Melody Ranch Townhomes roofs failing

Repairs for failing roofs at Melody Ranch Townhomes are estimated to cost up to $157,000 per unit and will require residents to move out during construction.

Faulty construction at Melody Ranch Townhomes is saddling 24 homeowners with a caving roof, a $160,000 unanticipated expense and a lot of uncertainty.

“For some of us, we’ll be OK,” homeowner Brandy Larson said. “It will suck, to be frank. But for others, they might still lose their home.”

Built south of town in 1996 and 1998, the six fourplexes included deed restrictions meant to keep prices down so the homes would remain affordable to local workers.

Currently, eight units are permanently restricted as affordable, 13 are now free-market and three more are affordable but will soon be free-market. The units share roofs, with the roof replacement project estimated to cost as much as $157,000 per unit and require owners to move out for three months of construction.

After going to town and county elected officials for help, some homeowners feel the challenge presented by the failing roofs portends broader maintenance problems for the 800-some deed-restricted homes managed by the Jackson/Teton County Affordable Housing Department.

“The Housing Authority has no process, and no plan or ability for the long-term maintenance of these deed restricted units,” said homeowner Brian Modena, whose home is permanently restricted as affordable.

Housing Manager Stacy Stoker, however, sees the Melody homes’ roof situation as an isolated incident.

“I don’t know if a precedent is being set here,” Stoker said. “I don’t necessarily think that it is. These were faulty materials that didn’t work out, and apparently at the time they were using best practices for the time.”

Town, county step in

As the Melody units’ roofs rapidly deteriorated the owners found they had limited recourse. The HOA’s insurance won’t cover faulty construction, and the roofing company is out of business. The Housing Department has claimed it legally has no liability because it didn’t develop the buildings.

Free-market owners normally can finance the repairs against the equity in their home. But because the Housing Department’s deed restrictions on the eight units hold down their value, the eight affordable homeowners would struggle to leverage the value of their homes to finance the roof repair. Possible foreclosure and upside-down debt loomed. And because it’s a townhouse complex, these owners share roofs with free-market owners.

“There is no perfect fix here,” Housing Director April Norton said. “From the Housing Department perspective, we want to protect the deed restrictions. We also want to protect the families that are in there.”

After more than a year of negotiations with the Housing Department, the Melody homeowners and county staff approached elected officials seeking help at a joint meeting June 4.

Staff sketched out three choices: do nothing, help homeowners obtain private financing by increasing the values of the affordable homes or use tax funds to pay for roof replacements.

“The decision that’s before you guys today is if giving equity to the deed-restricted owners is something you’d consider,” Modena told officials, “because it’s not an out-of-pocket expense and it helps us solve this problem.”

Elected officials ultimately voted to increase the value of the restricted units in order to allow homeowners to finance the repairs. They voted to raise the homes’ value to the cost of constructing the roofs, up to $160,000 each (including $10,000 for temporary relocation costs during construction).

The units will also be designated “workforce” rather than affordable, which means they must be occupied by full-time local workers, instead of having an income limit for the homebuyer.

All county commissioners voted in favor of the valuation change.

“These are the people who make this community work,” Teton County Commissioner Mark Barron said. “I’m going to support this. It’s a good investment.”

Commissioner Greg Epstein added that the county has an interest in the long-term maintenance, because “a deed restriction is useless if you can’t live in it.

“In the free market, I have the ability to use my equity in my home to leverage a repair,” Epstein said. “It is a little bit on us. We are holding these homes to a certain value.”

Town councilors Hailey Morton Levinson, Arne Jorgensen and Jonathan Schechter also voted for the deal.

Against the plan

Councilor Jim Stanford and Mayor Pete Muldoon voted against.

Muldoon opposed raising the value of the affordable homes to pave the way for the roof fix. He said the town and county have an obligation to protect the eight “very valuable” affordable restrictions and keep the cost of the homes down. He said it’s unfair for the town and county to bail out the Melody Ranch owners but neglect to help other community members who struggle to afford their mortgages or are threatened with foreclosure.

