NEWS

Affordable neighborhoods benefit Summit County community

Date: Feb. 2nd, 2009
Contact: Bob Berwyn Summit Daily

No evidence that homes priced for locals are a drag on property values.  Real estate experts say there is scant evidence that Summit County’s affordable-housing developments drag down property values in adjacent neighborhoods.

The Ophir Mountain Town homes near the County Commons, for example, have had no negative impact to property values at nearby Bill’s Ranch, according to local appraiser Bob Ebert.

Similarly, the deed-restricted units built in the Wellington Neighborhood, at Vista Point and Gibson Heights near Breckenridge have not affected values at nearby high-end subdivisions, Ebert said.

Recent research indicates there is a shortage of several thousand units available at prices attainable for Summit County’s workers, and the gap between income and home prices continues to grow.

In response, county planners have started to identify parcels of land that could be suitable for affordable-housing developments.

Those preliminary plans have once again raised concerns among some property owners that existing home values could be dampened.

Arguments that affordable-housing neighborhoods do have negative impacts are mostly intuitive, and while they make sense at some level, there doesn’t seem to be any empirical evidence to back up the claims, experts said.

“The reality is, people like lower-density, higher-end neighborhoods,” said one Summit County real estate professional, who asked not to be named out of concern for his business.

Most real estate professionals agree that there is a qualitative aspect to the issue. Huge urban-housing complexes in cities, as were developed in past decades, have become blighted areas, and they have had negative impacts on nearby neighborhoods.

But for-sale homes, targeted to local workers, are a different matter entirely.

“Look at Mountainside,” the real estate professional said, referring to a neighborhood near an area where Frisco wants to develop an affordable locals’ neighborhood. “If you throw a couple of cracker boxes in there … it’s a bit of class warfare. If I make $100,000 a year, if my house is worth $600,000 (and) if we’re talking dishwashers, I hate the project. If we’re talking teachers, I don’t hate it as much.”

Wellington neighborhood a case study

In some cases, the “real neighborhood” feel of attainable housing actually may bolster nearby homes.

The Wellington neighborhood may be one of the best case studies for looking at the relative values of deed-restricted and market-rate dwellings. The neighborhood has about 160 to 170 homes, and 80 percent are deed-restricted.

Neighborhood developer David O’Neill said the market-rate units have consistently appreciated at 7.5 to 8 percent annually up through 2008.

“Over the years, our market units are going to appreciate significantly. People want real connections,” O’Neill said.

O’Neill said the most important thing is how affordable neighborhoods are conceived and executed. In a best-case scenario, the effect on nearby homes can even be positive, he said.

Aspen Mayor Mick Ireland, a longtime affordable-housing advocate, agrees. Pitkin County has a robust affordable-housing program, and no one has ever complained about lack of real estate appreciation in the Roaring Fork Valley.

“I’ve never seen anything that would show affordable homes having a negative impact on property values,” Ireland said. “There’s just no basis for it.”

In some cases, Ireland said he’s heard of people coming to Aspen and asking about buying in an affordable-housing area — without knowing that’s what they’re looking at.

“It can make areas safer, with less crime, because it populates a neighborhood,” he said, alluding to the ghost-town vibe of many second-home neighborhoods.

That fits in with O’Neill’s model for affordable housing, which is based on the character of the neighborhood.

“That’s what we start with,” O’Neill said. “Our point of departure is to preserve community character. Typically, people start with the affordable part, and you end up with beds and parking spaces. Then you’re going to have a different impact on your neighbors. You can’t just crank the density.”

Along with the design, the subsequent management of the neighborhood is also important, he said. That requires a governing mechanism, in the form of a homeowners association, that maintains the homes and the common areas in a desirable condition.

“If I were an adjacent property owner next to land about to get an affordable-housing designation,” O’Neill said, “I’d be asking about the quality and character, not simply whether it’s affordable.”