Housing Restrictive Covenants/Deed Restrictions 9th Discussion
The October 14, 2025 work session was Frisco Town Council’s ninth discussion on housing restrictive covenants/deed restrictions. The overall goal of these work sessions is for Town Council to determine if there is a need to create a new standard housing restrictive covenant, and if so, what should be included in this new covenant to best meet the needs of the whole community.
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.
Council Discussion and Direction
July 8 and August 19, Discussion Recap
During the July 8, 2025 Town Council meeting, Council decided to revisit all topics previously discussed due to Councilmember Zach Ryan purchasing a deed restricted property, which subsequently required his recusal from these discussions. On July 8 and August 19 Council provided the following direction:
- Asset Testing: Does Council want to require asset testing? A majority of Council agreed against asset testing, to encourage people to save and build wealth and felt that asset testing might discourage this. Council also felt that it would be difficult to enforce any rules around asset testing.
- Resale Method: Does the Council want a lottery process or waitlist system or to continue with the current method articulated in the 2019 covenant? Council stated again that they support moving forward with a lottery.
Council discussed providing mobility for current deed restricted owners who would like to purchase a larger deed restricted property or downsize to a smaller deed restricted property. Council discussed giving current deed restricted owners an additional ticket in the lottery to allow them an extra advantage.
- Council proposed the following for a lottery process:
- One additional ticket for working within Summit County for greater than 10 years, and
- One additional ticket for working in the Ten Mile Basin for more than two years, and
- One additional ticket for current owners of a deed restricted unit within the Town of Frisco.
- Resale Calculation How should the resale calculation be calculated? Council was split 2 to 2 on how the resale calculation should be calculated. A 2-2 vote negates any possible change to this topic. Council agreed that resale calculations should be discussed further in association with the capital improvements discussion.
- Capital Improvements: How should capital improvements be calculated? Council agreed to moving the depreciation schedule from five years to 10 years and keeping the 20-year depreciation schedule the same.
- Real Estate Commission: Does Council want to limit real estate commission within the Covenant? If yes, then to what percentage? Council supported moving forward with a maximum 2% real estate commission.
- Income Buffer: Does the Council want to allow an income buffer within the Covenant? If yes, then to what percentage? Council supported moving forward with no income buffer at initial sale but adding a 20% income buffer after 30 days. During the August 19 Town Council discussion, staff asked Town Council to reconsider the addition of a buffer after 30 days due to Council’s direction to move forward with a lottery, which is not compatible with the 30-day contingency. During the August 19 meeting, Council agreed to remove the 30-day contingency on the income buffer.
- Resale calculation and capital improvements: How should the resale calculation and capital improvements be calculated?
Council was divided 2-2 on the discussion of the resale calculation, and therefore, decided to take on this discussion of resale calculation first. Two Council members still voiced preference for homeowners reselling their property at 3% appreciation plus qualified capital improvements or the Summit Combine Housing Authority’s AMI maximum sale price, whichever is greater. Two Council members favor an annual 3%, not compounded, resale calculation. Council considered increasing resale percentage to 4% but still could not come to agreement with some on Council worrying about maximizing resale at the expense of affordability to the next buyer. Council gave staff direction to return with the data that illustrated the financial ramifications of increasing the resale calculation to 3.25%. 3.5%, 3.75%, or 4%.
Council agreed to discuss the cap on capital improvements during the next conversation about deed restrictions and expressed a willingness to look at expanding the cap on capital improvements beyond 10%.
- Ownership of other Properties: Council was asked to confirm if property ownership is permitted in a specified geographical area, such as outside of Summit County or in Summit County. Council agreed that a buyer could own one property outside of Colorado when purchasing a deed restricted home and that a current deed restricted homeowner should be able to own an unlimited amount of properties outside of Colorado to encourage investment for retirement.
- Employment Location Requirement: Does the Council support requiring employment verification at annual monitoring and ensuring that the covenant continue to require a resident earns their 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? The majority of Council agreed that you should be working for a business operating in Summit County and that this requirement should be enforced.
- Right to Inspect: Does the Council want a right to inspect clause implemented in the Covenant? Council agreed that there should be a right to inspect.
