Razing homes and adding jobs
August 17, 2007
From Aspen to New Castle, business and government are in crisis. They have no home for their most valuable asset people.As real estate prices continue to escalate and whats left of remaining land is gobbled up, hundreds of workers are being squeezed out of the Roaring Fork Valley.An increasing number of housekeepers, cooks and other workers who support Aspens resort economy are bused up Highway 82 every day from Rifle, Silt and New Castle to work for as little as $12 an hour. Many working professionals found footholds in Aspen and the midvalley when those places were still affordable, and many of these people remain. But their homes will almost certainly be out of financial reach for the next generation.For newcomers, its nearly impossible to get a roof over their heads for a ski season, let alone year-round.
Theres only so much supply for this kind of demand, said Tom McCabe, executive director of the city and countys housing program, who added that the average median home price in Aspen is $5.25 million.The average home price jumping $1 million in one year is just astonishing, McCabe said. When you look at that reality its really clear what our challenge is.The housing crunch is as much of an economic issue as it is a social one, say elected leaders who face the daunting task of solving the problem.If I came to Aspen today, I wouldnt get in the door, said Aspen Mayor Mick Ireland, who now lives in deed-restricted housing but bounced around for years when he first came to Aspen in the 1980s while working as a dishwasher and doing other menial jobs.
Back then, there were plenty of houses and apartments available for rent, and buying real estate was within reach. Over the past two decades, however, as Aspen real estate has become more of an investment for the rich, properties have been knocked down and replaced with second homes. These investment properties have two important, and conflicting, characteristics: They house no full-time residents, but they require several workers to maintain them.Aspens success and desirability have created something of a perfect storm: In the past four years, 600 homes have been razed and just last year alone, 700 new jobs were created in Pitkin County most of them within the city limits, according to Ireland. Whats also contributing to the growing crisis is the crackdown on illegal immigration and as a result, fewer undocumented people are available to work. That is all coming to bear now, he said. These things become gradually more apparent.
The homes lost in Aspen were once occupied by working families. They are now second homes, and the property tax bills are sent to individuals living out of state.We have a whole wave of people who work and live in free market [homes] who are getting to retirement age, Ireland said. As they sell the homes they bought in the 60s, 70s and 80s, they become second homes and they are housing fewer people.A map that hangs on the wall in Irelands City Hall office shows the neighborhoods that have succumbed to the latest trend Cemetery Lane, Mountain Valley and the East End.Longtime local Carole Hershey recently sold her home on Cemetery Lane and moved to Glenwood Springs. Her son, Tony, who grew up in Aspen and is a former city councilman, couldnt afford to buy it and now lives in Glenwood too.My generation could never buy the house they grew up in, Tony said. I dont have one friend who still lives up there … The only person still up there is my father because hes buried there … he bought a plot, he thought ahead.
Many of the owners of those homes also relied on renters to help pay the mortgage. But most of todays second-home owners choose not to rent, so not only are those homes unavailable for worker bees, theyre unavailable for seasonal influxes of people like the hundreds who come for the Aspen Music Festival and School.Years ago, the West End neighborhood housed a majority of the festivals faculty members. But no longer the housing shortage cost the organization hundreds of thousands of dollars this year, said Aspen Music Festival President Alan Fletcher.The market has changed so much, Fletcher said. Those people who were happy to rent a two-bedroom condo for faculty, now its not worth it.The music festival must house 1,130 people in the summer, the majority of which are students. Sixty percent of them live in the Marolt Ranch seasonal housing. But finding housing for the 130 visiting faculty members, 100 guest artists and 150 seasonal staff members is proving more difficult each year, Fletcher said.Housing is our biggest problem, he said.
Last week the Aspen City Council rejected an 80-room hotel proposal at the base of Aspen Mountain. From the debate it was apparent that elected officials or at least a majority of the City Council feel the town cant accommodate more workers without providing the same number of housing units.There have been a lot of approvals of projects that house some fraction of their employees, Ireland said. In the old days, that was not as critical.The city code mandates that developers provide housing for 60 percent of the employees theyll need, but Ireland and some of his colleagues believe the percentage must be higher. And the government cant keep up the pace by building more deed-restricted housing. The citys Burlingame Ranch project, which will offer 236 units when its completed, is the last piece of land for a development that size.We have to slow down the excess job generation, Ireland said. If we are creating 700 jobs a year, it would take a Burlingame a year to meet the need.
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When Ireland explained to developers why he voted against the hotel proposal, he told them the days are over when employees who work in Aspen can live downvalley.You cant say its OK, well put them in Basalt. Its over. Carbondale is over, Ireland said. Were full.The mayors of downvalley cities are facing similar issues, which create new sets of problems for them.Carbondale where the median home price is now $1 million cant house its own workers at this point, said Mayor Michael Hassig, who remembers sitting in meetings 10 years ago discussing the same issue.Its impossible [to house workers], he said. This was an issue apparent to people 15-20 years ago but its only in the last three years that the reality has hit home with people.That reality has certainly hit home in Glenwood Springs, which is built out and getting increasingly more expensive. The average home price there is approaching $500,000.The party is over in Glenwood, Ireland said.
Glenwood used to be the stopping point for workers who commute to Aspen but theyve been priced out and are now living along the I-70 corridor. If they do live in Glenwood Springs, its five people and their families in one house, said Glenwood Springs Mayor Bruce Christensen.We are really feeling the stress, he said. Demand will continue to grow and supply will remain. Well start seeing knock-downs like whats happening up there.Rifle is experiencing an unprecedented rate of growth, not only because it serves as home to many of the Roaring Fork Valleys workers but because of the booming oil and gas industry. It used to be that Rifle was the hub for affordable housing but that changed about four years ago when the economy spiked. Within 10 years, there will be 4,200 apartments, condos and homes built, said Rifle Mayor Keith Lambert.And once again, the demand has increased property values to a point that single-family homes are nearly out of reach for the average worker, Lambert said. The median price of a home hovers between $280,000 and $350,000, he added, and monthly rents command between $850 and $1,200.We have less than a 1 percent vacancy rate, Lambert said, adding Rifle is the largest municipality in Garfield County, with 9,000 residents.
