LOVELAND, Colo. — Like many communities across Colorado, Loveland city officials are trying to increase affordable housing options.
"It's difficult to get into home ownership as the cost of for-sale homes keeps increasing," said Alison Hade, Community Partnership office manager for the City of Loveland.
The city works with various non-profits that offer low-interest mortgages to help create affordable homeownership.
"What we do in Loveland is, we waive fees on all of the homes in a subdivision, and the builder is able to take those waived fees for five [homes] and then apply that dollar for dollar for the affordable [option] which is then deed restricted," said Hade.
Currently, there are 34 deed-restricted houses and seven deed-restricted condos in the city's Enchantment Ridge subdivision.
The deed restricted homes sold at 70% of the area median income (AMI), according to the US Department of Housing and Urban Development, which would be $80,430 for a family of three.
Nearby, the Wilson Commons subdivision is under construction. In total, there will be 333 homes with about 67 being deed-restricted.
To qualify for a deed-restricted home in the Wilson Commons subdivision, families must make 80% AMI, which is about $91,920 for a family of three.
Those deed-restricted homes have specific conditions on how much profit the homeowner can make when selling, depending on how long they have owned it.
"If they stay in the home for 20 years, then they own all of the equity," said Hade. "If a family moves out prior to 20 years, they are currently required to sell the home to another family at the same income."
Over the years, questions have arisen.
"We have received phone calls from neighbors saying that a home was being rented and it is in the Affordable Housing Program," she said.
She added that when the city investigated these claims, in many cases, the properties were not part of the affordable housing program. However, city officials still wanted to address the issue.
"The problem with having a homeowner rent their home for profit is that they are actually whittling away the years on the deed restriction while they're making an additional income. And that's not the intent of the program," said Hade.
Recently, the city added to its code, which already bans renting deed-restricted homes. Now, if an owner rents it out, those years will be added back to that 20-year clock.
"We will add the remaining years of the deed restriction on the tail end," Hade said of the new penalty. "If somebody rents for, say, five years, and then we find out about it, we want to work with them so that a full 20 years of 'owner occupied' housing exists."
City officials said the ban on renting and the new penalty are aimed at protecting affordable homeownership for those who need it most.
"The intent truly was to add additional housing stock so that people with lower incomes could get the value, the benefit of owning a home over many years, and that dedication to the program hasn't changed at all," said Hade.
