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  • Dylan Anderson

Brown Ranch is talked about as affordable and attainable housing, but what does that mean?

The annexation agreement includes a section specifically focused on ensuring units will be affordable and attainable now and into the future.

The Gist: Housing is considered affordable when it costs 30% or less of household income. Units at Brown Ranch will be priced based on this metric.  

The Brown Ranch promises to be affordable and attainable housing for locals in and around Steamboat Springs now and into the future, but what does that mean?

The term affordable has become a somewhat catchall term for housing being developed locally, with private developers often presenting market-rate projects as affordable when looking for development approval from city officials.

The Yampa Valley Housing Authority defines affordable as paying roughly 30% of a person’s income toward housing, a standard used across the country. Affordability requirements for Brown Ranch are based on this standard, with the goal being that rents (including any HOA fees and utilities) or mortgage payments (including property tax, HOA fees, insurance and utilities) are in the 30% range for residents at Brown Ranch.

To accomplish this, housing at Brown Ranch is planned to be built at various Area Median Income levels, from 30% AMI to 250% AMI. This range includes incomes from $22,800 to nearly $190,000 a year for a single person, or from $29,250 to more than $270,000 a year for a family of four, based on data from the Colorado Housing and Finance Authority.

This broad swath of income levels hopes to help promote housing attainability, meaning there is housing available to people throughout the range of incomes. YVHA says this will eventually lead to improved housing mobility, which means people are able to move to the type of housing that best suits their financial situation.

The Brown Ranch Annexation Agreement includes two exhibits — one for rental units and one for sale units — that outline how affordability will be maintained.

For rental units, the exhibit is a use covenant, which will be placed on units as they are built at AMI levels agreed upon at the time of development. It says initial rental rates will be tied to the federal Department of Housing AMI rent level for Routt County and that rent increases would be limited to 50% the AMI increase for that year or 2%, whichever is higher.

For purchased units, the exhibit is a “Community Affordability Agreement,” which is essentially a deed restriction. This lays out how initial purchase prices will be set for homes and how resale values will be capped to maintain affordability. This agreement also restricts anyone who own a unit at Brown Ranch from owning any other residential property.

Both the use covenant and affordability agreement include a workforce restriction, requiring at least one member of a household living at Brown Ranch to work for an employer physically located in Routt County. Both documents also forbid short-term rentals of any kind at the Brown Ranch.

The annexation agreement includes an exception for some types of grants that may limit what restrictions can be put in place. For example, federal requirements tied to Low Income Housing Tax Credit built housing may not allow for the workforce requirement. Nearly $37 million in LIHTC grants have been used to build three YVHA properties serving low incomes down to 30% AMI, including Alpenglow, The Reserves and Anglers Four Hundred. YVHA says LIHTC may be used for as many as 20% of the units at Brown Ranch.


Why is Brown Ranch trying to serve such a broad range of incomes?

The idea is that Brown Ranch can meet the need for housing felt throughout the local economy, whether the worker is looking to pick up shifts in a restaurant or if they are a physician at the hospital.

The local Area Median Income is $75,900, which means of people who pay their income taxes in Routt County, 50% of people make more than that and 50% of people make less. (Median means middle, not average. The average income locally is lower than the median income.)

A 30% AMI worker equates to a single person making about $22,800 per year, which could be someone starting out as a seasonal lifty in town. To limit their housing costs to 30% of their income, this worker could pay about $570 per month for housing.

A 100% AMI worker equates to a single person making less than $75,900 and is a role such as a firefighter locally. At that level, 30% of income equates to about $1,800 a month in housing costs for a single person.

A 250% AMI worker equates to a single person making less than $189,750, an income level that is inclusive of incomes advertised on job postings for specialized positions at UCHealth Yampa Valley Medical Center. Limiting housing costs to 30% of their income would have them paying about $4,700 per month for housing for a single person.


Can remote workers live at Brown Ranch?

The annexation agreement exhibits contain local work requirements, meaning remote workers are generally not eligible to live at the Brown Ranch unless their employer is physically located in Routt County and doing business that serves Routt County.

From the Community Affordability Agreement: “For individuals claiming self-employment or work-from-home status, the employment must be for an average of at least 30 hours per week on an annual basis for a business that is located within and serves Routt County, and requires their physical presence within the boundaries of Routt County in order to complete the task or furnish the service, and such individuals must demonstrate they are earning at least minimum wage from this employment.”

LIHTC-built homes may not be subject to that provision. (More on this below)

What if you are retired or are planning to retire?

