Housing Restrictive Covenant/Deed Restrictions Discussion

The work session on May 27, 2025 is Town Council’s fifth work session regarding housing restrictive covenants/deed restrictions. The first work session was held on August 27, 2024, the second on September 16, 2024, the third work on December 10, 2024, and the fourth on January 14, 2025. Due to two Council members resigning between January and April 2025, the discussion of covenants was paused and then resumed on May 13, 2025 with the Summit Combined Housing Authority (SCHA), which presented on general housing restrictive covenants and best practices. The SCHA has experience with all covenants within the county since they administer portions of the covenants for all of the jurisdictions; the staff memo and presentation from SCHA were included as attachment 1. The overall goal of these work sessions has been to have the Council determine if they want to create a new standard housing restrictive covenant, and if so, what should be included in this new covenant.

What is a Restrictive Covenant/Deed Restriction?

A restrictive covenant/deed restriction is a common tool used for placing limitations on the uses of a housing unit and are frequently utilized when a housing unit has been partially (or fully) funded by public funds, and subsequently, deed restrictions are recorded on applicable properties. The covenant is a written agreement that restricts or limits the activities that may take place on a property or in a development. When purchasing a property that has a covenant recorded on it, new property owners acknowledge a written statement affirming that they understand the restriction recorded on the property and that they will abide by it.

There are approximately 155 properties within the Town that have restrictive covenants/deed restrictions on them through various development measures, primarily stemming from development agreements or bonus density commitments. Approximately 40 of these units are employee units with no resale price cap (often referred to as “light” or “live/work” restrictions). The remaining have some type of limitation on household income and/or resale calculation, typically tied to area median incomes (AMI) between 80-120% with some units have a higher AMI, up to 160% AMI.

New Covenant & Next Steps

During the May 27 work session, staff compared what is in the 2019 covenant to the feedback and best practices received from SCHA during the May 13 work session, as well as feedback received during previous Town Council discussion. Questions that Council worked through:

• New Covenant/Deed Restriction: Does Council want to pursue a new standard housing restrictive covenant?  Council voiced support for a new standard housing restrictive covenant/deed restriction.
• Resale Method: Does the Council want a lottery process, waitlist system, or to continue with the current method articulated in the 2019 covenant? Council agreed to pursue a lottery process.
  • If the Council wants to implement a lottery process, what should extra lottery entries be allowed for? Council agreed to provide one extra ticket for working in Summit County for 10+ years and one extra ticket for working for two years in the Ten Mile Basin, making it possible to get three tickets maximum.
• Resale Calculation and Capital Improvements: How should the resale calculation and capital improvements be calculated? The majority of council agreed to a 3% yearly increase that would not be not compounded, but Council wanted more financial modeling around any caps on qualifying capital improvements; to be presented at a later meeting.

To be considered for a future meeting

• Asset Testing: Does Council want asset testing required in the covenant? If yes, then to what maximum amount may a buyer have?
• Real Estate Commission: Does Council want to limit real estate commission within the covenant? If yes, then to what percentage?
• Income Buffer: Does the Council want to allow an income buffer within the covenant? If yes, then to what percentage?
• Right to Inspect: Does Council want a “right to inspect” clause implemented in the covenant?
• Employment Location Requirement: Does Council support requiring employment verification at annual monitoring and ensuring that the covenant continue to require a resident earns his or her living from a business operating in Summit County, by working at such business an average of at least 30 hours per week on an annual basis?
• Initial Purchase Price: Does Council want to modify the initial purchase price?
• Ownership of Other Property: Does Council want to continue to not allow ownership of other residential properties?
• Other: Does Council have concerns/revisions not discussed?

Staff will return with more data to inform the discussion regarding the cap on qualifying capital improvements, as well as continuing to discuss the questions that Council was not able to get to during the two hours set aside for this discussion on May 27.

Mountain Dreamers Update

Mountain Dreamers, an immigrant advocacy nonprofit based in Frisco, CO serving the central mountain region with grassroots advocacy and resources for immigrants and their families, presented an update to Town Council. Mountain Dreamers strives to create an inclusive mountain community that promotes equitable opportunities for immigrants from diverse backgrounds to be safe, celebrated, and thriving.