October 14, 2025 Council Direction
The four Councilmembers who are able to discuss this (not recused) are still equally divided on changes to the resale value calculation. Therefore, they have directed staff to draft two proposals that suggest changes to the standard deed restriction. The first proposal would include 3.5% appreciation and a 20% cap on improvements, in addition to the other possible changes to the standard deed restriction described above which had majority agreement. The second proposal would include the Peak One HOA board proposal of a 3% appreciation, plus qualified capital improvements, or the Summit County Housing Authority Maximum Resale AMI Price, whichever is greater, in addition to the other possible changes to the standard deed restriction described above which had majority agreement. These proposals would then be presented to solicit community and Council feedback with the intention of determining if staff should draft a resolution to change the standard deed restriction. Any new standard deed restriction would then be used for new deed restricted properties that would require this type of restriction or current owners with deed restrictions could opt in voluntarily.
Xcel Energy’s Thermal Energy Network Pilot Discussion
Representatives from Xcel Energy presented to Council about the thermal energy network pilot in Frisco, which is part of a larger “Mountain Energy Project” proposal to provide clean energy in Colorado, which includes exploring neighborhood-scale geothermal energy. Frisco was one of two communities in Colorado chosen for this project. The pilot focuses on developing strategies and community engagement for utility-scale thermal energy projects, aiming to reduce the reliance on the traditional natural gas system and lower greenhouse gas emissions, according to the Colorado Energy Office.
Xcel has indicated that this pilot will be completely funded by Xcel and not by Frisco property owners or Town government. This pilot program will sunset once Xcel has the information that will allow them to decide whether it will either be continued as a permanent utility or abandoned, but those details are not known yet as they will be determined as part of the project design through 2026. Xcel is still determining where the thermal energy infrastructure would go and how it would serve both anchor commercial and a limited number of residential customers. If Xcel decides to move forward after the pilot, possible construction would be in 2027 or 2028 after a vigorous public process, including approval through the Public Utilities Commission.
What is the Pilot Project and Why is it Important?
The Frisco pilot is specifically focused on the development of utility-scale geothermal thermal energy networks in the Main Street commercial core of Frisco, a system that uses the constant temperature of the earth for heating and cooling. The pilot is intended to provide clean heat alternatives for new construction and existing neighborhoods to reduce reliance on natural gas. This pilot program aligns with the Governor’s Heat Beneath Our Feet initiative to advance geothermal technology in Colorado and cut carbon emissions.
Council Discussion
Council wanted to understand how the funding would work, and Xcel explained that the project cost would be spread across all Colorado customers and would need to be approved by the Colorado Utilities Commission before the project could be constructed. Council also emphasized that they would like assurances that anyone who opts into a new HVAC system with a heat pump would be able to access the service providers who could troubleshoot issues, and the discussion included acknowledgment that more service providers and experts are needed for geothermal systems. Council also had Xcel address the ongoing upgrades to natural gas infrastructure in Summit County to prevent outages. Also, Xcel explained that the long-range plan for thermal energy is for it to become more affordable and attainable in the years to come with Xcel providing this more sustainable energy source to more Colorado customers.
2026 Grant Awards
On an annual basis, the Town of Frisco considers requests from 501c3 non-profits for in-kind services and micro grants up to $5,000 through the Summit County common grant application. This year, the Town received 65 applications for the micro grant and/or in-kind services request process. The 2026 request for cash funding totaled $194,800, and the request for in-kind donations totaled $43,654.
The Town also makes available the Frisco Community Impact Grant Program, which was first introduced in 2023. The purpose of this grant is to create a formal, annual process for evaluating investments in non-profit projects that support the Town’s goals within the budget cycle and that have an exceptional impact on the Frisco community, requiring a higher level of support. This year, the Town received seven applications for the Community Impact Grant program, with a total funding request of $326,000
A subcommittee of two Town Council Members and Town staff reviewed all nonprofit grant applications and presented their funding recommendations to Council during the September 23, 2025, work session. The staff memo gives a summary of the proposed recommendations from staff and the Council subcommittee which includes a cash funding amount of $89,700 for micro-grants, $43,654 for in-kind donations, and $80,000 for Frisco’s Community Impact Grant. Frisco’s support for non-profits is at nearly $1.3 million across all funding opportunities and grants.
