New council, same outcome?
Would the Aspen City Council’s narrow approval of new rules for affordable housing development this week have played out any differently with newly elected council members on board? No.
Although they won’t be seated on the council until June 14, councilmen-elect Tom McCabe and Tony Hershey kept each other company in adjoining seats in the audience at Monday’s council meeting. But their thoughts on the subject of Resident Occupied affordable housing weren’t close at all.
Those who are looking for an immediate shakeup at City Hall when the two men take their council posts next month may be disappointed. Had they been casting votes Monday, it appears the new rules on housing would still have squeaked through on a 3-2 vote.
On Monday, the council approved 1999 housing guidelines that place a $425,000 cap on the sales price of a Resident Occupied (RO) unit; set a household income/asset maximum of $600,000 for RO buyers; and establish an average sales price of $170,000 per unit for future affordable housing projects.
Mayor John Bennett will be stepping down, but McCabe said he would have voted to approve the guidelines for many of the same reasons Bennett did.
“All in all, considering now how far the two sides were apart, I think a good compromise was reached,” McCabe said. “We can review it, if it turns out too high or too low … But I’d like to give it a chance to see if it works.”
And, just as outgoing Councilman Jake Vickery voted against the new guidelines, Hershey said he would have done the same. He said he believes the new regulations on RO units will drive the private sector out of affordable housing development.
“I’d say it’s better to have higher-priced units than nothing at all,” Hershey said. “I think we should listen to people who are the experts and have been doing this and if they say they can’t, I say listen to them.”
In the course of Monday’s discussion, Bennett framed the context of affordable housing in Aspen as “an incredibly limited resource with absolutely unlimited demand.
“We have to draw a line somewhere and wherever we do, someone will be excluded. The reality is that we’ll never be able to build housing for everyone who wants to live here,” Bennett said.
“So in the allocation, there should be an account of the need of the community,” he continued. “There is only a certain number of units that is ever going to be built in Aspen’s history.”
For every pricey RO unit that’s built, Bennett argued, a needed lower-priced home is not getting developed.
Both Bennett and Mayor-elect Rachel Richards argued that requiring an average price of $170,000 for the affordable housing component of a project is the only way to ensure that units with a broad mix of sale prices will be developed. `I’ve given up’ But Tim Semrau, a local designer/builder who developed two recent affordable housing projects, contends that the newly adopted average sales price will nail the coffin shut on private sector involvement in affordable housing.
“The RO price cap is 100 percent irrelevant. It’s the $170,000 average that will eliminate RO, and without RO, it’s not financially possible,” Semrau said. “Everyone else has already given up. [Tom] Stevens, [Ted] Guy, [David] Guthrie – they gave up yesterday. Today, I’ve given up.”
Semrau’s most recent project, Alpine Cottages, includes four free-market units, four RO units, one Category 4 unit and five Category 3 units. Housing in categories 1-4 is the least expensive of the affordable housing options, with Category 1 units selling for the lowest price. The maximum Category 4 unit price is $219,000. The Alpine Cottages RO units are priced at $550,000.
With an $8 million initial investment, and if nothing goes wrong, Semrau said he expects a 9 percent annual return over three years, with a 27 percent total return on his investment. He maintains that under the new guidelines, the annual return would shrink to 2 percent.
But Jim Curtis, project manager for planned seasonal housing at Burlingame Ranch and a consultant on a separate 225-unit Burlingame project, isn’t convinced that the new guidelines spell the death knell for private affordable housing development.
“I haven’t run the numbers yet, but I still plan to do affordable housing in the future and feel hopeful that it can be done,” Curtis said. “We’re not going to keep building and building. There are `X’ number of affordable units that will be built, the pot’s not endless.
“So the question that needs to be asked is, how important is it to the community to make those units attainable to more than the upper strata? How do we want to allocate those chips?”
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