Aspen’s affordable housing authority looks at increasing user fees | AspenTimes.com

Aspen’s affordable housing authority looks at increasing user fees

As it gets more expensive to manage the 3,000 deed-restricted units within the local affordable housing authority, officials are considering raising fees for those who participate in the program.

Mike Kosdrosky, executive director of the Aspen-Pitkin County Housing Authority, proposed to the board on Wednesday a fee structure that would bring in an estimated $162,422 more in revenue each year.

The city and county split the subsidy to cover APCHA's operational costs. Kosdrosky explained that subsidy is expected to increase significantly in 2020 and beyond.

This year, the subsidy is $640,700, which is about 28 percent of APCHA's operating revenue. Kosdrosky estimates that will grow 24 percent in 2019 and 47 percent in 2020.

That's due mostly to APCHA's investment in a new internal management system. It will allow APCHA to monitor and manage the housing inventory more effectively. Currently, APCHA's dated system is paper-based. The cost for the management system is budgeted at $1.4 million.

To close the funding gap on APCHA's annual budget and to cover the cost of administering the program, fee increases are needed, according to Kosdrosky.

Recommended Stories For You

"In staff's opinion, APCHA should seek to recover as much of these costs as possible through appropriate and realistic fees, while keeping them low as possible to encourage applicants," he wrote in a memo to the APCHA board.

In 2017, APCHA processed 1,401 applications for ownership, rental and seasonal units, with an average of $32 collected per person.

"The average cost of servicing and processing each application, however, is significantly higher than $32 when considering all of APCHA's fixed and variable costs," Kosdrosky wrote.

Most of APCHA's fees have remained constant over time, except in 2011 and 2012 when rental and sales application fees were increased.

Revenue from fees generate around $350,000 annually. With the proposed fee hikes, that could be as much as $516,000 or more.

The biggest revenue generator for APCHA is the 2 percent fee on the sale of deed-restricted homes. This year, APCHA estimates that it will collect about $250,000 in fees from re-sales and about $170,000 in new home sales.

Kosdrosky and the APCHA staff are proposing to increase that fee to 3 percent, which would generate about $100,000 more each year.

Some board members said they would consider raising it even more.

Board member Ron Erickson said he favors increasing the sales fee rather than the smaller ones.

"Rather than nickel and dime people, let's focus on the biggest bang for the buck," he said.

Other fee hikes proposed include raising the ownership application fee from $50 to $100, the requalification for renters from $35 to $50 and the listing fee from $600 to $1,000.

APCHA staff also is proposing two new fees: a leave of absence and emergency worker referral charge.

APCHA receives between 15 and 20 leave of absence requests a year and doesn't charge for the service. The emergency worker fee would be charged back to any agency or department head involved in making the request. Each would be $50.

Board member Dallas Blaney suggested that a new fee be placed on the buyer, a transaction fee of sorts.

In 2019, 39 percent of APCHA's administrative expenditures are expected to be recovered through fees, according to Kosdrosky. The remaining expenditures are subsidized by tax dollars.

He said APCHA's budget shortfall will continue to be a growing burden on local governments but elected officials have in the past preferred subsidizing the program rather than raise fees.

Board member Valerie Forbes asked if raising the 3 percent fee would hurt homeowners since their appreciation cap is 3 percent, or whatever the Consumer Price Index is at the time of the sale — whichever is lower.

Kosdrosky said that is a valid concern and the board should start thinking about reworking the appreciation cap.

"I do think we have to evaluate our appreciation structure," he said, adding that there are so many different deed restrictions on units that they all follow different rules in APCHA's guidelines. "There is an opportunity to standardize the program by having the homeowner get the new appreciation cap if they sign a new deed restriction."

He also noted that the CPI has been applied eight out of the past 10 years, which hasn't favored homeowners selling their units.

csackariason@aspentimes.com

Start a dialogue, stay on topic and be civil.
If you don't follow the rules, your comment may be deleted.