Understanding Deed Restricted Housing

The Deed Restricted home is a benefit for local workers in a particular community and was developed to provide affordable housing for sale or rent in markets that are typically more expensive such as resort communities. Such properties are then typically occupied, if not also owned outright, by local workers eligible to receive this benefit. Local workers means all who earn their living as employees, contract labor, or self-employed business owners.

How Deed Restrictions Work to Benefit the Locals in Telluride and Mountain Village and the Surrounding Area

Since not all Deed Restriction programs have the same requirements, ask San Miguel Regional Housing Authority staff about a particular property or area in which you are interested (see contact information below). But our area’s Deed Restriction programs can generally be described as follows:

Owner-Occupied Deed Restrictions

To receive the benefit of buying a home at a “below market rate,” an applicant must be a local worker that meets certain other eligibility requirements and must occupy the home. Some jurisdictions also require the applicant to have been a resident within certain boundaries: Mountain Village requires residency within its Town boundaries, and San Miguel County requires residency within a four county region. When the Deed Restricted home owner wants to sell their property, they are required to sell it to another qualified applicant under the sale procedures in the Deed Restriction.

Owner-Occupied Deed Restrictions sometimes limit the amount of appreciation of the price at resale. In the Mountain Village program, the appreciation realized is capped at 4% a certain percentage per year above the price paid, most commonly 4%. In the Telluride program, appreciation is capped at the lesser of a Consumer Price Index multiplier or 3% per year. This helps keep the home affordable for the next buyer but allows the owner the chance to acquire some monetary value in the home beyond the benefit of the equity built up. San Miguel County Owner-Occupied Deed Restrictions in unincorporated areas of the Telluride region do not usually cap appreciation, but some do. The Owner-Occupied Deed Restricted program is a way to provide local workers a decent place to live in a home you can call your own.

Deed Restrictions That Also Allow Renting

Other Deed Restriction programs restrict occupancy only, and contain specific procedures for renting. Typically these Deed Restrictions do not limit the amount of appreciation of the price at resale. These units may be owned by anyone including local workers, but must be occupied by local workers that meet certain eligibility requirements. Those requirements vary considerably by location, but are usually less restrictive than requirements to purchase the owner-occupied units. Most Deed Restrictions allowing rental are found in the Town of Mountain Village, though some are available in the Town of Telluride and a handful can be found in the County program.

How to Qualify to Own and/or Occupy Deed Restricted Affordable Housing

Contact San Miguel Regional Housing Authority (SMRHA) at 970-728-3034 or via our web site at www.smrha.org for assistance or an application to qualify as eligible to own and/or occupy. You may view a summary of Deed Restriction program qualifications at www.smrha.org (Programs). The program qualifications summary currently includes requirements for the Deed Restriction programs of the Town of Telluride and San Miguel County; the Town of Mountain Village programs will be added in 2007.

Buyers, sellers, and their realtors, may help themselves to free classified ads at www.smrha.org (Housing), look for tips in a process guide for deed-restricted property transactions and view a deed-restricted property inventory at www.smrha.org (Programs).