Upper valley employers are competing for workers who are finding ample work opportunities along the I-70 corridor in the oil and gas industry. Hundreds of jobs sit unfilled in the Roaring Fork Valley for months, and in some cases, years. Its no longer an Aspen problem, said Christensen, adding that the Glenwood Springs parks and recreation director position has been open for two years.They cant afford to live here, he said. We dont have jobs that can support a $500,000 house … we cant even fill the professional jobs.In Aspen, where customer service and front-line employees are critical to the resort, its a challenge to maintain a high level of service, said Debbie Braun, president of the Aspen Chamber Resort Association.If you can get anyone in your door to work, how can you raise the bar on customer service? Braun asked. It makes me think I am spinning my wheels.Employers often find themselves lowering their standards just to get help.Will you take a warm body or a qualified employee? Braun asked. We need them the most, yet we are not providing them housing or paying enough in wages.Warren Klug, the general manager at Aspen Square, said hes had a reservations position open for months.Weve had some people living in New Castle, who work at Aspen Square, Klug said, adding its hard to compete with Rifle for employees. The jobs are opening up there.Perhaps the industry most affected is hospitality, where housekeepers are realizing that they can earn a living without having to commute hundreds of miles per week into Aspen. As a result, hotels like the St. Regis must engage in bidding wars with other employers to get workers.Payroll budgets have certainly increased and will continue to. Senih Geray, the general manager at the St. Regis, said the hotel was recently upgraded to a tier one hotel by its corporate office, based on the cost of living index. That allows him to pay his employees more. When Geray goes through a budget review this fall with the St. Regis parent company, Starwood Hotels & Resorts, affordable housing will be the No. 1 topic.In a couple of years, its going to be even harder to recruit people, Geray said. So far weve been able to do business at those levels [of pay] but in a couple of years that might not be possible.The Aspen Skiing Co. has thrown millions of dollars at the housing problem, not only in land purchases for affordable housing, but in recruitment efforts and pay increases, said Skico CEO Mike Kaplan. And its only going to get worse as demographics change, he added.We have over 300 employees who have worked with the company over 20 years and theyll be retiring in another 10 or 15 years, Kaplan said. They are living in free-market homes that the next generation wont be able to afford.The Skico relies heavily on seasonal housing and fewer short-term options remain as old buildings are knocked down and replaced by mutli-million dollar properties.
Skico has attempted to tackle the problem by taking matters into its own hands. The company currently as 300 beds in its housing inventory excluding the recently purchased Sopris View apartment complex, which has 62 two-bedroom units in El Jebel. Over the last several years, Skico has spent more than $40 million on employee housing in the Roaring Fork Valley, according to Kaplan. Right now, the company houses about 15 percent of its workforce but Kaplan eventually hopes to have 1,200 beds in the pool.Klug said hes been able to retain employees at Aspen Square, which employs 55 people, because it has seven employee apartments in town.Ireland said the time has come when employers are going to have to buck up and provide housing for their employees instead of relying on the government to do it.The onus is on everybody, he said. The government cant solve it.The St. Regis, the Aspen Music Festival and other large employers like the Roaring Fork Transit Authority all say they are committed to buying property to house their workers. But where and how much it will cost is unknown. Officials acknowledge the ugly reality is that there isnt enough land or money to fully address the growing crisis. Mayors from Aspen to Grand Junction meet every two months and the first topic of conversation is affordable housing.Theres nowhere to do it, theres not enough money to do it and theres not enough political will to do it, Ireland said.Aspen and Pitkin County have worked diligently over the past 20 years to build affordable housing, with the support of the voters. As a result, there are 2,700-plus units dedicated to local employees for either rental or ownership. That houses about 50 percent of the local workforce but it doesnt reach the community goal of 60 percent. Still, said housing director McCabe, the program has served as a model for other resort communities.We should be proud of the fact that the city and county started in the 70s, but that doesnt mean we should be complacent, he said.Carbondales Hassig said there are more challenges than there were 20 years ago.People like to bash Aspen but no one has a program that compares, he said. And its hard to build political support for housing when most voters are, by definition, people whose housing needs are met. If you are here, youve got yours.Christensen agrees, saying that affordable housing projects have been shot down in Glenwood Springs for the same reason. Hassig said the solution is more inclusionary zoning, finding more mechanisms to pay for housing and converting old properties like trailer parks. But none of those alone or together are going to completely solve the problem.You cant build your way out of this, he said. We can bitch about it but I cant say there is one thing that will solve it.Ireland admits building more isnt the solution, as each affordable housing unit costs between $50,000 and $100,000 just for the land before sticks are put to brick.That has been one of Carbondales biggest challenges.Its staggering, Hassig said. We are punch-drunk about how much it costs to build these projects.Ireland said the key is to slow down excess job generation, add infill housing where possible and improve the transportation system so the commute is more bearable.Clearly you are going to continue importing the workforce, he said.For Christensen, the housing crisis today will shape the future of not only his city but the entire valley and beyond. He thinks that by the government building more rentals and providing down payment help for homeowners, a dent can be made.Im hoping the downvalley communities can do something about this because the character of these towns are changing, he said.Carolyn Sackariasons e-mail address is firstname.lastname@example.org.