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City is eyeing private sector as a possible partner in housing

Janet Urquhart

What would it take for employers to step up as partners in the development of Aspen’s worker housing?

For one, a loosening of the rules that govern deed-restricted units, according to a handful of private-sector representatives who met with local housing officials Thursday.

The city has appointed a Public-Private Partnership Housing Task Force to make recommendations on how to accommodate the private sector as a player in housing projects.



The group represents a cross section of local employers for whom worker housing is an issue, including a local construction firm, the hospital, the school district, the Aspen Skiing Co., a bank and a nonprofit arts organization.

The task force has been meeting since February and is scheduled to wrap up its deliberations in May, forwarding its recommendations to housing officials and the City Council.




A similar task force was convened several years ago to brainstorm on ways to better involve the private sector in the actual design/development of public housing projects, and the city has since moved in that direction.

Now, the city is wondering if it can attract private-sector involvement in financing the housing program in a way that benefits both the government and employers, according to Ed Sadler, assistant city manager.

The city typically spends more building a unit than it recoups from its sale to a worker. The difference is the subsidy that’s covered by public dollars.

If the city can sell the unit for the full cost of its construction to an employer, the employer subsidizes the unit and the city recoups more money to build additional housing. Presumably, the employer gains a unit specifically for its own employees for less than it would cost to go build one or buy one on the free market, Sadler explained.

From the employer’s perspective, however, control over use of a housing unit will be a key consideration, predicted task force participant Richie Cohen, a member of the Aspen Santa Fe Ballet board of directors.

“We need, whatever we do, to have this out of the housing office’s control, so we become the owner/renter of it,” he said. “We need to be able to control it. The main concern is, we would have the flexibility to move people in, move people out.”

The city will not suspend all of the rules that govern worker housing if it sells units to employers, Dobson responded.

“To say you have no accountability to the rules, I don’t think will fly,” she said.

For starters, Dobson predicted, the requirement that residents of deed-restricted housing work full time in Pitkin County and live in the unit as their primary residence will apply.

“Those would be basics for any employer. That won’t change,” she said.

Also a matter of concern for the council will be what happens to a worker in an employer-owned unit who loses his or her job, she said.

“They’re concerned about people getting kicked out,” Dobson said. “There needs to be room for them to transition into other housing.”

At the city’s own employee housing complex, Water Place, a resident has up to six months to secure other housing after they’re no longer a city employee, she noted.

Employers, however, will want the flexibility to house workers of varying incomes in their unit and not be pigeon-holed by the income categories the city assigns to its housing, said Deb Fenton of Fenton Construction.

“If the goal is housing employees, does it matter who I put in there? We’re still housing employees,” she said.

It’s also possible an employer would want to provide a two-bedroom unit to a single individual, though buyers of government-controlled, deed-restricted units are held to a one-person-per-bedroom standard, task force members noted.

Fenton Construction may be interested in acquiring units for its work force because its employees are often unable to get a deed-restricted unit themselves for various reasons, Fenton explained.

Often they make too much money for what’s available, or they have no downpayment, or they’re new arrivals and don’t qualify to purchase a unit because they don’t have the four-year tenure necessary to successfully compete in housing lotteries, she said.

Much of the local construction industry is experiencing the same difficulty, Fenton added.

Rules could be established that allow an employer to charge rent to a worker that is commensurate with their pay; the dilemma becomes how much it should cost the employer to buy the unit, Dobson said.

“I don’t think it would fly for the unit to be a money-maker for an employer,” she said.

More likely, employers will be wondering if acquiring a unit is financially feasible, task force members predicted. They want to meet next with a local lender to find out if a business can take out a mortgage to buy a housing unit for employees.

If the Aspen School District could rent a unit to an employee for roughly the cost of the monthly mortgage payment, it may be interested in being a partner in a housing project, said Joanne Ihrig, assistant superintendent.

“If we could financially do it, I think we would definitely want to be involved in some way,” she said.

“It should be structured so we can get financing,” Fenton agreed.

The city tried to attract private-sector interest in its Truscott Place housing, but had no success. Because Truscott is a rental project, the city offered to sell “rights” to apartments, rather than the title to a condo.

Prices ranged from roughly $105,000 to $172,000, depending on the size of the unit, but businesses had little interest in owning the right to use a unit rather than the unit itself, said Michelle Bonfils, city project manager.

“Businesses look at it as investors – when will I get a return?” she said. “It is certainly not a traditional real estate investment. It’s an investment in your employees, which is, I think, a big challenge a public/private partnership program will face no matter what they do.”