Friday, April 4, 2008

And then there were 5

County allows affordable housing units to go on free market

Express Staff Writer

The Blaine County Commission has renegotiated a deal with the developer of 12 deed-restricted community housing units at Agave Place. Under provisions of the deal, six of the units will be offered at a lower price while the remainder were released to the free market. Photo by David N. Seelig

At first there were 12; now there are five.
For close to a year, 12 deed-restricted community housing units called Agave Place, located in the mid valley near the intersection of state Highway 75 and Buttercup Road, sat empty, the purpose behind their construction not realized. The Blaine County Commission last month took measures to correct that.

The commission turned six of the units, all two-bedroom, over to developer Henry Dean to be sold on the free market. It also lowered the deed-restricted price on five of the units, all one-bedroom, from $173,500 to $123,605. The remaining one-bedroom unit had already been sold, and because it was sold at the prior $173,500 price, the deed restriction for that unit was dropped so the owner could realize market-rate appreciation.
Agave Place was built as part of construction of Village Green, a high-end subdivision adjacent to The Valley Club, approved by the Blaine County Commission in 2005.
Approval of Village Green and Agave Place came before Blaine County enacted a so-called linkage law, so the deed-restricted prices were higher than would be approved now, said Blaine County Housing Authority Executive Director Jim Fackrell.
The Blaine County Housing Authority did not serve as a broker in the deal but acted as an advocate for community housing in the negotiations that effected last month’s decision.
“This product did not match the demographics of our applicant database,” Fackrell said.
Fackrell said the 12 units were marketed in income category 5, which is 120 percent of the median Blaine County income. For a one-person household, that translates to $59,556. He said the majority of the applicants in the housing authority’s database are in income categories 3 and 4.
Income category 3, 80 percent of the median income, translates to annual earnings of $39,704 for a single person. Income category 4, which is 100 percent of the median income, translates to $49,630 for a single person.
At their new price, the Agave Place units will be more within reach of buyers in those categories.
“Part of the pressure that the county was feeling was that the construction lender was threatening foreclosure,” Fackrell said. “Had it gotten into foreclosure the deed restriction could have been lifted, possibly on all of the units. And they could have been sold at auction to the highest bidder.”
Jeff Smith, First Bank of Idaho vice president of commercial lending, declined to discuss the loan, but said First Bank had been excited to be part of a project that was going to provide 12 community housing units in the Wood River Valley.
When the projects were completed in April 2007, stakeholders rallied at an afternoon barbecue at Agave Place.
“I’m thrilled there are 12,” said Susan Passovoy, a member of the Housing Authority. “I wish there were 1,200.”
Now, with seven fewer deed-restricted units, but five with lower prices, Fackrell sees the cup half full.
“We still have some deed-restricted units there at a price that better matches the needs of our applicants,” he said.
Attempts to sell the newly priced deed-restricted units have not yet begun, so Fackrell was not able to say whether the new pricing structure will work.
“We’re still finalizing the notice of intent to sell and the pricing agreement,” he said. “At the same time over the past year the credit markets and lending standards have continued to tighten. So we’re in a very difficult environment. With that said, these prices are certainly more favorable than where they were previously.”

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