A crackdown on "Affordable Housing" violaters

Breck affordable housing scofflaws cop plea deal

A deed-restricted home in the Wellington Neighborhood of Breckenridge, formerly owned by Indiana couple Kirk and Pam Alter, was at the center of a recent local prosecution for violations of the town's affordable housing covenants. The Alters pleaded no contest to the charges, and forfeited the profits made from the sale of the home, in addition to paying town attorney's fees.

Summit Daily/Brad Odekirk

BY HARRIET HAMILTON June 19, 2006 BRECKENRIDGE -

In a potentially precedent-setting case, Breckenridge municipal court Judge Buck Allen accepted a plea agreement from the Indiana couple charged with violating town affordable housing covenants two days before the case was set to go to trial.As required by the agreement, Kirk and Pam Alter pleaded "no contest" last week to the criminal charges and agreed to reimburse the town the profit they realized when they sold the property at 11 Rodeo Drive, in addition to $2,500 for town attorney fees. The terms of the agreement stipulate the money must be paid within 30 days and that final judgment in the case will be deferred for one year, on the condition that neither incurs other criminal charges during that period.Kirk Alter, a professor at Purdue University, and his wife Pam bought the deed-restricted single-family house in the Wellington Neighborhood in July 2004. The Alters paid $305,000 for the new two-story, three-bedroom, two-bath home. At the time, the couple signed an affidavit stating that one of them was employed within Summit County at least 30 hours a week.

During the 18 months the Alters owned the house, it appeared they only visited the neighborhood a few times, town prosecutor Seth Murphy said. Breckenridge filed criminal charges against both Kirk and Pam last fall after unsuccessfully trying to contact the couple. "Under the town code, it's a criminal violation," Murphy said. "Under the code they could have been assessed up to $100 a day (for every day they didn't live in the house)." Because both Kirk or Pam were charged individually, fine amounts against them could have amounted to more than $100,000.In response to the town action, the Alters hired an attorney and filed motions challenging the legality of the prosecution.

In January, with the case still pending, they sold the house to a local family for $379,000. After subtracting the cost of a two-car garage added while they owned the house and Realtor's fees, the Alters took home $13,021 in profit, which must now be returned to the town. The couple's attorney, Paul Dunkleman, blamed poor communication for the misunderstanding."They bought the property with the intention to live and work full-time in Breckenridge," Dunkleman said. "But personal and professional issues made that difficult. And communication (with the town) was a problem."Dunkleman went on to say that his clients never had any interest in violating town covenants."Regardless of how this may appear, they do feel strongly about employee housing," he said.

The Alter case marks the first time criminal charges have been brought in Summit County for an alleged violation of affordable housing covenants. Breckenridge's aggressive pursuit of the judgment stemmed from the town council's commitment to attainable housing, Mayor Ernie Blake said."You just can't have a house that you work so hard to put in place and have it not be utilized," Blake said. "It becomes a big deal." According to Blake, the decision to accept the Alters' plea was not taken lightly by the council."We didn't want to run the risk of not prevailing in a real way," Blake said, referring to the possibility of a potential jury acquittal.Sharyn Steiner, president of the Wellington Neighborhood homeowners' association, which represents nearly 120 households, expressed her satisfaction with the outcome. Enforcement of the affidavit system is vital to maintain the area's character, she said."Otherwise it'll turn into every other neighborhood," she added. "What I love about living here is that it's very much like old-town Breckenridge, before the town got so big."

Affordable housing enforcement in the High Country

In contrast to the 350 or so deed-restricted units monitored by the Summit Housing Authority, Aspen's affordable housing agency is responsible for more than 2,500 units. The Aspen/Pitkin County Housing Authority employs a full-time person to monitor compliance and qualification, executive director Tom McCabe said."We have a scarce commodity and people are desperate to get into affordable housing here," he said. "And they act in a desperate way."McCabe said attorneys working for the Housing Authority have at least one or two civil actions against violators going at all times. Violators are often forced to sell, but his office has yet to file any criminal charges like those filed against the Alters."We always manage to work it out one way or the other," he said. McCabe went on to say every case gives his agency more information about how to prevent non-residents from taking advantage of the affordable housing system.

Improved computer technology has allowed the Aspen-area housing authority to be much more thorough when vetting potential buyers, he added."It's becoming more and more difficult to scam us," he said.Eagle County director of housing K.T. Gazunis admits that intentional violations of affordable housing deed restrictions are also a problem for her office, but that formal legal action has not yet been required to deal with those taking advantage of the system."So far, we've not had to take anyone to court," she said. "Strongly worded letters from attorneys have been enough." Gazunis' office also has a full-time employee responsible for compliance enforcement. In addition to sending out and checking annual affidavits, the agency also randomly audits 25 percent of its units, using methods such as calling employers.Judge Allen, who serves as municipal court judge in Vail as well as Breckenridge, said the Alter case may have an impact on other towns' approach to deed restriction violators."The town attorney over in Vail is going to be looking at what has happened here," Allen said.The affordable housing crunch is not unique to the Colorado mountains. Wealthy baby boomers are affecting housing in many markets. McCabe said his Aspen office receives inquiries about how to deal with violators from as far away as Florida and Hawaii."All over the country, when you have an attractive community, the second-homeowner market is starting to crowd out the workforce," he added.