KUSA — After our series of stories exposed the fact that City of Denver believes as many as 300 homes in its affordable housing program belong to buyers who don’t qualify to own them, many of you had questions.
Some of the homeowners have been told they can expect to be ordered by the city to sell their homes to lower-income buyers who do qualify for the program.
We are still waiting on answers from the city about whether they will force the sale of homes that belong to people who didn’t know they were buying into this program.
Mike asked us: “Why isn’t the state or the current home owners going after the home owner that originally sold the houses above the housing cap? These are the people that made money, that they shouldn’t have on the house.”
Well, Mike… the previous homeowners do share some responsibility. Sellers are supposed to disclose what they know about their home when they listed for sale.
However, in a lot of these cases, the previous homeowner didn’t sell the home for more than the city’s maximum allowed price— which means they didn’t make extra money as a result of the sale.
The market value of most of the homes in Green Valley Ranch didn’t start to exceed the maximum allowable price set by the city until after 2014.
She bought her home in 2014 for tens of thousands of dollars below the cap set by the affordable housing program. But today, the market value of her home is about $30,000 more than the maximum price the city would allow her to sell for today.
Brad also asked a good question: “Has anyone asked the question how many of these homes went into foreclosure in 2007-09?”
In the affordable housing neighborhoods built in Green Valley Ranch, we’ve noticed that about a third of the homes have gone through foreclosure at some point since they were built.
That’s an important detail, because the city law says a foreclosure on a home releases it from the restrictions of the affordable housing program. The idea is to ensure that the home becomes available to more perspective buyers, so that it doesn’t sit vacant in the neighborhood.
Despite that, we did hear from the owners of homes that have previously gone through foreclosure, who still received a notice from the city in January of this year telling them that they are part of the affordable housing program.
One of those homeowners sent us an email conversation that she had with city officials, in which she was released from the terms of the program.
This drives home two important points.
First, that the city’s monitoring of this program was so lax that they didn’t know some of these homes went through foreclosure in the first place.
And second, that the city does have the power to release people from the terms of the program. It’s relatively easy when I homeowner can prove their property has gone through for closure before.
What the city hasn’t yet committed to do… Is release homeowners who accidentally ended up in these homes through no fault of their own, rather than force them to sell at prices below market value.
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