Aspen weighing interest in more Burlingame units
The Aspen Times
Aspen, CO, Colorado
ASPEN – Against the backdrop of a sluggish worker housing market, the Aspen City Council next week will try to gauge interest in Phase II of its Burlingame Ranch housing project on the outskirts of town.
By the close of last week, 155 people had signed a reservations list for future units at Burlingame – a number that might change by Friday, when Chris Everson, city affordable housing project manager, prepares a summary on the Burlingame pre-sale effort for the council’s July 18 work session.
Of the 155, 50 people had qualified as buyers through the Aspen/Pitkin County Housing Authority – a step that means documenting their local work history and providing detailed financial information regarding their income, assets and debts.
The city has not directed those who sign up on the pre-sales list to prequalify with a bank – a move that would give the council some assurance that workers who say they’d like to buy a Burlingame unit actually could qualify for a home loan.
“The information we’re getting is really just a baseline sign-up list,” Everson said.
The preliminary total included 34 buyers who already own deed-restricted housing, set aside for qualified workers. Most rent; while some own in the free market. Of the 155, 85 percent indicated they had four or more years of local work history – a mark that gives them priority status in the worker housing program.
Though the numbers are likely to change by the time Everson compiles data late this week for his memo to the council, the early numbers give a sense of the issues the council must weigh in deciding whether or not to go forward with Phase II of Burlingame, or when.
The first phase of Burlingame included 91 homes; another 167 are planned and could be built in phases. The next steps could include moving forward with the land-use approval process for Phase II – getting the approvals in place so the city can build the housing when it decides the time is right – and seeking a higher level of commitment from prospective buyers. Initially, the city had considered seeking a $500 refundable deposit from interested buyers and asking them to prequalify for a bank loan as the next step in the pre-sale process, but without assurance that the project is moving forward, the deposit might represent a difficult request to make of people, Everson said.
“I may have to ask council for some sort of incremental bone to throw the buyers,” he said.
On Monday, it appeared that the council won’t know what income category most of the interested buyers fall into, as only some of them will have qualified through the housing office. Income categories correspond to prices for the units themselves; in Burlingame Phase II, Category 2 is expected to be the lowest-priced unit and Category 7 the most expensive. The lower the price of the unit for the buyer, the higher the subsidy the city will pay to build it.
“My suggestion is going to be to remain flexible,” Everson said.
For example, eight units in Phase II are currently slated for Category 7, but if there aren’t enough buyers in that price range, the price category of the units can be dropped back later, he reasoned.
The council must also consider how many prospective buyers already reside in deed-restricted worker housing. If those individuals move into Burlingame, other units in the program will go back on the market, creating the potential for a glut of housing at a time when demand might be relatively low.
Sales activity in the housing program in general was slow for the first half of 2011. Housing office records indicate that 24 sales, worth about $4.5 million, closed by June 30. In addition, three other deed-restricted units were sold by their owners rather than the Housing Authority.
In the first half of 2010, there were 40 sales worth a total of $10.7 million, housing records show.
Sales occur when a worker is ready to give up a unit for whatever reason, or when new units are put up for sale for the first time. For most units, buyers are chosen through a lottery system. The number of lottery participants is one way to gauge interest in the demand for worker housing, and the numbers have dipped with the recession, particularly for higher-priced units.
Most units sold so far this year have attracted less than a dozen interested buyers.
A one-bedroom, one-bath unit at Benedict Commons sold in June for $159,177. The lottery attracted 39 prospective buyers, also referred to as bidders – among the most of any lottery this year.
“Benedict Commons, especially the one-bedrooms – we used to get 60, 70 bids,” said Cindy Christensen, housing operations manager. “We’re definitely seeing fewer people going for these units.”
Among Burlingame Phase I units, four came up for sale in the first half of the year, but only one sale had closed by June 30 – on a two-bedroom, one-bath unit priced at $284,833 (Category 4). It attracted just two bidders.
A Category 2, one-bedroom, one-bath condo at Annie Mitchell Homestead attracted 17 bidders in February; in 2008, a similarly priced unit at Annie Mitchell drew 42 interested buyers.
Mayor Mick Ireland said he’s not looking at the reduced number of bidders who might be in the pool for a one-bedroom unit these days when he considers the need for Burlingame, much of which is geared toward families. He’ll be looking at real demand for Burlingame units in particular.
“The beauty of pre-sales is, you don’t build it until you have the people who are interested and are pretty well committed,” he said. “We want to match the actual demand as opposed to conjecture.”
Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.