deed decreases the likelihood of real estate speculators by instituting an "anti-flip clause" that would charge a percentage of appreciation realized if the house were to be sold within the first 7 years. Speculation is further discouraged by disallowing anyone with a net worth of more than twice the sale price of the house from qualifying for purchase.
In addition, the council requested that Williamson amend his draft to state that a buyer cannot own any other real property, rather than simply developed property as defined in a similar alternative deed restriction being worked on by the Blaine County Housing Authority.
However, even with all the support for Williamson's proposed deed, two complex issues remained unresolved at the meeting, effectively keeping the deed from being approved.
First is the question of who will monitor the housing units to ensure they are sold to qualified buyers and that those buyers abide by the regulations set out in the deed, as well how the monitoring will be funded. Currently, the city has a contract to pay 2 percent of a sale price to the authority for performing these administrative duties. Council members agreed that the city should continue to contract this service out, but said that the percentage should be carefully calculated to ensure that correct amount is being paid for the administration.
"The city should not be in the business of monitoring and managing housing," Councilwoman Carol Brown said.
Causing even more concern for the city is the matter of which entity, the city or the housing authority, would be in charge of the deeds to the units in question.
"The issue is what happens if there's a lack of performance by the authority or Hailey and the contract is canceled," Williamson said during a recent interview.
In addition, Williamson said that while the city of Hailey has been around for quite some time, the housing authority has not, and, therefore, there's a legal question of what would happen to the deeds should the authority dissolve in the future.
Housing Authority Executive Director Jim Fackrell said he would discuss this issue with the authority's board members at their meeting on Oct. 17 and bring it back to the Hailey council at its next meeting on Monday, Oct. 22.
