Protecting local housing for the long term
Big Sky Community Housing Trust unveiling new deed restriction program next week
Always a source for creative ideas, the Big Sky Community Housing Trust (BSCHT) is rolling out a new program called Good Deeds next week. The effort is loosely based on a successful program in Vail, Colo., which essentially protects a part of the local housing market through permanent deed restrictions by offering a cash incentive to locals.
Laura Seyfang, the executive director of the Big Sky Community Housing Trust, explained.
“It’s not a program for everyone, just like Rent Local, but it does fit for a number of people who recognize that they want to keep a fabric of the community where people can actually live where they work.” THE GOOD
How did the Housing Trust come up with the idea?
“We’re always keeping an eye on what other mountain communities are doing and we caught wind of this Vail program called Vail InDeed, where they are purchasing opportunities for locals forever with their permanent deed restriction program,” said Seyfang.
One of the reasons why the BSCHT is excited about the opportunity is because it creates balance in the community where both local people can afford to live and vacation rentals are still possible.
When people come and buy a home from out of state, they typically put it on the short-term rental market. If we don’t protect some of those houses, there’s nowhere for locals to live, explained Seyfang.
The Housing Trust has also tried to figure out how to provide down payment assistance for people over the last couple of years. They’ve struggled to figure out how to financially make that work.
Now, by buying a home with a permanent deed restriction, the Housing Trust can simultaneously give people cash to use as a down payment for the home. Folks can of course use it in other things, but it’s the size of a down payment that prevents most people from purchasing a home, explained Seyfang.
HOW IT WORKS
The deed restriction would typically happen during a sale and is loosely based off the Vail InDeed program. Over the last few years, Vail signed up around 200 units and protected housing options for locals long term.
Folks who sign up for the Housing Trust’s Good Deeds program would receive compensation for 10-15% of the fair market value for permanently deed restricting their property.
One occupant must work a minimum of 30 hours a week in Big Sky. The key is the rental must be to a local person. No short-term rentals are allowed under 30 days. The goal is typically a six month rental minimum.
A review committee, which is currently meeting for the first time next week, will look over each property and consider whether it’s a viable unit for the program. They will determine how to score applicants, pick apart the program and move through some pilot cases.
What we learned from Vail about the deed restriction program was essentially how do you run this, the mechanics of the program, and what are the longterm benefits, explained Seyfang.
“What Vail found, and they are 15-20 years ahead of us on this curve, they found that no matter how many units they were building, they were losing units faster, at a faster rate. We said that’s exactly what’s happening here,” Seyfang said.
“They said you can build, and spend all this money building, and yet you’re [at a net loss] because you’re losing units so fast to the vacation market. That’s how they came up with this idea. They had to find a way to stop the exodus of the key units they were targeting.”
Vail, population 5,500, is dealing with many of the same challenges as Big Sky.
Martha Anderson, the Housing Coordinator for Vail, explained they struggle with understaffed businesses, 45-minute commutes from nearby towns, affordability, and workforce housing solutions. There is little incentive for folks to stick around these small mountain towns because stability is hard to find.
Anderson pointed out how incredibly difficult it is for people to put down roots if they meet someone. Splitting rent with three or four roommates may have worked in the past, but for those trying to start a family, it’s not really an option.
Unlike Vail, which funds the deed program through their city government, the Housing Trust will fund the project through Resort Tax and philanthropy.
“My boss recently went through a surgery, I think a shoulder surgery, and some of the folks that were [working] there in the operating room with him. Some of those people went through Vail InDeed to get units. It was an anesthesiologist and I think a nurse,” said Anderson.
“I think the main thing we have learned from this program is it’s been very helpful for people.”
The only negative feedback Anderson heard about the Vail InDeed program came from a skeptical realtor. She was concerned about how all these deed restrictions may impact the value of properties over time.
Vail is also launching a new initiative called the Local Homebuyers Assistance Program, dropping this week, to fight the cash buying environment. The housing department will buy properties with cash themselves, deed restrict the properties and then sell them. They are presenting to the city council this week, so the program is still in the works.
Official roll out of Good Deeds Program to the community on Monday, March 7, at an 11:30 a.m. luncheon at the Wilson Hotel.
The goal of the rollout is to engage the community and solicit questions that the Housing Trust may not have thought of and to let the community help shape the program as well.
RENT LOCAL UPDATE
The BSCHT currently has two Rent Local properties listed. “We seem to trickle in about one a week,” explained Seyfang.
Through the Rent Local program, the Housing Trust attracted 48 units and placed 99 workers in housing in six months. They’ve averaged eight units a month since offering an incentive.
“It’s attracting people, people are catching on to how it can benefit them. For the right properties, they can make the same money as they would on the vacation market and yet they’re helping the town. Word is getting out there, so we are excited by how many people we’ve been able to place.”
Prior to the incentive component, it took the Housing Trust 18 months to attract 14 units. Rent Local is clearly working.
To learn more about the Rent Local program or check out the two properties currently listed, head over to the Housing Trust’s website: www.bigskyhousingtrust.com/rent-local-program/