How much for housing?
The Aspen Times
A new method for calculating how much new development in Pitkin County should pay toward worker housing will be the focus of a discussion by county commissioners this week.
Tom McCabe, director of the Aspen/Pitkin County Housing Authority, will outline the approach at a work session Tuesday.
Both the county and the city of Aspen have long required new development to either provide actual worker housing or a fee in lieu of housing for a portion of the workers the development generates. Local governments spend the fee proceeds to provide subsidized housing for workers who qualify to own or rent it. Calculations of job creation, whether the project is a new hotel in need of a staff or a mansion that will be served by housekeepers, gardeners and such, are part of the formula for determining how much housing, or a fee in lieu of housing, is required.
How the existing fee calculation was actually arrived at, though, isn’t clear, according to McCabe. What is clear, he said, is that the fees in place in the city and county don’t cover the entire cost of providing housing for workers generated by new development.
“The fee we have now is certainly too low,” he said. “It doesn’t really come close.”
The housing authority contracted with outside consultants to examine the existing approach, look at what other communities are doing and come up with a fee calculation that can be easily understood, updated regularly and defended in court.
What’s now proposed is a fee that’s calculated based on the difference between the market price of housing and the price that is affordable for households at targeted income ranges. It’s called the “market-affordability gap methodology.” The fee can be calculated and expressed in a dollar amount per unit, per employee and per square foot of housing.
According to the consultants’ report, the proposed method was tested in a Gunnison County lawsuit and found to be reasonable and sound by a district court. It involves calculating the amount that households in each targeted income category can afford to pay for housing, determining the market price for housing using data from previous home sales and comparing market prices to affordable amounts to determine the per-unit gap that exists for each income category.
For example, the consultants offered this calculation: A two-person household with a $83,200 annual income could afford to put $345,694 toward housing — a sum that includes a mortgage, homeowner dues, taxes, insurance and a 5 percent down payment. The market price for a 900-square-foot unit would be $780,300. The difference (or the gap), plus a 2 percent administrative fee, is $443,298 for the unit. The calculated fee per employee is $277,062 — a number that reflects the $443,298 gap divided by 1.6 employees per unit (the average based on a 2008 survey).
While the city of Aspen currently has its own requirements for the provision of worker housing or a fee, and Snowmass Village has its own separate worker-housing program, Pitkin County imposes an impact fee on residential development for homes greater than 5,750 square feet and for nonresidential development, according to the consultants’ report.
The proposed new method of calculating the county’s impact fee would increase the fee from $38,903 currently to $277,062, according to a comparison provided in the consultants’ report.
However, whether local governments want to assess the full cost of providing worker housing — covering the entire “gap,” in other words — is another matter, McCabe acknowledged. Collecting sufficient funds to provide worker housing without imposing an overly onerous fee is a balancing act that he’ll leave up to elected officials.
McCabe said he will encourage county commissioners to adopt the new methodology for calculating an impact fee for housing; whether they choose to collect 100 percent of the subsidy necessary to provide housing or not is a separate discussion, he said.
“They could ratchet it down and still collect more than they do now,” he said. “It’s really at their discretion.”
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