Housing trust launches deed restriction program
By Bella Butler MANAGING EDITOR
BIG SKY – While national headlines point to low inventory as one of the major drivers of a widespread housing crisis, community leaders say that isn’t entirely the case for Big Sky. The units are there, it’s just a matter of who they’re available to. A new housing trust program aims to change that.
As homeowners in the area continue to transform local workforce housing into lucrative short-term rentals, the Big Sky Community Housing Trust will launch the Good Deeds program which will pay homeowners for permanent deed restrictions to curb the loss of inventory.
“We have sections or parts of the community that are more appropriate for the local workforce than they really are for vacation rentals,” said Laura Seyfang, executive director of the housing trust. “And we have many parts of the community that are way better suited to be vacation rentals and not places for workers. So, we really just need to kind of rebalance things.”
The Good Deeds program is modeled after the city of Vail’s InDeed program, which launched in 2017. Since then, Vail’s model has spent $11 million to purchase 162 deed restrictions and house 362 local workers.
The value of each deed restriction will depend on the property’s compatibility for local workforce housing, Seyfang said, pointing to factors like location and number of workers it can house. Since the housing markets in Vail and Big Sky are similar, she says deeds will likely cost around what they have in Vail—10-15 percent of the appraised home value.
Like real estate values, comparables will be a big part of how the deed restriction’s value is assessed, Seyfang said, but until the housing trust is able to further establish the program, it will look to Vail’s model to help determine starting value.
Between 2014 and 2017, short-term rental units in Big Sky jumped from 14 to 855, according to AirDNA data obtained by the housing trust. The housing trust launched a program last August to chip away at this challenge by offering cash incentives to landlords for renting to local workers long term. Since August, Rent Local has awarded funds to 48 properties, which are currently housing 99 local workers, according to Seyfang.
Good Deeds will complement the Rent Local program by giving participants an opportunity to test the waters with Rent Local then transition to a permanent deed restriction.
“Ultimately if a person is committed to this concept of creating workforce housing, we can just go for the long haul and get the permanent deed restriction,” she said.
The housing trust hopes the Good Deed program will also address locals’ inability to purchase homes in Big Sky. According to housing trust data, 95 percent of recent home sales have been to nonresident buyers. Seyfang says one of the challenges keeping locals from homeownership opportunities is the cost of a down payment on increasingly expensive homes.
In Big Sky, the median cost of a single-family home in 2021 was over $2.5 million, according to a PureWest Christie’s International Real Estate market report, and the median cost of a condo was $822,000.
“What we’re ideally looking to do is not only stop the exodus of units into the vacation market in our target areas, but we also have been struggling for a while to figure out how can we get down payment assistance money to local buyers in a market rate housing climate.” Seyfang said. “…One of the things we love about this new program is if it’s the buyer that agrees to the deed restriction, they will get the cash that can then be used as their down payment assistance, which is the number one thing that prevents local people from buying.”
A committee of housing trust board members and additional community members will evaluate each application for the Good Deeds program. Seyfang said housing trust general funds will kick off the program, which already has one applicant, but the organization will seek additional funding from sources including resort tax, individual donations and philanthropic gifts.
“It’s not the solution, it’s one of the solutions,” Seyfang said. “But we think it’s a really necessary part for protecting the exodus of units.”
EBS will continue to report on the developing Good Deed program as well as other housing challenges and solutions in the Big Sky community. To share your story, contact Managing Editor Bella Butler at firstname.lastname@example.org.