Denver ‘can’t guarantee’ what will happen to homeowners in affordable housing mixup

The program announced Friday will give homeowners until the end of 2018 to follow the program’s rules or sell their house.

Author: Anna Staver

Published: 2:15 PM MDT March 30, 2018
Updated: 9:12 PM MDT March 30, 2018

Denver is giving 306 homeowners who bought income restricted homes six months to follow its rules or sell their houses.

It’s a “broad and strategic approach” to a problem that’s “been at the forefront of our minds for quite some time,” Office of Economic Development spokesman Derek Woodbury said.
That problem is dozens — and potentially hundreds — of these homes were sold to people who say they had no idea they were buying an income restricted property.

9NEWS has spoken to more than two dozen homeowners in this specific situation.

For those folks, a certified letter that the city mailed Friday will explain to them that they have two ways to “cure” their violation. They can prove to the city that can meet the income restrictions or they can sell their house to a buyer that meets those guidelines.

“My advice is speak to attorney before you execute this agreement,” said Rob McGough, an attorney representing some of the homeowners in Green Valley Ranch. “I’m advising my clients not to enter into it.”

He thinks signing the letter could make it harder for people to sue the city if they don’t want to sell.
You’re essentially admitting to not compliance … ,” McGough said. “Then, by executing this agreement and participating in the program you’re essentially giving the city permission to force you to sell your home.”
Click Here to see a copy of the letter if it does not appear within the article.

And not for any price you want either.

Denver’s affordable housing rules set the sales prices for all the homes in the program. That price could be less than someone paid for the house — especially if they bought the property in the last year or two.

“These houses are part of our affordable housing stock,” city attorney Kristin Bronson said. “If you have someone who just wants to take it out of the affordable housing stock, it’s not really their decision. These are homes that were sold as affordable homes. They are part of the city’s affordable housing stock, which is very important to us. And we want to preserve those units as affordable.”

Who would pay the difference between the market price and the one dictated by the affordable housing program?
Bronson didn’t say it directly, but she repeatedly laid the blame for this situation at the feet of the title companies involved in these transactions.

“If the market is working the way it should be, this wouldn’t happen,” Bronson said.
Mayor Michael Hancock is calling on the Colorado Real Estate Commission, Department of Insurance and Land Title Association to review their practices to address “the industry-wide failures that currently exist in tracking affordable housing units.”

As for the people who want to stay in their homes without joining the program, Woodbury said he “can’t make any guarantees.”

9NEWS knows of at least two homeowners who are thinking about suing the city if OED tells them to sell.

Peter is a Real Estate Broker at Professional Brokers Group (License No. 023000), covering the greater Short Sale area of Colorado.
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