How would pacing control affect a home’s value?
January 26, 2007
ASPEN As Aspen’s City Council begins discussions about pacing construction within the city, some homeowners are concerned that limiting the number of “scrape and replace” projects for residential homes could seriously affect their ability to sell.Although the council has made no formal decision on how many projects could take place concurrently – or whether to pace residential redevelopment at all – a draft of a new code on pacing suggests allowing a total of 28 or 14 residential reservations annually within the city, depending on a 2 percent or 1 percent growth rate, respectively.It also outlines options for parceling those allotments out by neighborhood or offering them as one block for the city as a whole.At a council work session Tuesday night, attorney Gideon Kaufman raised the issue of how such pacing would affect some of Aspen’s longest-standing homeowners.Many people, who bought homes in the ’70s, built their homes on shoestring budgets, he told the council, and the homes weren’t built to last.Now, 30 years later, the homes might be those families’ largest financial assets, their only reserves for retirement, helping send kids to college or securing a future for their families.Kaufman argued that any regulations that could stall the building permit process by years could lower the value of those homes or make them less desirable to buyers.”The bottom line is, if you’re in your 80s, you don’t have a lot of time,” he said.Longtime Aspen Realtor Perry Harvey agreed a pacing mechanism could be detrimental to people who own older homes.Harvey, father of outgoing Aspen Times Editor Allyn Harvey, was a real estate agent and developer in Aspen in from 1972 to 2001 and chaired the city’s Planning and Zoning commission for three years.If a buyer is considering a 1970s home versus a much younger home, he said, there’s no doubt they’ll want to tear down the older home and replace it.If a buyer thinks he or she might have to wait to rebuild, it “might drive those buyers to new construction or to homes that don’t need improvements,” he said. “If I’m going to have insecurity about what I can do with this home, if it’s going to take me three and a half years, then I’ll say, ‘the Hell with it.’ It could create a real disparity that way.”Council members Jack Johnson and Jasmine Tygre don’t necessarily agree. While both say they want to hear more public comment before making a decision about any new regulations, they’re not convinced pacing regulations would negatively affect the value of the homes or the owner’s ability to sell.Tygre disagreed with the assumption that only the older homes would be tear downs. The trend, she said, is that even homes that are only several years old are being torn down and replaced – or significantly remodeled, which also can contribute to construction traffic, noise and dust.”People who spend that much money … want to personalize their houses,” she said. “The trend is even more elaborate or more luxurious.””Nothing has ever slowed the increase in property values in this town that I’ve ever heard,” Johnson said. “In fact, if you were buying into a town where there was a limit on the pace of construction, wouldn’t that increase the values?”Harvey agreed home values have skyrocketed in Aspen since the 1970s – and even since the ’80s and ’90s, but nonetheless, pacing regulations could mean an owner doesn’t make as much as he or she could without the regulations, he said.Harvey also said he couldn’t buy a hypothetical argument that said those homeowners were already making enough money, so it doesn’t matter if pacing regulations means they will only make $2.5 million instead of $3 million.”It would be cavalier if people said, ‘you’re making a ton of money. So what if you’ll make a little less,'” he said.In his opinion, the real problem is new buyers will be swayed not to buy the older homes at all.”It’s going to reduce the number of potential buyers,” he said. “I’d be worried if I had one of those houses.”Harvey agreed with Johnson that the wording of an anonymous flier that’s been circulating since Tuesday might be “alarmist,” but, he said, “that’s Aspen. They’ve always done things like that.””It sounds somewhat premature, but my experience is if you don’t get involved in those discussions from the get-go, things tend to get done without that input,” he said.At Monday’s meeting, Mayor Helen Klanderud was sympathetic to the plight of Aspen’s longterm residents, who she said are part of the character of the town, and she’d like to see the issue of residential pacing resolved as soon as possible to give them some peace of mind.Johnson and Tygre agreed that as long as the pacing controls were uniform across the town and all homes were affected equally, then no one home would be more attractive than another.Tygre said all options are still on the table for the council. They could consider exempting some properties from pacing control or not include residential at all. They are merely at the discussion point and are still gathering input.”More information is never a bad thing,” she said.Abigail Eagye’s e-mail address is email@example.com