One-time subsidies are shortsighted
September 5, 2012
Last week, our two local papers shared an argument put forth by a few who support adding new third-floor, free-market residential units in Aspen’s commercial core.
The justification for the third-floor residential includes these statements: “Free-market units usually pay for the project’s construction costs” and “It’s very difficult this day and age to do a project when you’re relying on retail and commercial businesses to finance the project.”
One elected official stated, “There are situations where businesses survive because top-floor units essentially subsidize the bottom-floor business.”
In essence, these folks are all saying, “We need to add an additional floor and sell it at a free-market residential price to fund the development.”
This is a one-time subsidy. The new penthouses are not funding redevelopment; they are a one-time subsidy. Adding a floor and selling at free-market residential prices is not repeatable over the long term. Imagine what Aspen would look like if prior generations had added a new top-floor penthouse every time a building owner wanted to subsidize redevelopment. If this model had been followed every 20 years since the incorporation of Aspen in 1881, we would have six-story buildings today and would now be looking to add the seventh floor.
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Let’s focus on healthier development patterns that are sustainable and a financing model that can be repeated for generations to come rather than handing out shortsighted, one-time subsidies.