City takes baby steps for senior housing | AspenTimes.com

City takes baby steps for senior housing

Abigail Eagye

Aspen, CO ColoradoASPEN Aspen is making strides toward helping the Aspen Country Inn pay off its debt. The ultimate purpose is to help avoid rent increases at the apartment complex, which gives priority to low-income seniors, but a secondary goal is to acquire the necessary control to do needed maintenance in the short term.The use of federal tax credits helped buy the property through several third-party partners, and when the term of the tax credits expire in 2030, ownership of the inn will revert to the city.But the Aspen/Pitkin County Housing Authority, which manages the property but doesn’t technically own it, would like to perform maintenance on the property as it is necessary, rather than waiting for the property to fall into complete disrepair, when upkeep likely will cost more. City Finance Director Paul Menter told the council that the housing authority can’t really spend money on capital maintenance with the current financial setup.Because the city doesn’t technically own the property now, the rent collected from tenants must cover both operations and debt repayment. A memo to the council from Menter’s office and Housing Director Tom McCabe stated that annual rent increases are necessary to meet those obligations.But the city has agreed to defer those increases in recent years to subsidize rents for the low-income senior population the property is intended to serve.If the city can help pay off the debt now, it can eliminate the middle man and save money – much like paying off a mortgage before it is due.The city’s finance department recommended the council approve an interfund loan at a below-market rate to allow the housing authority to pay off the debt, saving $2,553 a month and $30,239 per year through 2030. The housing office could use the savings to continue subsidizing rent for the low-income seniors.It’s essentially an “interfund loan from housing to housing,” said Mayor Helen Klanderud, who supported the proposal at Monday’s meeting.The total loan would be approximately $1.9 million, which includes a roughly $383,000 penalty associated with paying off the debt early – again, similar to paying off a mortgage years before its due.”It puts us in control of allocating housing resources to ensure that Aspen Country Inn has the resources to maintain [the property] over time,” Menter said.Using the federal tax credits to buy the property puts some restrictions on the rental property, namely the priority for low-income seniors. But that was the city’s goal in buying the property anyway, and Housing Director Tom McCabe said the city intends to continue giving those seniors priority after the tax credit term expires in 2030.Although the housing authority manages the property, the rules for setting rents are somewhat different from most of the rentals in its pool because of the tax credit wrinkle. (Truscott II has some similar restraints.)Currently, rent for 15 percent of the units at the inn (roughly six) must stay at 40 percent of the area’s median income. The remainder of the units must be held at 50 percent of the median income, and seniors (age 62 or older) have priority. If more than one senior qualifies, priority goes to the senior with the longest work history in Pitkin County.Councilman Jack Johnson also supported the plan to pay off the debt, but he proposed the city/county housing board approve the plan first; Councilman Torre agreed.McCabe said he suspects the housing board will “have no difficulty” supporting the finance department’s recommendation, and he expects the board will approve the plan at its next meeting.Abigail Eagye’s e-mail address is abby@aspentimes.com

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