Official says there’s price gap in housing
December 4, 2013
How the city of Aspen builds, sells and subsidizes duplex homes for Phase II of Burlingame Ranch will be largely based on the demand for affordable housing in the $750,000 price range.
At Monday's Aspen City Council meeting, council member Adam Frisch said there's a gap in the housing program, where dual-income families make too much money to qualify for the upper-category units but can't afford the million-dollar homes on the free market.
"There's a big, missing product," said Eric Cohen, who represents one of two families interested in moving into a Burlingame II duplex.
The city will build six single-family units at Burlingame II, four of which will be offered as 2,200-square-foot half duplexes with garages. The council has been presented with two different approaches for building those duplexes. The first gives the city control over design and construction, while the second gives the buyer control. If the city were to build the units, raw estimates show a price tag in excess of $1 million to the buyer.
Cohen said that price tag is illogical, given the fact that 3,000-square-foot homes have been sold for around $1 million at North Forty.
"This product at over a million dollars doesn't make sense," Cohen said, adding that the million-dollar amount stretches people to their borrowing limit.
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Cohen said that if he were to build the duplex on his own, based on the city's affordable-housing lot prices, he could make his $750,000 price range work.
Assistant city manager Barry Crook wasn't convinced, citing issues that arose during Burlingame I, when buyers were given the freedom to build their own homes. In some instances, the buyer couldn't afford what they had planned, so they ended up asking the city for further subsidy. The city paid out $344,000 to Category 6 lot owners and $189,500 to resident-occupied lot owners.
On Monday, the council leaned toward the city-built-duplex model. Council member Art Daily said he was hesitant to put the city anywhere near the position it was in during Burlingame I.
"City-built is the safest course," he said.
Council member Dwayne Romero estimated construction at $250 per foot, which coupled with the lot price, would cost the builder more than $1 million. Letting homeowners build the duplex, he said, would be a return to the problems met in Phase I.
"That would demonstrate we haven't learned our lesson," he said.
Crook said Cohen and the other prospective buyer want to move forward with construction this summer, with a possible move-in date a year from now.
Mayor Steve Skadron said council still needs to figure out what the demand is for the $750,000 price range and what subsidy is required.
"I'm fairly confident there's going to be a fair amount of demand coming out from people who want this product at that $750,000 price," Frisch said.