Housing Matters: It Might Be Time to Take Advantage of APCHA’s New Deed Restriction

When Aspen residents talk about “deed-restricted unit,” we know they mean public housing, and we usually assume they mean specifically APCHA units—those under the Aspen-Pitkin County Housing Authority.

While “deed restriction” is a commonly used and understood term in our community, there are different deed restrictions that can lead to some confusion. Currently, most units are subject to what we call the “current APCHA deed restriction,” but there are many cases where the specific deed restriction on the unit is older and different than the current one.

The more unique deed restrictions date back to the earlier days of APCHA in the 1980s and are usually influenced by the developer of the property and the era in which it was built. Some have different rules regarding work requirements, minimum occupancy, appreciation, compliance, and capital improvement limits. So, if you see a unit for sale and the process seems different than the perceived norm, it is likely subject to different deed restrictions than the current ones, which reflect the latest regulations.

All of the various limitations of the act were implemented earlier in the agency’s existence and were a result of the learning curve that came with pioneering one of the first affordable housing programs in North America. There were no comparable programs to model or learn from. We learned a lot along the way.

Currently, most units operate under the current deed restriction, which almost always applies to new units. The current deed restriction has been modified as we have better understood best practices over the years. The basics of the current deed restriction include unit appreciation, capital improvement limits, and the requirement to comply with APCHA regulations.

Here is an example of a unit with an older deed restriction that recently went up for sale: The deed restriction on this particular unit dates back to 1987. In the case of this particular deed restriction, there was no requirement for the seller to comply with APCHA seller standards. This means that all necessary repairs to this unit did not have to be made before the sale. If this unit were subject to the current APCHA deed restriction, the seller’s minimum standards would be enforced at the time of sale. The minimum standards are contained in the regulations and include requirements such as windows in good condition, light fixtures in working condition, and plumbing in good condition with no leaks.

Owners under the old deed restriction may elect to opt into the new deed restriction, and doing so has several benefits—depending on the specific deed restriction. First, having more units under the current deed restriction helps with program management and longevity. The APCHA Board and staff work hard to create APCHA regulations that support owners and the sustainability of the program. By having more units operating under the current regulations, we ensure that more units are following best practices and can continue to support our community and employees.

There are also benefits for unit owners who choose to sign a current deed restriction. One of the key benefits concerns capital improvement limits. For most APCHA units, owners are limited to adding 10% of the purchase price to the resale price via capital improvements. So, if you bought your APCHA home for $180,000, you could get back $18,000 worth of capital improvements at the time of resale.

When you sign a new deed restriction, there is the potential for a higher capital improvement limit. This is because when an owner signs a new deed restriction, the purchase price resets to the current maximum sale price of the unit. This is most likely a higher number due to appreciation in value over time. APCHA updates the maximum sale price of each unit each month and it is calculated as follows (unless otherwise specified in the deed restriction that applies to the unit):

• Seller’s purchase price.

• Plus 3% simple appreciation for each year of ownership or the Consumer Price Index between the date of purchase and the date of offer for sale, whichever is lower.

• Plus the cost of approved, permitted capital improvements, at present value, not to exceed 10% of the purchase price, less depreciation.

• Plus the present value cost of approved tax-exempt capital improvements required to meet health and safety standards.

Using this formula and ignoring capital improvements, let’s look at how your capital improvement limit might change by signing a new deed restriction. For this example, we’ll use a 2.5% increase in value and assume you purchased the APCHA unit for $180,000 in 1985.

Now let’s say it’s 2022 and your home’s maximum sale price is $350,000 and you decide to sign a new deed restriction. Once you go under the new deed restriction, your capital improvement limit is based on $350,000 instead of $180,000. With this change, your capital improvement limit is now $35,000. That’s a whole extra $17,000 you could make by making improvements to your APCHA subdivision!

With the new deed restrictions, not only is there a greater potential for capital improvement recovery, but the current deed restrictions add certain types of repairs to the list of qualifying capital improvements — such as flooring. So not only do you have a greater potential for capital improvement gains, but more repairs also qualify as capital improvements.

If you would like to compare your deed restriction to your current one or would like to update your deed restriction, please contact APCHA. Staff are always honest and straightforward about the differences between your deed restriction and your current one. For some, signing a new deed restriction may not make sense, especially for those in newly restricted deed units already operating under the current rules.

One thing to keep in mind if you decide to update your deed restriction is that you will need to work with the Recorder’s Office, which will incur a $93 fee. With all of these benefits, the $93 may be worth it. Contact APCHA at 970-429-2860 to ask questions about your deed restriction.

Other APCHA ads

• The next APCHA Board meeting will be October 2. At this meeting, the Board will discuss the 2026-2030 Strategic Plan. Join the meeting to learn about upcoming projects and initiatives APCHA will be working on in the coming years. Agendas and meeting links can be found on the APCHA website, apcha.org.

• APCHA recently added a step to the qualification process. Effective September 9, 2024, all applicants must complete and pay Form 4056-T for the most recently filed year of tax transcripts (personal and business, if applicable). If you have any questions about this change or the process, contact the APCHA office at 970-429-2860. The reason for this change is so APCHA can verify tax returns through a third party.

• On October 1, from 11:30 a.m. to 1 p.m. in the Council Chambers at City Hall (third floor at 427 Rio Grande Place), APCHA will host HOA attorney Molly Foley-Healy. This informational event, called “ABCs of Homeowners Associations,” will be great for those who serve on an HOA board or those who want to learn more about HOA governance.