“I know there are people in this community who’ve been struggling to find housing for many years and yet have never had that opportunity,” Muldoon said.

Although Jorgensen ultimately supported the valuation increase, he said increasing the homes’ values means “fewer people will be able to afford to buy these.”

“Those are members of our community that also matter in this discussion,” Jorgensen said.

The town and county also directed the Housing Department to negotiate the purchase of deed restrictions from the free-market Melody homeowners. Free-market owner Jesse O’Connor said he’s leaning toward selling a deed restriction to the Housing Department — which could mostly cover the roof replacement cost — rather than taking on a major loan.

“Moving all our belongings seems more bearable than that on top of a second mortgage and being out $160,000,” O’Connor said.

Even with the increased value for the affordable houses, roof replacement will essentially mean a second mortgage for most of the townhome owners.

Modena was grateful for the compromise from the town and county, but remained worried about the neighborhood: “We’re still going to lose homeowners. There’s homeowners that aren’t going to be able to afford a $150,000 mortgage on a house they paid $130,000 or $160,000 for,” he said.

A doubled mortgage is not something many can afford — especially those families that applied and qualified for income-restricted affordable housing.

“The whole reason why we were picked for this was because we could fit into affordable housing, and now we’re supposed to double our mortgage,” said Brandy Larson, who lives in a permanently deed-restricted home.

Larson said she had hoped the town and county would chip in for some of the roof repair since the restricted homes are “their investment as much as ours.”

If affordable homeowners can’t afford the roof repairs, they’ll be forced to sell their homes with the $160,000 in increased valuation held back toward the roof fix. A sale with a required three-month absence from the home could prove challenging.

Is it a precedent?

The town and county are increasingly overseeing the development of multifamily deed-restricted affordable housing at properties like 105 Mercill and 440 W. Kelly. Still, Stoker said she thinks the dilemma at Melody Ranch Townhomes is unlikely to repeat itself.

She said she checked with as many as six other housing authorities in the Mountain West, none of which had seen a similar scenario play out. The unique situation with roofs shared by a mix of units with different types of restrictions (or no restrictions) is uncommon, she said.

“The mix of restrictions within these buildings, the lack of ability to get financing on the restricted units, and the requirement that all four units within a building be fixed at the same time causes a larger challenge than if the units were separate,” the staff report said.

Jorgensen, however, suggested that the decision would “likely lead to more people in restricted units, on an individual basis ... when they’re getting into binds, coming in and making similar cases.

“That’s OK, they’ve got the right to do that,” he said.

Stoker said a potential policy change is “taking a much closer look at HOAs and how they’re managed, and making sure they have a decent amount of reserves.” However, upping reserves would require homeowners to pay increased HOA fees, making units less affordable.

Several homeowners feel the town and county have a responsibility and a stake in the long-term maintenance of an aging portfolio of deed-restricted housing and think funds must be earmarked for that purpose.

“This isn’t going be the last issue that an affordable or deed-restricted home has over time,” Modena said.

Contact Allie Gross at 732-7063 or county@jhnewsandguide.com.

Allie Gross covers Teton County government. Originally from the Chicago area, she joined the News&Guide in 2017 after studying politics and Spanish at Vanderbilt University in Nashville.

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(4) comments

Tim Rieser

Muldoon and Stanford are out of step with immobile decency. It’s interesting to note that they both enjoy deed-restricted housing of which at least one was built with a lot of taxpayer dollars. It’s the deed-restricted form of NIMBY. They got theirs, and their roofs are good!!

TERRENCE MILAN

Fortunately, they were out voted. That roof looks like a tarp. Can't believe they ever got an occupancy permit. I believe I am seeing politics at work now and then.

Tim Rieser

Disgusting government incompetence.

sean henry

just one of the many cracks in the system.Ellingwood units were told the same thing over 10 yrs ago. that will fall on the hoa in increased fees. might have to sell before i get hit with that bill..

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