Leigh Ann Gray was supposed to be living in a townhome with her family by now.
At least she thought she would when she signed a new construction real estate contract for a deed-restricted home with the Discovery Ridge subdivision back in April 2020. Though it offers the developer the possibility to delay construction, given unforeseen circumstance, the contract itself specified that “the estimated date for completing the Residence to Substantial Completion is no more than 12 months following the commencement of construction.”
Little did she know at the time, but construction wouldn’t commence until March 2022, and even then there would be more delays.
“We sold our house,” she said. “We’ve been renting ever since because there’s certain criteria in order to be able to buy an affordable house. You can’t own something else.”
More than three years later, her family is still renting. They’ve moved twice — a hard series of transitions for her son with special needs — and remain unsure when their townhome will be complete. It remains little more than a foundation, and though the developer says construction is now underway, Leigh is skeptical of any predicted completion dates she hears. She’s skeptical construction will be resumed at all.
Yet, according to developer Michael Milner, the numerous delays and extensions were not due to ill intent, but to necessity.
“COVID came in,” he said. “It had repercussions well beyond just the period of the pandemic.”
Construction became a challenge as a result, he said. When one crew member was found to have contracted the disease, the entire crew would have to leave a project site. For what he estimated to be six months to a year, operations became on-and-off pending positive tests.
Milner added that a “real-estate boom” also emerged from the pandemic, accompanied with material shortages and prices that soared through where Gray’s roof would have been.
“We lost our main contractor because he couldn’t get lumber,” he said. “This supply shortage created a gigantic increase in prices in 2021 and 2022. … The number went up 400 percent.”
Though he entered the real estate market in 1971, Milner said the increase was unlike anything he’d seen.
The development agreement he had entered with Summit County before building Discovery Ridge required that he had to complete a ratio of 1.5 to 1 market rate houses to affordable by certain snapshots, and though projects were built to meet the required number, Gray’s building — Building 2 — was pushed to the side.
It specifically was going to cost the company a loss it couldn’t afford at the time, according to Milner. Thus he faced choosing which affordable units could be feasibly subsidized by market rate units and built, while maintaining his agreement’s ratio and ensuring the development had the needed cash flow to continue.
“We had to pick and choose which buildings we could start to keep in with our ratios,” he said. “There became the problem with Building 2. It’s on the hillside. It has 19 feet high retaining walls and foundation walls.”
When asked if completing construction on the unit earlier could have been feasible, Milner said no.
“It couldn’t have happened,” he said. “The cash flow that was being generated was all being put back into completing all of the infrastructure on the project, which was millions.”
He predicted that Building 2 is going to cost the development a significant loss for each of the project’s five units.
“Every part — plumbers and refrigerators and everything — was the biggest single factor that made our affordable housing program go from we would lose a small amount of money but we would be able to get along with it to the extent that we would lose, well, like in Building 2, it’s $125,000 per door. That’s the loss.”
Over the years since the agreement was signed, as Milner has been calculating the subdivision’s losses, Gray and her family have been undergoing several of their own.
Since she and her husband signed the contract for their unit, interest rates have tripled. Concerned with a lack of communication with the developer, they hired a lawyer in late 2022 and have accrued thousands of dollars in fees. Soon after they sold their home to qualify for the deed-restricted program, they witnessed a significant increase in home values and experienced a similar increase in rent payments.
After construction finally commenced in March 2022, a letter this year from Discovery Ridge informed them and other future owners of Building 2 townhomes that weather and material costs would further delay the project indefinitely. Offers were made to release individuals from the contracts, but Gray had signed for a home, and a home is what her family needed.
All the while, Milner said communication was spotty because predictions were spotty. They couldn’t do much more than guess on timelines, he explained, which left the staff member in charge of deed-restricted units with very little information they could pass on to frustrated, waiting families under not-yet-fulfilled contracts.
Though he still specified construction timelines may vary dependent on the oncoming winter’s weather conditions, he said communications will now be forthcoming.
“I feel badly for the people. They’ve been under contract for a long time,” he said. “We’re sorry for the delays, but literally they’re getting a $900,000 townhome for about $350,000.”
People driving through Discovery Ridge, he added, will not know which units were deed-restricted and which were market.