San Miguel County adopts limited deed‑restriction reversion policy after months of debate

After months of hearings and public comment, the San Miguel County Housing Authority on Sept. 3 adopted a resolution that gives some owners of county deed‑restricted homes a one‑time option to revert to prior versions of homeowner covenants while barring returns to an older county land‑use code that commissioners said would undercut the program’s purpose.

The board approved Resolution 2025‑23, “Correction and reversion of affordable housing deed restrictions and covenants,” after staff presented a framework that distinguishes owners by when they took title. Owners who purchased since June 2022 may keep their current restriction, revert to the prior owner’s covenant if one existed, or accept a 2016‑era covenant. Owners who purchased earlier will be offered similar, but narrower, choices; properties governed by separately negotiated covenants are not affected.

Board members said the action seeks to balance two aims: to remedy the confusion and stress caused by prior interpretations and to preserve a supply of homes for locally employed residents. Commissioners said they would not permit reversion to the older county land‑use code in any case, because that code lacks clear definitions of who qualifies as a local employee and would make the homes easier to sell to buyers not working in the district.

County staff said the measure will be implemented by a mail notice to owners, a 90‑day response window and a compliance drive starting after the holidays. Owners choosing to change their restriction must submit paperwork to San Miguel Regional Housing Authority (SMRHA) staff; SMRHA will maintain a public record of reversion requests. The county also agreed to update written procedures for compliance checks and owner notifications.

The vote was unanimous. Commissioners said they will still hear individual appeals and maintain an administrative compliance process, and staff said they will hold webinars and targeted outreach for owners whose files are incomplete.

What changed The resolution, as adopted, allows limited reversion only to prior covenant versions — not to the older land‑use code versions some owners sought. County attorneys said that would have created new, inconsistent standards across the housing portfolio and could allow buyers with minimal ties to the local workforce to acquire deed‑restricted homes.

The board acknowledged the policy is not perfect and that the county will receive more requests. County Manager staff said the policy is intended to be administrable, legally defensible and to preserve the central policy goal stated in local rules: maintaining an inventory of housing for residents who work in the Telluride R‑1 school district.

What's next Staff will mail notices to owners around Sept. 15, start a 90‑day election window, and delay formal compliance checks until after the holiday season. The board also directed staff to revise the compliance procedures and to bring any owners with unique facts back to the authority for individual review.

Ending note The action concludes a months‑long public process in which homeowners and civic groups pressed the county to correct decades of inconsistent interpretations. The new rules give many owners a choice while aiming to prevent an outcome that would effectively open a large share of the county’s deed‑restricted housing to out‑of‑area buyers.