City of Aspen to add two free-market condos to employee housing inventory |

City of Aspen to add two free-market condos to employee housing inventory

Condos outside of the urban growth boundary to be offered to city off Aspen employees at below-market rent

The city of Aspen is purchasing two free-market condos for $1 million apiece in its continued to effort to provide housing for its employees amid a worker shortage and a housing crisis.

Aspen City Council last week approved two purchase contracts for the condos, one of which is in Snowmass Village and the other at the Airport Business Center.

The Snowmass condo is on Lower Wood Bridge Road and is under contract for $1,025,000.

The two-bedroom, top floor unit has a loft and 2 ½ bathrooms in 1,215 square feet and is located outside of the urban growth boundary and outside of city limits.

The unit needs updating estimated at between $50,000 and $75,000, and three to five days of work for the city’s asset department, according to Angie Sprang, assistant to the city manager.

The other condo is located at 418 Pacific Ave. and is being purchased for $1,095,000.

The two-bed, one-bathroom, 686-square-foot ground floor condominium is in the Alpine Grove neighborhood.

The city can terminate both contracts and have $55,000 in earnest money for each unit returned pending numerous contingencies such as title objection, appraisal, inspection and other contingencies.

Staff is currently commissioning an inspection and appraisal, along with additional due diligence.

The contract price for each unit was based on an analysis by city staff and the municipal government’s real estate broker, which was determined on nearby comparisons, the price paid by the city for other land purchases in years past and the current market, according to Sprang.

The city will take possession of the Snowmass condo on Nov. 1, as there is currently a lease in place until Oct. 31.

The current owner gave the renter the option to update their lease, so the tenants can leave without penalty with a 10-day notice. So the unit may be available sooner for city staff, with the intention of using it for affordable employee housing or affordable employee transitional housing, according to Sprang.

The closing for the Alpine Grove condo is currently scheduled for July 11, with a possession date of June 30, 2023, which honors the current occupants’ lease.

The monthly revenues from the tenant lease are approximately $3,500. The current lease was for a two-year term; if the unit were to rent today on the free market the rate would be $4,000 per month, according to Sprang.

Members of the public present during council’s June 28 meeting criticized the city for purchasing the free-market units for various reasons.

“The city says it doesn’t like affordable housing tied to employers, but you are allowing city employees or officials to take advantage of that,” said Aspen attorney Chris Bryan. “Second, the city buying properties for their employees outside of city limits … for anyone mitigating affordable housing has to buy or build within city limits, and that just seems hypocritical to a lot of people.”

Affordable housing developer Peter Fornell questioned the source of funding for the city’s employee housing and the appropriateness of it.

“I think that those dollars … that go to purchase affordable housing should go straight out to the public lottery like the rest of it does,” he told council. “I don’t know why we’re providing some special dispensation to the city of Aspen employees.”

City Councilwoman Rachel Richards explained to Fornell how the city’s employee housing is paid for.

Funds for purchasing the properties are available from the 505 fund, which pays specifically for city employee housing and is funded in part by each municipal government paying into it annually.

Each department allocates a certain percentage of its budget into the 505 fund each year. It grows about $2 million annually. The fund balance is between $3 and $4 million.

The city currently has more than 50 rental and ownership units scattered around town that house government employees.

And that is not even close to what is needed in a 300-plus employee organization, Richards said.

“It’s very deliberate savings that the city has done, because the city is a little different than a restaurant or retail shop,” she said. “We can’t just close up and say, ‘That’s it, we’re not going to repair electric lines anymore, we aren’t going to plow the streets anymore, and we’re going to continue with a police department that’s limping along because we can’t fill positions because of the cost of free-market housing.’

“What we have not done is say that our employees would have any advantage in getting into the regular affordable housing funds that are created by the real estate transfer tax or the $.45 cent sales tax,” Richards added.

She went onto say she felt forced into buying the free-market condos because the city needs to provide services to the public that they expect and deserve.

“I support these purchases, and I do think they are part of a longer-term plan and security of what we need now in terms of personnel,” she said.

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