Council Discussion & Direction
For 2026, Council approved the micro and Community Impact Grant recommendations.
2026 Budget & Mill Levy
Staff presented Ordinance 25-15, to adopt the 2026 proposed budget. This ordinance adopts expenditures totaling $53,952,465. Estimated revenues and reserves of $67,349,720 are adequate to meet those expenditures, leaving a total estimated ending fund balance of $31,027,608 at the end of 2026. Details of this ordinance by fund are available in the proposed 2026 budget.
As part of the regular budget process each year, staff is required to present Ordinance 25-14, which continues a mill levy in the amount of 0.798 based on the Town of Frisco property tax assessed in 2025, to be collected in 2026. FYI- the mill levy can only be increased through approval in a public election, and this ordinance did not impose or increase the mill levy. In Frisco, property tax collections are utilized for the purpose of defraying the expenses in the general fund, and Frisco property tax revenue is forecasted to result in revenues of $300,277 in 2026; most property tax revenue is received by and funds Summit County Government operations
Council approved Ordinances 25-14 and 25-15 on the first reading. The second readings will be held on October 28, 2025.
Lodging Tax Code Changes
Ordinance 25-18 outlines proposed changes to the Town of Frisco lodging tax sections of the municipal code to improve clarity, standardize definitions in the Town’s Sales Tax Code, and support consistent taxpayer compliance. Staff recommend the following amendments to the Lodging Tax Code:
- Remove the phrase “and otherwise taxed under Article I of this Chapter” from §160-30(B).
- Clarify the applicability of the lodging tax to all fees related to lodging services by referring consistently to “lodging services” rather than just “lodging.”
Council Decision
Town Council adopted Ordinance 25-18 on the first reading. The second reading is scheduled for October 28, 2025.
Short Term Rental Code Amendments
In December 2018, Frisco Town Council adopted Ordinance 18-10 establishing a regulatory framework specifically addressing the provision of lodging within residential dwelling units, otherwise known as short-term rentals. Ordinance 25-11 proposes changes to the administration of short-term rental licenses which includes and is outlined in the staff report:
- Transitioning from the Finance Director to the Community Development Director.
- Removal of language concerning building permits submitted by October 11, 2022.
- Clarifying that applications must be submitted electronically and an application fee of $25 must be paid to be put on the waitlist.
- Updating verbiage from bedroom to sleeping area
Council Decision
Town Council adopted Ordinance 25-11 on the second reading.
Loan Approval for PFAS Removal Facility at Well #7
In July 2022 after receiving a revised health advisory from the EPA recommending (not requiring) PFAS levels below detectable limits, Frisco decided to stop pulling water from Well 7, which had levels of PFAS above the 2022 recommended levels. It was possible to stop using Well 7 in the short term, as infrastructure improvements to other Town water sources had just been completed, so those sources were able to produce needed water. This allowed the Town to take the time to work through treatment design for Well 7. Well 7 is still not being used as a water source and will remain offline for as long as conditions allow and until the PFAS treatment system is installed.
In December 2021, the Town of Frisco engaged with contract engineer Plummer Associates, Inc. to study, develop, and implement a small-scale pilot program for the removal of PFAS (per- and polyfluoroalkyl substances). The pilot study was conducted from February 2023 through June 2024 and evaluated the performance of four different filter media types, consisting of Ion Exchange (IOX) and Granular Activated Carbon (GAC). The results demonstrated that both technologies were highly effective at removing PFAS.
After evaluating filter performance, life cycle costs, handling, and disposal considerations, the Town selected GAC as the preferred treatment technology for a full-scale PFAS removal facility. In June 2024, the Town applied to the State Revolving Fund (SRF) and successfully advanced through the program’s rigorous review process, resulting in the award of an $8,200,000 loan with 100% principal forgiveness.
The PFAS removal project permitting for Well 7 is nearing completion, and construction bidding is anticipated to begin in late fall 2025.
Council Decision
Town Council adopted Ordinance 25-12 on the second reading, authorizing the Town of Frisco to enter into a loan agreement with the State of Colorado, Drinking Water Revolving Fund for $8,200,000.
Frisco Town Council Meetings: Ways to Participate
Frisco Town Council meetings are available to view via Civic Plus Resident Portal, 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.