Aspen purchases two affordable housing units
November 20, 2009
ASPEN – The city of Aspen has bought two deed-restricted condos, and plans to sell one of them on the free market and keep one in the affordable housing inventory temporarily.
Both properties, located at 910 W. Hallam St. and 104 W. Cooper Ave., have been rendered unaffordable because they are the only deed-restricted units in the complex and the special assessments levied on them were too high for their occupants.
The Aspen City Council agreed this week to pay the $3,615 assessment on the Hallam unit and then renovate it at the city’s expense for an estimated $82,000. The city bought the 765-square-foot unit in September from the Aspen-Pitkin County Housing Authority for $145,945. After it’s renovated, the city will sell it on the free market for a projected $725,000 selling price and put the net proceeds into the city’s affordable housing fund. Those proceeds are estimated to be $457,190, which takes into account $36,250 in closing costs and assumes a $725,000 sales price.
The council Monday also directed city officials to pay the $165,000 special assessment on the Cooper Avenue unit. The assessment was levied by the homeowners association to pay for a portion of a capital improvement project on the entire complex that involves enlarging the building’s footprint and updating the facade, as well as replacing the mechanical and electrical systems.
The work is currently under way, and when complete, the unit will be in a partially gutted condition, requiring a redesign and reconstruction, according to Scott Miller, the city’s capital asset director.
The garden level unit, across from Koch Park, is being increased from 878 square feet to 1,000. The building and the other five units are being updated to a finish level appropriate for units worth $1.5 million to $2 million. If the unit in question were to be completed to that level of finish, it’s estimated that it would sell for $925,000.
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But the council opted not to put an estimated $201,000 into renovating the unit but rather will sell it as a resident-occupied (RO) unit in the housing authority inventory with a 10 percent discount on the sales price, Miller said.
The RO category allows someone to buy the unit at a higher price than most deed-restricted condos. Individuals aren’t subjected to an income cap, but there is a ceiling on how many assets they can have.
That individual will be responsible for renovating the unit, and in return for his or her investment, the RO deed restriction will be lifted in five years, allowing the homeowner to have a free-market condo.
The city’s total investment to the unit is $317,730, which includes the $152,730 buyback cost and the $165,000 special assessment.
The RO deed restriction is contingent upon housing authority approval, Miller said.