Basalt looks at new rules to tackle old housing problem
Council discusses new mitigation requirements, an end to cash-in-lieu of housing
Basalt officials have made it a priority to determine in 2022 how they can best use $6 million in new funding to take a dent out of the affordable housing shortage.
Options on the table include eliminating cash-in-lieu of housing, more flexibility in telling developers what kind of housing the town wants and voluntary “buy-downs” that would convert free market housing into deed-restricted stock.
“We need a mixed bag of tricks here,” Basalt Mayor Bill Kane said at a recent work session. “We can’t rely exclusively on new construction.”
Basalt voters in November approved $18 million in bonds for various town projects, including $6 million for affordable housing projects. The bonds will be paid off with property tax revenues.
Basalt officials acknowledged the amount is relatively small and the problem is immense, so they are looking at additional ways to tackle housing rather than just throwing money at it.
One tool may be telling developers what type or types of affordable housing they must provide. Basalt currently requires 25% of residential units in a project to be sold or rented under affordable housing guidelines.
“We’ve basically left it up to the developer to say, ‘This is what we’re proposing,'” Councilman Gary Tennenbaum said in a Dec. 14 work session on housing.
Most of the affordable housing being built in Basalt is rental, he noted. He wants flexibility to require housing that would be sold with price caps.
Cathy Click, a longtime appointee to the Basalt Affordable Community Housing committee, said it is frustrating that the board is advisory only. The committee essentially determines if a development application complies with the code.
“We don’t have the teeth to force or suggest anything else,” Click said, referring to developers’ proposals.
Other council members agreed more flexibility is needed for the town government, but they said Basalt must first conduct a study to see what mix of rental and for-sale affordable housing the town needs. Funds have been budgeted for such a study in 2022.
On a related issue, the council unanimously supported the idea of making developers provide housing rather than providing funds instead of housing.
Currently the town code allows a developer to reduce the amount of affordable units from 25% to 15% of the overall residential count if they provide a 1.5% real estate transfer assessment on sales of individual units or projects.
“We need the housing more than we need the money, in my mind,” Councilman David Knight said.
The other board members agreed. Councilman Bill Infante said any regulation should face a simple test: Will it result in more affordable housing?
Click said it will be impossible to “build our way out of the affordable housing shortage,” but the town would benefit from stricter affordable housing mitigation.
“I think making it easier to build affordable housing units and harder to build free-market units is really something that should be on the table,” she said.
One challenge facing Basalt is how to get residents out of rental units and into ownership, if they so desire. Councilwoman Elyse Hottel said most renters in Basalt must move away if they want to buy housing because of the disparity between incomes and housing prices.
Mike Kosdrosky, former executive director of the Aspen-Pitkin County Housing Authority and current member of the Basalt Affordable Community Housing committee, said it might not be realistic for the town to aid renters to make the transition into ownership. The median residential price in Basalt is between $700,000 and $800,000.
“I don’t think the town of Basalt has the fiscal wherewithal to help bridge that gap from rental to ownership like some other communities can,” Kosdrosky said. “I think the gap is too wide frankly at this point and for the foreseeable future.”
He said Basalt must clearly define what its housing goals are so the town government and developers can pursue solutions.
“Otherwise we’re going to be chasing our tails and we’ll never close the gap,” he said.
One idea that interested council members was using its limited funds to provide a subsidy on free-market units to make them deed-restricted. The process is known as a “buy down.” The program would be voluntary for free-market housing owners and developers.
No decisions were made at the Dec. 14 work session but the council will resume discussing affordable housing strategy at its first formal meeting of 2022 on Jan. 11.
With many lingering questions still surrounding the fate of Aspen’s historic Old Powerhouse, City Council decided during Monday’s work session to hold off on providing staff direction on moving the preservation project forward until more information can be presented.