Realtor Damon Knop has participated in over 400 affordable homes sale transactions as the buyer’s or seller’s agent in Stapleton, including multiple transactions on some homes over the years. With a total of 488 Stapleton homes currently listed in Denver’s affordable homes program, Knop knows many of those homes and the people in them personally. Once the city checks out their list of 53 addresses in Stapleton that have been flagged with potential problems, Knop believes they will find only about 3 percent actually have compliance issues.
“Issues in Denver’s affordable housing—and just the discussion of this issue—puts in question the public’s attitude toward this kind of housing. So it’s an area that can have direct or indirect impact on future development,” says Jim Wagenlander, who along with Knop, serves on a committee that, for years, has been pushing for more affordable housing in Stapleton. When news reports of the issues surfaced, Knop felt it important for the community to know that some areas of the program, like Lowry and Stapleton, have fewer compliance issues than others, like Green Valley Ranch, for example, which has 416 affordable homes and 174 on the city’s list with possible violations.
Rick Padilla, director of housing and neighborhood development, acknowledges that their list just shows “possible” compliance issues, not actual issues. They have sent a letter to those with possible problems offering a six-month “time out”—the city won’t issue official violation letters during that time to owners who will meet with them. Their goal is to clear their records if there is no problem and resolve any issues so all homeowners will be in compliance.
If an owner who is currently renting out their home says they’ll move back, the city says the owner could keep the home but they must provide evidence that proves they reside there.
When owners buy into the program, they must: meet the income qualification limits; contact the city when they sell to get the allowable price; sell to an income-qualified buyer; and agree not to rent their unit. If owners don’t contact the city when they sell, they are in violation of the covenant and would be subject to the city’s hearing process, and required affordability documents might not be included in the property closing. They may also be subject to a lawsuit by the buyer. Padilla says their list shows 30 homes in Stapleton with this as a possible violation.
Knop says to his knowledge (and he follows sales closely) not one Stapleton home in the affordable program has been improperly sold without the affordability covenant. When he sees a possible affordable home being sold for a much higher price than the program would allow, he checks out the home’s history. A few over the years have fallen into foreclosure—and when the bank repossesses them, they are resold at market rate and are no longer in the program.
Knop explains that the Stapleton program predated Denver’s affordable housing program, and the sales transactions are set up in a way that the affordable covenant is attached to the title so it will come up in a title search just as a mechanics lien or a mortgage would. He believes other programs around the city may not have set up their programs in a way that would assure conveyance of the affordability covenant the way it’s done in Stapleton.
Lowry’s program is unique in that it is set up as a land trust so the trust owns the property in perpetuity. Owners are income-qualified directly through the trust (not the city) and can only sell through the trust’s real estate agent.
Padilla’s list of possible violations in Stapleton also includes 19 homes where owners have mailing addresses different than the address of the home, which points to a possible renting situation. Knop has heard the human side—owners who have faced difficult life situations and renting seemed the only way out for them—and also the unfortunate impact on renters who didn’t know they were renting illegally. Nevertheless, he says, “I think if anything it (checking on possible violations) will create a sort of clean slate as they work through these and people acknowledge they need to sell and stop renting.”
Four homes on Padilla’s Stapleton list are possible non-compliant transfers, where the property got deeded to a trust, LLC or to a person through a quitclaim deed.
Knop expressed concern that the city’s housing program has been short staffed in the past, and he is concerned that compliance efforts are slowing down the intake process for new applicants and owners now trying to re-sell their home. Padilla says he now has seven staff so the compliance process will not slow the new income qualification or resale process by existing owners. It currently takes 10 days for applicants who have all their paperwork in order from the start, says Padilla, though he acknowledges that the majority do not achieve that.
On the consumer side, however, Knop says it does seem the process of qualifying or reselling has slowed down since these compliance efforts got underway, which is particularly unfortunate at a time when new affordable homes are being built and added to the program.
So proud of the Housing Diversity CAB sub-committee for their dedication, perseverance, and hard work to bring more affordable housing to 80238, led by Damon Knop!