Deed-Restricted Home Ownership

Deed-Restricted Home Ownership

Deed Restrictions Encourage Home Ownership and Provide Security

Deed restrictions are a useful mechanism to assist families in affording a home in areas with high market-rate housing, such as Steamboat Springs. These restrictions provide renters with an opportunity to become homeowners and offer the security of a permanent residence. The primary purpose of a deed restriction is to ensure that the property remains affordable both now and in the future.

The Yampa Valley Housing Authority (YVHA) is responsible for overseeing and managing many pre-existing deed restrictions from the City of Steamboat Springs. YVHA currently manages nearly 100 deed restrictions, including Fox Creek, West End Village, West End Village Townhomes, and a handful of others, which vary from property to property.

The newest program Home Base, launched by The City of Steamboat Springs, is a homeownership program designed to help local workers put down roots in Steamboat while preserving housing opportunities for the workforce that supports the community every day. Through the deed restriction purchase program, qualified local employees can receive financial assistance to purchase a home within city limits, creating a pathway to ownership without income restrictions. By investing in local homeownership, the program helps strengthen a vibrant, year-round community and ensures more homes remain available for future generations.

Please find deed restriction buying options at the links below:

YVHA Deed Restrictions White Paper

How Deed Restricted Housing Helps to House our Routt County Workforce and Local Retirees?

Updated December 18th 2024

Deed Restricted Homes Build Equity – Example

Let’s take an example of a local worker who buys a deed-restricted home at $400,000 and has a 2% a year appreciation cap. If the worker puts 5% down, which is $20,000, and finances the remaining $380,000, the worker can sell the home at these prices and build equity instead of renting.

  • After 1 year: $408,000, the equity increases from $20,000 to $33,119
  • After 2 years: $416,160, the equity increases from $20k to $46,687
  • After 3 years: $424,483, the equity increases from $20k to $60,723
  • After 4 years: $432,973, the equity increases from $20k to $75,247
Deed restricted homes build equity – example diagram

Click image to enlarge

Deed Restrictions

YVHA’s most recently built condo development called The Cottonwoods at Mid Valley, as well as any future for-sale homes developed and sold by YVHA, include a deed restriction to preserve affordability for all owners in perpetuity. Buying a deed-restricted unit is not the same as buying a market-rate unit. By requiring specific criteria for buyer qualification as well as the maximum resale price, affordability of the unit is maintained.

In 2023, YVHA updated its deed restrictions for future developments after almost two years of workshops, where YVHA staff and board members evaluated deed restrictions in other similar mountain communities. The deed restriction is catered specifically to benefit the local workforce and was carefully curated to avoid many of the shortcomings YVHA found in past deed restrictions in Steamboat Springs and other communities.

Highlights of the deed restriction include:

  • Income: Housing units will be sold to people who do not exceed the Area Median Income (AMI) range targeted for each development. View more information on AMI.
  • Local Employment: The property owner must work 30+ hours/week for a business physically located in Routt County or be retired from full-time employment in Routt County.
  • Sole Residency:
    • The deed restriction requires the owner to live in the unit as their sole residence.
    • No short-term rentals are allowed. Some long-term rentals of additional bedroom(s) in the deed-restricted unit are only permitted under certain circumstances outlined in the deed restriction, and the owner must continue to live in the unit.
  • YVHA deed-restricted homes will always stay deed-restricted: Once homes are deed-restricted at The Cottonwoods at Mid Valley the deed restrictions will not be lifted.
  • Long-Term Affordability:
    • When an owner sells their property, appreciation will be limited to a 2% increase in the purchase price per year or fifty percent (50%) of the average annual increase in AMI during the time that the owner has owned the unit, whichever is greater.
    • The cost of qualified capital improvements the owner has made to the unit can also be factored into the maximum resale price, per the YVHA Qualified Capital Improvements Rules.
    • The deed restriction formula strikes the balance between preserving affordability for future generations and protecting the community investment to develop housing, while generating equity and building wealth for homeowners and encouraging them to invest in the maintenance and improvement of their property.