Pilot inspection program considered for aging units in Aspen’s housing program

Aspen-Pitkin County Housing Authority attempting to get a handle on deteriorating properties prior to point of sale

The Aspen-Pitkin County Housing Authority board is considering a pilot program that would have a third-party inspector assess the condition of aging deed-restricted ownership units.

The details were presented at Wednesday’s APCHA board meeting, and include initially targeting 100 single-family units that are least 20 years old.

The goal is to understand the “breadth and depth of capital improvements that may be needed” in these types of units, of which there are at least 675 of them that are 20 years old, according to Diane Foster, interim executive director of APCHA and assistant city manager.

“The intent of this program in particular is simply to look, not do any mitigation, but to put a box around what’s the problem,” she said.

The proposal is in response to a decades-old quandary that affordable housing officials in the upper valley have been dealing with in trying to ensure that when any of the 1,600 ownership units in the taxpayer-subsidized program is sold that basic upkeep of the property has been maintained.

What officials have seen over the years is that homeowners let their properties fall into disarray, pushing maintenance and repairs to the next buyer.

Because there is up to a 3% annual resale cap on for-sale units and limits to how much a homeowner can get back from their investments into a unit, some owners are not motivated to keep their property in good condition.

The demand for affordable housing is so high that entering the lottery to buy a unit can attract as many as 100 people, so there is nearly always someone who is willing to purchase less-than-desirable properties.

The pilot inspection program is designed to provide qualitative information to the board to make future policy decisions on seller requirements within the APCHA inventory.

As proposed under the voluntary program, APCHA would hire several inspectors for owners to choose from.

The agency would pay an estimated $400 per inspection for a property to be assessed.

“It’s highly dependent on people wanting to do it,” Foster said.

The estimated cost for this year is $40,000 that would be paid for out of the existing APCHA budget.

If deemed successful, another 300 to 500 inspections could take place next year at an estimated cost of between $120,000 and $200,000.

That would require a request of funding from Pitkin County commissioners and the Aspen City Council.

The target audiences for this program include owners in the process of selling their units, as well as owners who are not selling but want to make a life and safety capital improvements to their property.

If a current owner wanted to make that kind of improvement and they had exhausted their capital reserve budget under a current deed restriction, they could sign a new deed restriction that would allow a new capital reserve allowance, according to housing officials.

Most units have their own unique deed restriction rules that give APCHA limited authority to force owners to maintain their properties.

Some deed restrictions do not allow any capital improvements, while others allow capital improvements in the amount of 10% of the original purchase price, or 10% of the purchase price when that owner bought the unit, or 50% of their purchase price.

The deed restrictions since around 2000 allow for an owner to go above the 10% cap as long as they can provide proof that it is a health and safety item, or helps in water or energy conservation, according to housing officials.

Board members were limited to clarifying questions during Wednesday’s meeting and asked to email feedback to APCHA staff, and it will be presented April 21.

It will be at that board meeting that staff would like to get direction on whether to put the program into place.

“It’s going to take us months to (set) up a pilot inspection program, just to assess,” Foster said. “I think it would actually take much longer for an actual capital improvement program, and this board has made it really clear that you very much believe in, as do the staff, public input and public involvement and that would take a long time as well.”

APCHA staff also is asking board members to engage in a straw-man proposal to see where they land around changing policy to require sellers to have certain standards be met on their properties before they can be listed.

It’s designed to be used as a framework and a draft solution the board can use as a foundation from which to make changes, Foster said.

There are certain assumptions around the issue that the board recognizes, such as units being sold should not be allowed to be handed over in cost-burdened disrepair to the buyer, and that this would be is a significant change to the APCHA program.

They also are operating under the assumption that maintenance of the unit prior to sale should be a requirement, and without changes to the APCHA regulations, the problem will persist.