Wednesday, June 24, 2009

Housing group adjusts with market

Some buyers opt for market rates

Express Staff Writer

Back in October, Veronique Forgeat, a languages teacher at The Community School, moved into a home in the Scott Building in Ketchum. The North Valley is the location for much of the valley’s affordable housing stock. Photo by Willy Cook

Even though the Blaine County Housing Authority lost 160 qualified applicants to the recession, Ketchum Mayor Randy Hall says the organization's role in the community should not be underestimated.

"The housing authority plays a vital role in our community," said Hall, who owns one of the authority's deed-restricted units in Ketchum. "The people who live in these homes are essential to the fabric of our community."

Yet the decision to stay in the housing authority system or take advantage of a buyer's real estate market is largely a matter of resources. Stable employment can make the difference.

The housing authority has 10 deed-restricted units, ranging in price from $45,000 to $371,000, available in the Wood River Valley. Despite efforts by the authority's staff to get buyers into the units, only one is under contract.

The housing authority manages 61 affordable housing units in Ketchum, 11 in Sun Valley, 17 in Hailey and three in Blaine County. By encouraging jurisdictions in the county to place affordable housing requirements on developers and by placing deed restrictions on those properties to sell units under market rate, the housing authority facilitates home buying for those in the community who would otherwise not be able to afford it.

However, buyers of affordable housing do not see the same amount of appreciation on their investment that market-rate buyers are. Deed-restricted units can appreciate at a rate of no more than 4 percent per year.

Housing authority buyers have avoided some of the problems that face many market-rate home buyers who got over-extended before the economy crashed. Several have successfully modified their home loans, but none have faced foreclosure. All have built equity on their investment.

Housing Authority Executive Administrator Kathy Grotto accepts that falling real estate prices affect the viability of deed-restricted housing, but defends the ongoing work of the housing authority.

"People can't make a big appreciation on the value of an affordable home with us, but on the other hand some people who bought a few years ago at the market rate have taken big losses. Our buyers are never required to take a loss on the home they buy. That's an important factor in this day and age," Grotto said.


After updating its database of qualified applicants for affordable housing this month, the housing authority discovered that 160 potential buyers of affordable housing no longer want or need to be on the waiting list. Grotto said that despite the recent exodus from the housing authority database, she signed up 12 new applicants during a one-month period this spring.

"We are getting new applicants all the time," she said.

The housing authority has 10 available dwellings for sale, as both income-based, deed-restricted units and "workforce" housing units, which are sold based on the net worth of the applicant.

One housing authority unit, a studio condo in Elkhorn Village in Sun Valley, is available for only $45,000, though monthly homeowner association dues cost $300 per month. The yearly earnings for a single resident buyer for the studio cannot exceed $43,000 per year.

The priciest "affordable home" in the valley is in the Scott/Northwood Building on Saddle Road in Ketchum and goes for $317,000. The owner cannot make more than $108,926 per year.

That is an easy requirement to meet in any town, but someone with that kind of cash is likely shopping around for market-rate bargains that could eventually prove to be a good investment.

Ben Flandro came to Ketchum 10 years ago and worked his way up to a senior management position at Smith Optics in Ketchum.

After four years on the Housing Authority database, and passing on one unit at Agave Place north of Hailey, Flandro opted out of the system and bought a market rate condo in west Ketchum. He said his rising salary enabled him to buy at market rate.

"I bought before the official crash, but I still think it is a better way to go than affordable housing. In most cases real estate in this valley is going to appreciate rather than depreciate. I wanted a place to live, but I also wanted a home as an investment."

But not everyone can afford a west Ketchum condo. Two of Flandro's friends, a co-worker at Smith and a local school teacher, are still in the Housing Authority database and recently purchased units in the Scott/Northwood Building in Ketchum.

"They are really stoked to live in them," he said.

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