Affordable housing bill, key to Aspen, advances at Statehouse
DENVER – A bill that seeks to uphold local governments’ ability to enforce deed-restricted housing is moving through the House of Representatives, with an affirmative vote passed by a General Assembly committee on Tuesday.
House Bill 1017, sponsored by Rep. Daniel Kagan, passed 6-5, after a four-hour hearing in which Aspen Mayor Mick Ireland, Pitkin County Attorney John Ely, Aspen-Pitkin County Housing Authority (APCHA) attorney Tom Smith and local developer Tim Belinski testified.
The bill clarifies that nothing in the rent-control statute shall prohibit or restrict the right of a property owner and a public entity from voluntarily entering into an agreement that controls rent.
The bill’s success has local implications in that at least one property owner is involved in two lawsuits with the city of Aspen and APCHA.
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Ronald Myerstein, through his Aspen-based attorney, Herb Klein, is attempting to lift the deed restrictions on several employee housing units on property he owns.
They are citing what’s known as the Telluride case, in which the Colorado Supreme Court in 2000 ruled in favor of a developer and against the town of Telluride. The state high court ruled that local governments cannot set rents in privately owned projects and that deed restrictions on the property are an illegal form of rent control.
Judge Gail Nichols of the Ninth Judicial District Court last year ruled against Myerstein, who owns 18 deed-restricted condominiums at the base of Highlands that were set aside for Aspen Skiing Co. employees during the winter and students of the Music Associates of Aspen during the summer.
Myerstein filed the suit in the spring of 2008, arguing that the deed restrictions placed on 12 of the dorm-style units were unenforceable and unconstitutional, based on the Supreme Court case that invalidated the town of Telluride’s affordable housing guidelines; the justices ruled that the guidelines violated the 1981 prohibition on rent control.
Myerstein was found in violation by APCHA in January 2008 for illegally renting the dorms at Highlands – encompassing 63 beds – to employees of the St. Regis Aspen Resort. APCHA argued that Myerstein breached the original Highlands Base Village approval, which was dependent on making the seasonal units available to the music festival.
The Myerstein Trust bought the condominiums from Hines for $5.65 million in 2005. The trust also owns the Ute City Place apartment building at 909 E. Cooper Ave., which houses St. Regis employees. That property was purchased for $2.1 million in 2002.
In April 2008, Myerstein filed a second lawsuit against the city and APCHA, arguing that the deed-restriction controls at Ute City Place were unconstitutional and constituted a “takings” of his property.
In that case, 9th Judicial Judge Denise Lynch ruled in favor of Myerstein, and against the city and APCHA.
Both cases are in the court of appeals, one levied by Klein and the other from APCHA, which filed its response motion in the Ute City Place on Monday.
“This bill, if it passes, will help dramatically in narrowing what the court considers in these cases,” Smith said. “Obviously we’re pleased to see the bill out of committee.”
HB 1017 will move on to the House of Representatives, and if it’s passed there, it will be reviewed and voted on by a Senate committee and then go on to the state Senate for final approval.
Smith, APCHA’s attorney, said the bill hasn’t been able to get out of the General Assembly committee for the past two years.
But apparently the swing vote came from Rep. Sue Schafer, Ireland said.
Both Ireland and City Attorney John Worcester said the bill has a good chance of passing.
“Having it come out of committee now is good because Democrats control both the Senate and the House,” Worcester said.
In Tuesday’s hearing, 20 to 30 people testified. Smith said the opposition mostly was based on the unfounded concern that the bill would allow local governments to force rent control on already established free-market properties.
“It doesn’t happen now and it won’t with this bill,” Smith said.
What it does attempt to do is allow developers to control who lives in their affordable housing units and be able to negotiate with local governments to gain approval for a project by providing deed-restricted units for the local workforce.
“It will allow us to enforce agreements with developers about rental housing,” Ireland said.
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