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How Does A Deed Restriction Work? Might It Work In An Idaho City?

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Jessi Whitney
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CC 2.0 Jessi Whitney
An official from Vail, Colorado briefed the Ketchum City Council on Vail's so-called InDEED program.

A number of Idaho communities – particularly the resort communities of Ketchum and McCall – are struggling to find innovative and sustainable solutions to what has become a huge challenge: little-to-no inventory of affordable housing.

Another resort community, Vail, Colorado, experienced the exact same problem.

“We were slowly losing our community because of the loss of homes for year-round local residents,” said Town of Vail Housing Director George Ruther.

In fact, the Ketchum City Council recently reached out to Ruther to see if a unique program, dubbed Vail InDEED, might be a fit in the Wood River Valley.

Ruther visited with Morning Edition host George Prentice to explain how InDEED works, how Vail measures success, and if indeed it might work in Idaho.

“We were hopeful at the outset that it would be home buyers. They would use some, or all of these funds that they received from the town, as a form of down payment assistance.”
George Ruther

Read the full transcription below:
GEORGE PRENTICE: It is Morning Edition on Boise State Public Radio News. Good morning. I'm George Prentice. Housing…affordable housing… available housing… or the lack thereof continues to be a dominant theme in communities across the region. The communities of Ketchum and McCall and many others are looking for something… anything, that's innovative and sustainable. George Ruther is here. Mr. Ruther is Housing Director of the community of Vail, Colorado, where they have a unique program called VailInDEED… accent on “deed.” Mr. Ruther,good morning.

GEORGE RUTHER: Good morning. How are you?

PRENTICE: I'm very well, sir. Thanks for giving us some time. Up top: Can you explain to a layperson what InDEED means?

RUTHER: Sure. The Vail InDEED program is all about protecting and preserving existing homes that we have built here in the town of Vail for year-round local residents.

PRENTICE: So, I'm going to assume that you experienced what a number of communities here are experiencing, and that is a shift of housing away from local year-round residents. Can I assume that triggered the InDEED program?

RUTHER: That is absolutely correct. In the town of Vail, we talk about our community’s vision which is to be the premier international mountain resort community. And we say “resort community.” We need “mountain resort” as well as “community.” And what we we’re seeing here with housing in Vail was where we were a great resort, but we were slowly losing our community because of the loss of homes for year-round local residents.

PRENTICE: So, you are incentivizing potential home buyers and homeowners, to “restrict the deed” to keep it local?

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Charles Townsend Bessent
George Ruther, Town of Vail Housing Director

RUTHER: Correct. What the town of Vail does with the Vail InDEED program is we purchase a deed restriction on an existing home here in the town of Vail. That deed restriction purchase then limits the occupancy of that home, or the residence of that home, to a person who is living and working locally here in the town of Vail. When we make this purchase, it is a purchase in the interest in the real estate on the property. So, what we're buying is a deed that runs with the title to the property and lasts in perpetuity.

PRENTICE: Where do these funds come from,

RUTHER: These funds that the town's housing funds come from a number of sources. The two primary sources are housing mitigation funds that we receive here in the city from development application fees that we receive as an offset to mitigate development impacts, as well as the funds come from the towns, capital projects… funds here in the community.

PRENTICE: Have you been able to measure success yet?

RUTHER: This is a very unique and innovative program. It started here in the town of Vail back in late 2017, early 2018. Since that time, we have purchased approximately 162 deed restrictions on existing properties here in the community that have resulted in ensuring year-round housing for as many as 367 year-round Vail residents.

PRENTICE: Can you give us an example of an incentive? For instance, could this help… or actually become a down payment for a home?

RUTHER: Absolutely. And in fact, looking at this program from the outset, we had identified who we thought our target audience was going to be. And we were hopeful at the outset that it would be home buyers. They would use some, or all of these funds that they received from the town, as a form of down payment assistance. We also hope that that long-term investors, existing homeowners and business owners alike would participate in the program. After, now, three years of successfully implementing the program, we are seeing sellers of all types… like you said, homebuyers using it for down payment assistance, long term investors who have rental property keeping those properties in the rental market for local residents, (and_ homeowners who are already living in the town of Vail. And this allows them to continue to remain in the town of Vail, in spite of our ever increasing high costs of real estate, as well as business owners using these funds to help secure housing for their employee workforce.

PRENTICE: Well, the scenario that you just painted is exactly the scenario in Ketchum. And you recently spoke to the Ketchum City Council. What was your take on their reception to the program?

RUTHER: I was pleasantly surprised. I think, you know, that this whole InDEED program, as I was talking with the Ketchum City Council… it kind of took me back to when the town adopted this program. And I got a sense that, like in Vail, Colorado, and other places here in the Rocky Mountain West, in Ketchum, housing is becoming a crisis. And as such, the city council is most interested in taking some bold moves to begin to address that problem in a deed restriction purchase program similar to what we've put in place here in Vail. I hope it has a place in Ketchum, Idaho, as well as other communities across the West.

PRENTICE: Where's the rub on this? Where's the challenge in getting more people to buy-in, literally or figuratively?

RUTHER: You know, I can speak for Vail here most recently with this. And I think it's this uptick in real estate prices across the United States as well as here in the Rocky Mountain West. But as home prices continue to increase, it's just continuing to price our locals out of the market. The average home price here in the town of Vail now is in excess of $2.3 million dollars. So, when you're talking about a first time homebuyer purchase, even with a financial subsidy or assistance through the Vail InDEED program, it's just getting harder and harder for locals to afford the price of real estate in our communities.

PRENTICE: He is George Ruther, Housing Firector for the community of Vail, Colorado. Mr. Ruther, my sense is we're going to be hearing more about your program. And can I assume that the Ketchum City Council has asked for some more information?

RUTHER: They have. I reached out this morning; and I'm always happy to help share the information. And here in Vail, we're looking for the Vail InDEED 2.0 program. So, we're always happy to help with any questions that any folks would have.

PRENTICE: Well, I know you're a busy man. Thank you for giving us some time this morning.

RUTHER: You're welcome. Thank you for your time.

Find reporter George Prentice on Twitter @georgepren

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