Council supports prior direction on housing credits
September 24, 2014
Editor's note: This article has been modified from its original version.
The Aspen-Pitkin County Housing Authority and Habitat for Humanity will continue exploring options to deliver an affordable duplex on Cooper Avenue after a discussion with the Aspen City Council on Tuesday.
The housing authority plans to donate a 6,000-square-foot lot, located at 1230 E. Cooper Ave., to Habitat for Humanity Roaring Fork Valley, which would in turn build two Category 1, three-bedroom units. Neither the city nor the county has ever built anything in the lowest income category.
The housing authority, which bought the lot for $289,753 in 2009, and Habitat were seeking three affordable-housing credits to offset costs associated with the project. The certificate program, established in 2010, makes credits available to developers who build beyond affordable-housing requirements. The credits — which the city estimates could carry a price tag of as much as $300,000 each — can then be sold to other developers who need to mitigate their own projects.
Though nothing in the program ordinance prohibits Habitat from requesting credits, Community Development Director Chris Bendon argued that anything that has the appearance of using public funds to assist a private development creates "a significant policy issue."
"If we were going to take our checkbook out and write a check for $500,000 to Garfield & Hecht or to (developer Mark) Hunt or to really any development group in town, I think you would have a very significant public-policy discussion on the purpose of that activity," Bendon said.
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Another concern is that an entity receiving public subsidy can sell the credits for much less than a non-subsidized developer and still make their project work financially. This would drive the price of credits down, making projects like the one Peter Fornell has planned on Main Street unfeasible.
At the urging of Fornell in 2010, the council created the credit program. Informal council direction at the time said that no public or nonprofit entity whose core mission is to provide affordable housing should seek credit certificates because it dis-incentivizes participation from the private sector.
On Tuesday, the council discussed the situation in broad terms, attempting not to address the Habitat project directly. The council majority agreed with the informal direction from 2010, though it had the option to reconsider. Code amendments, based on the spirit of the prior council's direction, will take effect in 60 to 90 days. The housing authority has the option to pursue housing credits in the meantime.
Councilman Dwayne Romero said he was uncomfortable abandoning the prior direction, while Mayor Steve Skadron agreed with Bendon that introducing public money into the program would create a disadvantage for the private sector.
Councilman Adam Frisch applauded both the housing authority and Habitat's efforts to build Category 1 housing but said there needs to be a separate discussion on how to stimulate the project.
Though Scott Gilbert, president of Habitat for Humanity Roaring Fork Valley, was disappointed by the meeting, he said he had a very constructive discussion with officials afterward. He described an excitement and willingness from officials in discussing options outside the certificate program.
"Clearly there's a lot of interest in trying to find a way to partner and get a Category 1 house for two families who make less than $50,000," Gilbert said.
He added that no exact options were offered, but it will be up for discussion in the future.