Housing need an expensive proposition for Aspen government
With a finite amount of money in the city of Aspen’s housing development fund, elected officials are in the midst of prioritizing projects and considering asking voters to issue debt of as much as $50 million to continue building subsidized units to house the community’s workforce.
Aspen City Council is scheduled to discuss during Tuesday’s work session funding constraints that the 150 fund has, and how that factors into future housing projects.
Council on Monday during a work session briefly discussed the fund and how to pay for two planned projects — the third phase of Burlingame Ranch and a new development at the old lumberyard at the Aspen Business Center.
City Finance Director Pete Strecker said while the fund has a “healthy” balance going into 2020, all of it will be spent on Burlingame 3.
On Tuesday, council will consider scenarios on how to pay for Burlingame, the lumberyard and any future projects, maintenance of existing housing stock or land acquisitions as part of land banking efforts.
“This conversation (Monday) and (Tuesday) night is the successes we’ve had in the affordable housing program in the city of Aspen over the years but realizing that going forward we have very significant competing priorities and ultimately a finite revenue stream,” said Ben Anderson, the city’s principal long-range planner. “The impetus for the conversation (Monday) and (Tuesday) night is trying to contemplate whether we (fit) other affordable housing opportunities into this already set list of priorities we have.”
Council members met in executive session Monday to discuss possible land acquisitions as part of the context on how to spend the money coming into the 150 fund.
It’s funded by a 1% real estate transfer tax, a portion of a 0.45% sales tax and development fees.
Strecker told The Aspen Times on Monday evening that he did not know the fund’s current balance, but it opened the year with $53.5 million.
“That said, the majority of this balance was already earmarked to push Burlingame 3 forward, but was also a holdover for the unspent spending authority approved to complete the three public private partnership projects on Main (Street), Park (Circle), and Castle Creek,” he wrote in an email.
Strecker told council Monday that the funding source can be volatile because of the real estate boom and bust economy here.
However, because of the COVID-19 urban exodus, real estate sales are projected to put $10 million in the coffers this year, Strecker said.
“It’s a lot more than we anticipated,” he said.
But that’s still not even close to paying for the hundreds of units that are being planned at Burlingame 3 and the lumberyard.
“Council has expressed interest in issuing debt to augment 150 fund revenues, which could be used to accelerate the creation of more affordable housing,” reads a memo from city staff. “If Burlingame 3 is to be completed by mid-2022 and then if construction on the lumberyard is to begin in 2024, it appears necessary to issue debt to facilitate this sequencing. “Additionally, it also appears that, even if City Council does choose to issue debt to support the lumberyard construction start in 2024, the size of the first phase of the lumberyard will need to be limited.”
Development approval for Burlingame 3 was put in place nine years ago, and the lumberyard property was purchased in 2007 for $18.25 million.
Council will consider three cash flow scenarios for the 150 fund, which include building Burlingame 3 in 2021 and 2022 and the lumberyard in one big phase in 2024 through 2026, with no other projects.
Other scenarios suggest other future projects and phasing the lumberyard development, which is being planned for as many as 300 units.
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