Aspen City Council pumps brakes on impactful fees to longtime property owners

Ordinance 24 would add hundreds of thousands of dollars in affordable housing mitigation fees for residential development

Members of the public address Aspen City Council during the last meeting held at the Armory building on Tuesday, Dec. 14, 2021. The next time council meets is on Jan. 10 and it will be in the new City Hall located at 427 Rio Grande. (Kelsey Brunner/The Aspen Times)

Recognizing that the legislation before them Tuesday night would negatively impact longtime locals and cost them hundreds of thousands of dollars, Aspen City Council unanimously voted to table an ordinance that aims to mitigate employee generation on unbridled growth in the residential real estate sector.

Council during its regular meeting punted on passing Ordinance 24, which would amend the land-use code and add significant affordable housing mitigation fees to single-family homes and duplexes when they are demolished or square footage is added.

Council heard from a handful of property owners who said during public comment that the addition of between $400,000 and $500,000 in mitigation fees would drain their savings accounts, affect the equity in their homes and impact their ability to obtain construction loans, to name a few concerns.

“What is this likely to do? What do you think it’s going to do? I think it’s tens of millions of dollars and it’s very, very significant,” said longtime local and property owner Mike Maple. “On the one hand, that’s awesome. On the other hand … it has very, very real implications for the residents of your community.”

It would on Fred Peirce, who owns a house that is more than 50 years old and likely requires a full demolition to bring it to current standards and codes.

“Two years ago I was being told that the cost of this kind of work, construction costs combined was going to be over $600, $700, $800 a foot and I look at your numbers … and it would add another $200 a foot and suddenly it’s pretty much out of reach for a guy like me to do the work,” he said, adding that the city’s actions would force him to sell and leave the community, which is not what he wants to do. “Another thing that happens if you think about it is that when you add that fee in there, you’re basically deciding that the investment I made to my house is available to you for your purpose.”

Council members agreed that the impacts of the mitigation fees are severe enough to local working residents that the ordinance and the concepts in it be folded into the work city staff and hired consultants will be doing as part of the municipal government’s six-month moratorium on residential development, which was passed as an emergency last week.

The moratorium is designed to give city officials time to align the land-use code, the affordable housing mitigation system and the Aspen Area Community Plan to the unprecedented pace of development in the residential market.

That work will include residents who will be impacted, as well as those who are in the development community.

“I don’t think what we are looking at is a huge change or a huge ask here. I myself support these new mitigation numbers as they are,” Councilman Skippy Mesirow said. “What I want to do is support them knowing that the impact on our locals who are living in free-market housing has close to zero impact on them as is physically possible up until the moment they choose to sell to someone who won’t be here.”

He added that while the city takes a step back, it will capture less affordable housing dollars from current redevelopment.

The proposed changes to the land use have been a conversation at the council table for 18 months, according to Ben Anderson, the city’s long-range planner.

The idea is that many of the old properties that are being rebuilt were never mitigated for and the new calculations address the city’s antiquated affordable housing mitigation system.

There are two main changes proposed in the land-use code for the purposes of affordable housing mitigation.

The first is eliminating credit given to existing floor area, so for example if a 2,000-square-foot home is demolished and replaced with a 3,000-square-foot one, the owner would have to mitigate for all of it and not get a credit for the existing floor area.

Under that scenario, mitigation fees would jump from $60,236 to $180,708.

The second change is eliminating exemptions for basements and other square footage areas, like garages and stairways.

So if a home was 3,000 square feet above grade and 3,000 square feet subgrade, the mitigation rate for demolition under current rules would be $108,708, and under the proposal it would be $474,358.

Councilwoman Rachel Richards said she hopes for a speedy analysis of the impacts the ordinance has on longtime locals and staff can work out the conundrums that they are facing in a timely manner.

“I really don’t want to put this out until the end of February and X amount of more unmitigated growth go through, which continues to attract our problem,” she said. “I do agree there is a real issue here and I’d like to find ways to work it out.”