STORY BY DANIEL HANSEN

PHOTO BY KAREN BOSSICK

The City of Ketchum, with administrative support from Blaine County Housing Authority, is launching a new initiative entitled the Ownership and Preservation Program to help preserve local ownership and occupancy of residences in the city.

As part of the program, the city will provide cash incentives (up to 15-30% of a home’s value) to current qualified Ketchum homeowners, or those purchasing a home in Ketchum, in exchange for recording a deed restriction on the property.

A deed restriction is an agreement that restricts property use in some way. For this program, the deed restriction means the residence can only be occupied by qualified local owners — those living and working full-time in Blaine County or who meet qualifying exceptions. The program begins this week.

The Ownership and Preservation Program aims to help make Ketchum homeownership possible for more people who work and live in the community, as well as help existing homeowners remain in their homes. It was inspired by similar locals-only deed restriction purchase programs used in mountain resort communities, such as Vail InDEED, Live Park City, and the Jackson/Teton County Preservation Program.

With 60% of Ketchum’s housing stock technically “vacant” and primarily being used as vacation homes or short-term rentals, participation also helps ensure that more property is preserved to house local residents, now and in the future. The program is funded through the 0.5% for housing Local Option Tax (LOT) revenues, which was approved by Ketchum voters in May 2023. A million dollars has been designated for use in the pilot program over the next two years.

“While Category Local households earn too much for other programs, they struggle to attain ownership and housing stability through market-rate housing,” said housing director Carissa Connelly. “This program is a proven tool that supports higher income levels, above 140% area median income, and complements the other programs and efforts in the Housing Action Plan.”

Program participants can choose one of two deed restriction options: (1) a light Category Local deed restriction or (2) an appreciation-capped Category Local deed restriction.

For the first option, a light deed restriction, participants receive 15% of a home’s value, up to $125,000. Appreciation earned on a light-restricted property will not be limited, and the housing unit may be sold in the future, at any price that another qualified household is willing to offer.

The second option, an appreciation-capped restriction, pays participants 30% of a home’s value, up to $225,000. However, the property’s appreciation is restricted to an amount equal to the original value of the property when it entered the program (minus the city’s contribution for the restriction), plus cost-of-living increases during the participant’s ownership (not to exceed 3% annually) and non-luxury improvements.

A property’s value is determined by appraisal or sale price. The lesser of the two values is used for newly purchased and appraised properties. For existing homeowners, the city will order an appraisal of the property. Participants in the program may use the funds they receive for any purpose, including but not limited to down payment and closing costs on the property.

To participate, the property and homeowner must meet certain eligibility requirements. Participants must own or purchase a home within the Ketchum city limits. The property must be a single-family house, condominium, or townhome that is not already deed-restricted or otherwise restricted for local occupancy or affordability. At least one non-dependent member of the household must be a qualified local, based upon Blaine County Housing Authority guidelines (working a minimum of 1,500 hours a year in Blaine County for one or more employers physically operating in the county).

Current or potential Ketchum homeowners may also qualify if they are retired Blaine County residents over the age of 65 who formerly worked full time in the county, have a disability, are a schoolteacher in Blaine County, actively serve in the military, or are self-employed and have a business that serves clients and customers in Blaine County.

There are no household income limits to qualify, but the net worth of those in the household (assets less debts and liabilities) must not exceed $470,000, or $940,000 if the household includes persons 65 and above. No member of the household may own other developed residential real estate while participating in the program. A household may apply for the program if a household member owns another residential property, but the property must be disposed of prior to program participation.

Once a property is accepted in the program, no portion of the home may be used as a short-term or vacation rental and owners must occupy the unit full-time. An enrolled property’s deed restriction will last 70 years unless the unit is sold or transferred earlier. A deed-restricted property must be sold to another qualified household, and a new deed restriction and 70-year term will be recorded at closing. Deed-restricted property owners will be required to submit an annual compliance review to Blaine County Housing Authority.

Due to limited program funds, properties used to rent to qualified locals are not eligible to participate in the program at this time. Expansion of the program to allow for rentals and investment properties may be considered in the future.

Learn more about the program or apply to participate at projectketchum.org/housing-matters or contact Ketchum’s Housing Department at housing@ketchumidaho.org or (208) 727-5080. The city suggests that all interested applicants consult with their financial or legal advisor about any tax or financial implications of participation in the Ownership and Preservation Program.