City approves RO caps, new average price for housing units
New rules designed to hold down the price of affordable housing units won narrow approval Monday from the Aspen City Council following a lengthy and contentious debate.
The council, on a 3-2 vote, approved 1999 housing guidelines that establish income and price caps for RO, or Resident Occupied housing, and an average sale price for affordable units within individual housing projects.
RO sale prices are to be capped at $425,000 and the household income for buyers cannot exceed $600,000. In addition, the guidelines will require an average sale price of $170,000 for all the affordable units in an affordable housing project.
The guidelines continue to allow developers to build mixed projects containing 30 percent free-market housing, 30 percent RO and 40 percent lower-priced category units without entering the city/county growth management competition.
At the crux of last night’s prolonged and often heated debate was whether or not the City Council should subscribe to one developer’s claim that only higher sale prices for RO allow the construction of lower priced, lower category, affordable housing.
“The only way it’s achievable is if RO prices are high enough to pay for the lower end,” said private affordable housing developer Tim Semrau.
But Mayor John Bennett countered that although Semrau’s argument sounds logical, in reality, it’s “a myth.” Even under existing regulations, which place no price cap on RO, the lower-priced units have not been forthcoming, the mayor said.
“The pretense of let’s just let the private sector do what it will and there’ll be a wonderful payoff of lower units has never happened,” Bennett noted. “In the seven-year history that I know, there has never been a developer who offered any category ones, twos, or even threes. We’ve certainly held some developers’ feet to the fire, but no one ever volunteered it.”
Council members Jake Vickery and Terry Paulson voted against approving the changes to the guidelines. Vickery argued that the RO restrictions would drive away private developers and Paulson maintained he didn’t have enough information to support the proposals.
But Bennett and council members Jim Markalunas and Rachel Richards agreed the changes will ensure the construction of more lower-priced affordable housing, which is the greater need.
A 1995 survey of area residents found that 95 percent of households in the valley had incomes and assets that would qualify them for a category unit.
It’s a matter, Bennett said, of keeping “affordable housing truly affordable.”
The new housing guidelines must also be approved by the Pitkin County commissioners.
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