Developers may face jump in housing fees |

Developers may face jump in housing fees

Janet Urquhart

With the price of construction and real estate spiraling upward, Aspen is contemplating a significant hike in what developers must pay toward building worker housing.Everyone from the homeowner building a single-family residence to the developer of a large hotel has the option of paying cash in lieu of actually building at least some of the housing that the city requires as part of each development.But with available property in short supply and fetching top dollar in a booming market, the cash doesn’t necessarily help the city move closer to its goal of housing 60 percent of the resort’s work force in the upper valley.”The problem with cash in lieu is it falls back on the city,” Mayor Helen Klanderud said. “Although you’ve got the cash to do it, you don’t have anywhere to do it.”I think what we should look at is requiring them to build the unit, period.”Nonetheless, the council as a whole appeared interested in retaining the cash-in-lieu option for developers during a Tuesday work session discussion. Assistant City Manager Ed Sadler’s recommendation that the cash fee go up roughly 50 percent, though, also received a general nod of agreement. The council took no formal action.”Everything should go up by 50 percent, in essence,” Sadler said, “because that’s what we’re seeing in construction costs and the price of land. Bottom line is, we think it has to go up significantly to reflect current conditions.””Make the in-lieu payment real,” was how Councilwoman Rachel Richards put it.Currently, the Aspen/Pitkin County Housing Authority guidelines contain a complex formula for cash-in-lieu payments. The fees range from $124,307 to $252,244 per employee. There are also formulas to determine how many full-time employees a project will generate. Housing – or cash in lieu of the housing – must be provided for a percentage of them.The fee range reflects the income categories established for worker housing.The payment-in-lieu fee for a Category 3 unit is currently $199,132 per full-time equivalent employee. Sadler has recommended boosting that fee to $300,000 and adjusting the other fees upward accordingly.Housing Director Tom McCabe, however, said he’s not sure that increase is enough.”You not only have to build, you have to find the land to do it, and the land prices are just nuts,” he said.Builders of single-family homes or duplexes who choose to pay money in lieu of providing housing currently pay $68.36 per square foot of new construction. A new 5,000-square-foot house, for example, would generate a fee of $341,800.That fee should go up as well, Sadler said, though he did not specify what the new cost per square foot should be.In the recent past, the city has been able to pool housing dollars generated from cash-in-lieu fees and other tax sources to put toward Burlingame Ranch, a housing project now under construction outside town. Burlingame is the last piece of land the city has set aside specifically for worker housing, Sadler noted. It has “land banked” nothing else for future projects and is now looking at buying lots and existing residences to add to the resort’s inventory of worker housing, he said.Janet Urquhart’s e-mail address is

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