Retirees are eligible to live at the Brown Ranch provided they are retired from a business physically located within the county for at least five consecutive years. They also need to have worked an average of at least 30 hours per week annually at that business.

Those who are semi-retired are able to live at Brown Ranch as well. They need to have worked 30 hours per week annually at a business located in Routt County for seven consecutive years prior to partially retiring and work at least 15 hours per week annually at a Routt County business as their partial employment.  

What if you are disabled?

Both iterations of the workforce requirement include carveouts for people with disabilities that prevent them from working. To be eligible, the person needs to have worked an average of 30 hours a week for five years locally prior to becoming disabled. They would also be eligible if they were never able to work due to disability.

How will rental units be kept affordable?

All rental units at the Brown Ranch will be built to meet a particular income level, with rents set accordingly to that level, assuming that 30% of one’s income is going toward their housing.

For many of the rental units that will be built with federal or state housing dollars, there are already strict affordability requirements that need to be met. When YVHA closes deals with developers to build specific units, they will be subject to the use covenant that lays out how rents will be determined based on AMIs.

This kind of deal — called a development agreement — would be needed before the city would approve a development plan or final plat for that specific project, giving the city the option to weigh in on affordability through the typical development process for each project.

How will for-sale homes be kept affordable?

According to the annexation agreement, more than 960 of the homes built at Brown Ranch will be sold as opposed to rented. That mix includes about 450 condos, 266 single-family attached homes (townhomes or row housing) and about 245 stand-alone single-family homes.

For-sale units equate to about 43% of all the units planned at Brown Ranch.

To keep homes affordable, buyers will need to agree to a deed restriction that limits what the home could be resold for in the future. The resale price of a Brown Ranch unit is restricted in one of two ways.

Under the first scenario, the home’s value would increase by 2% each year, prorated monthly. This means if a home is $400,000 to start, after one year it could be sold for $408,000.

Under the second scenario, the home’s value would increase by a factor that is half that of area median income increases. This means if AMI increased by an average of 10% annually over five years, the resale price would increase by 5% annually. In this example, that same $400,000 home to start could be resold for $500,000 after five years.

The value of a Brown Ranch home can also increase because of homeowner improvements made, though these are capped at 1% of the original purchase price per year of ownership. So if a homeowner puts $40,000 worth of improvements into their $400,000 home in five years, the resale price of the home could increase by $20,000 if sold at the end of year five.


Will housing built with Low Income Housing Tax Credits (LIHTC) have the same restrictions?

Federal regulations may limit YVHA from imposing the same workforce requirements used throughout the Brown Ranch on units built with LIHTC funding. Three of YVHA’s current properties built with these types of tax credits do not have a workforce requirement.

These tax credits are used to build housing for people at the lowest income levels of between 30% and 80% of area median income.

While properties don’t have a local workforce requirement, YVHA Executive Director Jason Peasley said they don’t see remote workers moving into current LIHTC-built properties.

“We haven’t seen a ton of remote workers who make $30,000 a year moving to town,” Peasley said. “We have a ton of jobs in this town that don’t pay a ton, and those people need housing. … It’s practically serving the purpose of providing locals housing even though there isn’t a specific requirement.”

LIHTC-built units have another carveout in the annexation agreement, as these tax credits generally only require affordability for 40 years. The annexation agreement requires housing be maintained affordable in perpetuity but acknowledges that this may not be possible for some units due to requirements of LIHTC grants.

Peasley said the federal program is built to address this, and most LIHTC projects are recapitalized with more tax credits before that 40 years is up. This gives a developer a funding stream to make updates and improvements to a project while also adding to the time that it will be maintained as affordable to low incomes.

While there are quirks to working with LIHTC, Peasley often describes them as a “smoking deal.” For YVHA’s new Anglers Four Hundred property — which will finish leasing up this month — LIHTC provided more than $12.5 million.

“It’s a ton of money and it’s a resource that we need to help serve the lowest income households,” Peasley said.

Will there be any market-rate housing at Brown Ranch?

There are two areas of land at the Brown Ranch that the annexation agreement specifically exempts from the broader affordability requirements for the project, allowing YVHA to sell off the lots or to develop market-rate housing itself.

The first area is a roughly five-acre piece of land adjacent to the under-development Overlook Subdivision. There really is no access to this parcel from the Brown Ranch itself, as it sits high on a hill on the east side of the property. Access would likely need to be through the Overlook Subdivision.

The other area is a nearly 20-acre section in the southwest portion of the property. Units developed on this parcel — whether by YVHA or not — will be counted toward the 2,262 units planned at Brown Ranch, though they may be market rate, according to the annexation agreement.


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