Fewer employees from housing projects than thought
The Aspen Times
An independent study delivered to city officials this month found that residential development generates employees at about half the rate the city has been using for the past 25 years.
Since 1990, city officials have been charging affordable-housing mitigation fees based on the assumption that 3,000 square feet of residential development generates one full-time employee. Boulder-based RRC Associates delivered findings this month that suggest that same amount of square footage actually generates about half an employee. The researcher conducted the study at a cost of $33,000.
Based on the 1990 standard, the city has been charging about $80 per square foot when a residential development seeks to meet its mitigation requirement through a cash-in-lieu payment. The study suggests that amount should be closer to $35 per square foot.
Officials discussed the findings Tuesday during an Aspen City Council work session. Councilman Adam Frisch said that while the generation rate might be accurate, he believes the amount charged is a separate discussion because the cost of actually housing these employees is much higher than the study suggests.
“You can’t build for $36 a foot (in Aspen),” Frisch said, to which Community Development Director Chris Bendon agreed.
However, later in the meeting Bendon expressed confidence in the study and said the city should consider the findings on the employee-generation rate.
“Indeed we are maybe charging more than we should,” Bendon said.
The broader discussion, which officials also addressed Tuesday, is the cost of mitigation for all development, which officials have argued is unreasonably low. According to Affordable Housing Project Manager Chris Everson, construction costs at Burlingame Phase II were about $509 per square foot of liveable area, which includes construction of land, roads, access and other amenities. Peter Fornell’s affordable-housing project on Main Street cost $350 per square foot to build, but Everson has said the total cost was $5.2 million, and if you divide that by Fornell’s approximate 10,000 square feet of liveable area, the total comes out to $520 per square foot.
City staff has been tasked with reanalyzing how the city calculates fee-in-lieu fees for housing mitigation. Assistant City Manager Barry Crook offered seven different options for recalculating the fee, and Tuesday, the council narrowed the list to two.
One is a new gap methodology that separates land cost from construction cost. This method would use assessor’s data for the purpose of establishing land cost and would use prevailing construction rates for the purpose of establishing construction cost.
The second option would combine two options: the historical actual cost to develop and estimated costs for future development.
The city will schedule public hearings on both employee-generation rates for residential projects as well as the question of cash-in-lieu fees for overall development.
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