Deed Restrictions as Affordability Tools

Vacation Town Residents Get Paid to Live in Their Homes

Park City, Utah is a tourist mecca. It’s known for the Sundance Resort, with its famous Sundance Film Festival. Need we say it’s a town full of vacation rentals?

Two-thirds of Park City’s homes have no one living in them. The supply of homes for sale is extremely low, and the town’s workforce can hardly buy into the market. But this town has discovered a way to turn empty vacation homes into full houses. It’s called Live Park City.

Currently in testing mode, Live Park City is funded by $1 million. With that money, the Park City Municipal Corporation pays deed holders to put restrictions on their deeds.

Park City is spreading the word, encouraging current or hopeful full-time residents to participate. City managers recently announced that they have $600K still left to distribute.

Accept a “Park City Lite Deed Restriction,” Get Your Down Payment Covered.

This initiative helps working residents live in the town. And for new buyers, this is an opportunity to have the local government cover the down payment and live in a desirable town where investor-owners have long hoarded supply.

Typical payments are between 10% and 20% of the home’s appraised value — an amount that most any buyer would be delighted to have ready for a down payment.

The buyer, by signing the deed restriction, keeps the home out of the investor pool for good.

And it’s OK for investors to apply. There are no income caps. So, the plan can bring in investors who will help ensure the property is rented out to Park City residents — not just film festival goers.

This could be a long-term game changer for Park City. And it isn’t a fleeting or novel idea. Paying cash to people who put deed restrictions on existing homes has already been spearheaded by other resort towns, including Breckenridge (Summit County), Colorado.

Then there’s Jackson, Wyoming, the hugely popular ski resort town. The Jackson / Teton County housing managers have established workforce deed restrictions to support local residents.

Too many investment and vacation properties languish in markets where people need homes to live in. In a housing affordability crisis, towns like these are forcing change.

How to Buy Into Live Park City? Fill in the Blanks.

As a deed holder or potential buyer, you can enter into a Notice of Deed Restriction Purchase agreement with Park City. Simply fill in the application form and submit it.

Be ready to state your name, location, phone number and email address, along with the details about the property you hope to add to the Live Park City plan. Fill in the form with details about the property:

Address and type of housing (detached, townhouse, duplex, condo, etc.) and intended use (rental or primary residence).

Property value.

Number of bedrooms, bathrooms, and parking spaces.

Area, in square feet.

Condo or homeowners’ association fees and assessments, if any; and any pending liens or rights of first refusal recorded on the property.

Condition of the property and repair needs.

If you have it, upload a recent title report. Be sure to complete all fields, then sign and submit the form.

Next Steps: What Happens After I Apply for the Funds?

The Park City Municipal Housing Team evaluates the home connected to each application received. Then the team sends its recommendation to an advisory committee, which vets the property and the applicant again. After these hurdles, the City Manager receives the application for final approval.

Then, the current deed holder or new buyer signs the Notice of Deed Restriction Purchase Agreement with the city. Of course, it’s the deed holder’s call whether to accept what the town offers. As an applicant, you’ll write in the minimum amount you’ll want to be paid for agreeing to record a deed restriction.

Once both sides have agreed and signed, the deed restriction is recorded. This happens immediately for a current deed holder. For a new buyer, the deed restriction is recorded with the closing documents.

Is This Worth Doing? A Deed Restriction, Once Recorded, Is Set in Stone.

The deed restriction won’t just bind yourself. It’ll run with the property. Future owners will be bound by your decision. In other words, your property will forever be the home of a full-time Park City resident (who lives in the home at least 10 months per year), or a long-term renter (no leases for less than six months allowed).

When you go to sell, you won’t be able to consider an offer from someone who wants to Airbnb the place. But there are important benefits in this arrangement:

A community strengthened by more long-term residents.

Property owners who support investments in workforce housing — not just vacation homes.

To the extent that Park City boosts housing stock for working residents, key members of the community will be able to live there.

Meanwhile, the property will be free to rise with the market — its value won’t be capped. The city will have the right to buy from participating deed holders (at fair market value) if they ever want to sell.

Sounds Like a Plan… But Does It Work?

OK, how is Park City’s plan to pay people to live in their homes going so far?

The Park City Council began testing the grant in 2022, with $1 million in funding. Nineteen people applied to bring their deeds into the plan. The advisory committee vetted the 19 applications, and approved four. When Park City made its funding offers, two of the approved deed holders agreed to have deed restrictions recorded on their properties.

The two successful applicants have received their funds as agreed. And here is what they did:

One successful applicant bought a Park City home, using the deed restriction cash for a down payment.

The other successful applicant is the current owner of a home in historic Old Town, and is spending the deed restriction cash on necessary repairs and upgrades.

Come on in, says Park City; the water’s fine. As of Spring 2024, housing managers still have $600,000 to pay out to successful applicants. Park City deed holders who don’t want their homes to become overnight rentals (or just sit empty as second homes) can step up now.

And if you’ve always wanted to move to the home of the Sundance Film Festival… Well, this just might be your cue.

Please note: Deeds.com is not a financial or legal adviser. Nothing in this article constitutes case-specific advice. Please speak with a real estate attorney and a financial adviser with any questions about your own situation.

Supporting References

Park City, Utah, via ParkCity.org: About Live Park City.

Park City, Utah, via ParkCity.org: Live Park City – Lite Deed Restriction Program; A Guide for Residents.

Leslie Thatcher for KPCW (National Public Radio serving Park City, Utah), via KRCW.org: Park City Lite Deed Program Pays Homeowners to Restrict Short-Term Rentals (Apr. 3, 2024).

Deeds.com: Creating Affordability: Deed-Restricted Workforce Housing (Jun. 25, 2021).

And as linked.