Aspen City Council advances affordable housing efforts
Two-day retreat reflective of community’s needs and desires amid housing crisis
With mounting pressure to keep the community intact amid a growing housing crisis, Aspen’s elected officials are looking at myriad ways to increase the inventory of deed-restricted units as part of an overall strategic plan, including identifying more financial resources.
The city of Aspen has the lion’s share of the burden in providing affordable housing because it is the largest collector of tax revenue dedicated to that purpose.
But even with $10 million or $20 million coming in annually — depending on economic conditions with the city’s real estate transfer and sales tax revenue — it’s not enough to keep up with the demand.
During an all-day retreat on Monday, Aspen City Council members discussed opportunities for other taxing entities, like Pitkin County, neighboring communities and agencies to ask voters to pass their own affordable housing taxes.
Councilwoman Rachel Richards said the city’s boundaries on collecting its 0.45% sales tax for affordable housing do not reach far enough, and businesses elsewhere in the county, like the Aspen Business Center, part of Basalt and restaurants on the ski areas should be paying into the solution also.
“The public has all the sense of the need for housing on the city only but the resources are not coming through the greater community that need our housing,” she said.
Richards added that a regional sales tax, like the one that funds the Roaring Fork Transportation Authority and is paid through jurisdictions throughout the valley and the Interstate 70 corridor, could go a long way in building much needed workforce housing in other communities outside of Aspen.
In addition to the 0.45% sales tax, the municipal government collects 1% on any real estate transaction within city limits, and combined, those revenue resources go into what is called the 150 Fund.
The current balance of that fund is $55 million, with a portion of that already dedicated to the city’s third phase of Burlingame Ranch, which includes 79 new units at an estimated cost of $48.8 million, not including land and other costs.
The city’s next government-driven affordable housing project at the Aspen business center could include roughly 300 units at an estimated cost of $300 million.
Both the city’s real estate transfer tax and sales tax dedicated to affordable housing are set to expire in 16 years and will need to be renewed by voters at some point.
City Finance Director Pete Strecker told council Monday that if the municipal government wants to borrow money for future housing projects, those revenue streams will need to be solid through the terms of the debt service.
“If we’re going to leverage for some sort of debt program, we would definitely need to harden that before we did something, otherwise we have a very short duration that we can amortize,” he said.
Other possible revenue streams could be found through taxes on short-term rentals or vacant homes, or more mitigation and impact fees on free-market development.
Council members also went into deep dives on the lingering issues related to housing, including better utilizing the 3,000 ownership and rental units in the Aspen-Pitkin Housing Authority inventory so every bedroom is being used, as well as securing deed restrictions that are set to expire in apartment buildings in a couple of decades; buying free-market buildings to convert them to affordable housing; and partnering with other entities like Aspen Skiing Co., the school district and other governments.
Elected officials expressed their concern about losing the middle class in Aspen and leaving behind no community other than billionaires and busboys.
“The acceleration of that trend over the last few years is unfathomable,” Councilman Skippy Mesirow said. “There is this massive misalignment between where we go to mitigate or raise funds for affordable housing, which is largely the commercial sector versus where the displacement of workers and job growth is coming from the residential sector.”
Mayor Torre said council’s action and thinking around that paradigm shift and the changing demographic in the community cannot be underestimated.
“It’s a different time right now, so what are our approaches going forward?” he said. “We’ve had success but it has to change.”
Councilman Ward Hauenstein noted that the city can’t build its way out of the problem, so growth has to be tampered.
“Best we can do is mitigate as much as possible,” he said.
Councilman John Doyle agreed, and said development is what impacts the community the most.
“It just seems to me that we should be taxing the people who benefit the most from our work source,” he said, adding a lot of businesses are operating on shortened hours because they don’t have enough employees. “At this point we can’t take any options off the table.”
Council will continue its housing retreat Tuesday from 9 a.m. to 1 p.m. and will focus on building a strategic plan.
The retreat is open to the public and will be held in the Pearl Pass conference room on the third floor of the new City Hall on Rio Grande Place.
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