Economic downturn hits Aspen employee housing, too |

Economic downturn hits Aspen employee housing, too

Janet Urquhart
The Aspen Times
Aspen, CO Colorado

ASPEN ” For the first time in memory, owners of deed-restricted employee housing in Aspen or Pitkin County could lose money on the sale of their unit.

No one has, though, and with the consumer price index, or CPI, that the housing office uses to calculate sale prices creeping upward again, it’s possible no one will, according to Cindy Christensen, operations manager for the Aspen-Pitkin County Housing Authority.

“Our prices have gone down ” just like prices in the free market have gone down,” she said. “If they bought [a unit] last year, it’s gone down from the price they bought it for.”

Owners of employee housing have generally been immune from the vagaries of the real estate market because deed restrictions on the units cap appreciation. Appreciation on most units is limited to 3 percent or the CPI, whichever is less, though some units have caps of 4 or 5 percent or the CPI, whichever is less. Homeowners in the program can’t realize great gains when the real estate market is booming, but they’ve generally not lost money, either.

In 2008, the CPI used by the housing office leaped upward for the first half of the year, then took a nosedive toward the end of the year, according to Christensen.

So, if someone bought at its zenith and put their unit on the market now, they’d lose money.

“It’s very, very unusual,” Christensen said.

“So far, we haven’t had anyone who bought last year who wants to sell this year,” she added. “If someone who bought last year can wait for awhile, they’d at least get their money back out of it.”

That’s because the CPI appears, at least, to be edging upward, she said. It has increased a bit in every month so far this year.

The housing office has used the same index since 1978, when the program began, according to Christensen. It is the U.S. city average of the CPI for urban wage earners and clerical workers.

For owners of deed-restricted housing, appreciation is calculated based on how long they’ve owned the unit and either the 3 percent cap or the CPI, whichever is less. The CPI calculation is based on what the index was when the unit is purchased and what it is when the unit is sold. What the index did in the intervening years is irrelevant.

When the housing office annually adjusts rents for rental units in the housing program, sale prices and maximum household incomes for buyers, the changes are based on what the CPI does in a one-year period from November to November.

From November 2007 to November 2008, the CPI used by the Housing Authority increased 0.7 percent. The good news, for renters looking to renew their lease in the coming months, is they’ll be looking at a rent increase of less than 1 percent.

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