Mountain Dreamers provides both immigrant services and legal services such as migrant integration programs and shelters and assisting with Colorado driver’s licenses, ITINs and tax preparation, financial aid, and legal services. Mountain Dreamers has also created outdoor equity and inclusion initiatives to get more locals who are black, indigenous, and people of color into outdoor activities, such as skiing and snowboarding and accessing trails.

Drive-Through Signage

Historically, only one drive-through lane has been allowed for fast food businesses. Over the last few years, fast food establishments have created more efficient drive-through operations utilizing more than one order lane to mitigate traffic spilling into parking lots and onto public roads. This layout leads to less impact on the public roads and to reduced traffic back-ups, as more space is provided on the property for stacking cars, and customers are processed more efficiently through multiple drive-up windows.

The current Town Code only allows one drive-through menu board sign per business and one drive-through pre-sell menu board sign per business, which restricts the number of signs and then subsequently does not allow for multiple drive-through lanes.

During the May 27 meeting, the first reading of Ordinance 25-09, changing Chapter 180 of the Code of Ordinances, was presented to Town Council. The proposed changes include:

• Drive-Through Menu Board Sign- Changed from one drive-through menu board sign per business to one drive-through menu board per drive-through lane with a maximum of two signs allowed per property; and
• Drive-Through Pre-sell Menu Board Sign- Changed from one drive-through pre-sell menu board sign per business to one drive-through pre-sell menu board sign per drive through lane with a maximum of two signs allowed per property; and
• Master Sign Plan- Changed from requiring a Master Sign Plan for any development having more than one tenant, business, or use to only requiring a Master Sign Plan for properties, which contain three or more businesses.

Council gave direction to bring a discussion to a future Council meeting regarding prohibiting drive-throughs on Main Street. The majority of Council approved Ordinance 25-09 on the first reading. The second reading is scheduled for June 10, 2025.

Ordinance Approving an Amended Agreement for the 602 Galena Street Housing Project

The Town of Frisco has been working with the NHP Foundation (NHPF) since early 2023 when staff from NHPF approached Town staff and Council on affordable housing opportunities in Frisco. The mission of NHPF is to “preserve and create sustainable, service-enriched multifamily housing that is affordable to low- and moderate-income families and seniors, and beneficial to their communities.” This mission aligns with the Council’s strategic plan to support a thriving economy by increasing workforce housing and enhancing community inclusivity by offering a variety of housing types to support year-round residents.

The 602 Galena project has evolved partly due to the ongoing pursuit of the 101 West Main LIHTC housing project. Recognizing the significant need for all housing types and rental rates within Frisco, the Town has focused on ensuring that the two projects provide a range of affordable rental housing options to the community. The 602 Galena project is projected to move forward in 2025 with 54 rental units at an income rate of 120% of the Summit County area median income.

Following the adoption of a development agreement and ground lease between the Town of Frisco and NHPF Galena LLC, the Frisco Community Housing Development Authority (FCHDA) received a request from NHPF to amend the adopted Unconditional Guaranty during the April 22, 2025 FCHDA meeting. In addition to the unconditional guaranty amendment request, Town staff also brought forward an amendment to the adopted loan agreement for Town Council consideration.

Council approved an amended Ordinance 25-08 on the second reading to approve the loan and guaranty amendments.

Frisco Town Council Meetings: Ways to Participate

Frisco Town Council meetings are available to view via Zoom and YouTube, and are also held in person to make Town Council meetings easier to access for everyone.

The public can provide comment during meetings via Zoom or in person (not YouTube), and a public comment period will be available at 7:00pm; during the consideration of ordinances; and at the discretion of Town Council during work session items, which are discussions that don’t require a formal vote by Town Council and do not require public comment. Again, this hybrid approach is intended to make Town Council meetings more accessible, and meeting recordings will typically also be made available the day after a meeting in the meeting archive with agenda topics bookmarked to the discussions in the video.