RO debate shifts to Burlingame
Aspen Times Staff Writer
Aspen shouldn’t shy away from RO housing at its Burlingame Ranch project despite the sticker shock a $1 million RO home at North 40 generated when it went on the market last week, according to one North 40 homeowner.
Local real estate broker Richie Cohen appeared before the Aspen City Council on Monday to urge council members to pursue a North 40-style development within Burlingame. Slapping a cap on the price of RO homes at Burlingame as a knee-jerk reaction to the headlines and raised eyebrows over the North 40 home would be a mistake, Cohen advised.
RO, or resident occupied, housing is the most expensive category of deed-restricted housing set aside for local workers. It was established for professionals who earn too much to qualify for the cheaper categories of deed-restricted housing but are priced out of Aspen’s free-market homes.
North 40, according to Cohen, is now home to workers in various professions and many families with children.
“It has come to life as a very vital part of Aspen,” he said. “You’ve got the whole cross section of the community … it is exactly what Aspen used to be.”
He compared the enclave to Aspen’s West End in years past, before escalating real estate prices turned the once-vibrant neighborhood into a collection of second homes that frequently sit empty.
North 40 is an all-RO project developed by landowner John McBride on about 20 acres next to the Airport Business Center. It includes 13 RO townhomes and 59 lots that he sold to qualified local workers who built their own homes there.
Cohen is one of them. He was ready to join the exodus of working residents who have purchased homes downvalley when the opportunity to buy a lot at North 40 and build a home for his family of four came up, he said.
Most of the lot buyers weren’t subject to any cap on the amount they could spend on their homes. The cost of the lot and the cost of construction established a base price for the residence; homeowners can accrue 4 percent appreciation per year.
That formula resulted in the $1,054,978 price of a North 40 home that recently went on the market, gaining distinction as the most expensive home ever to appear in the Aspen-Pitkin County Housing Authority’s weekly advertisement of employee housing for sale.
The $1 million home, within the context of an “affordable” housing program, immediately resulted in cringing among some council members. They suggested it might be wise to cap the cost of homes built on RO lots at Burlingame Ranch.
“Once you cap it, you lose a lot of incentive,” Cohen told the council. “I encourage you to think twice about capping RO units, and I encourage you to do something like this with at least a portion of Burlingame.”
Mayor Helen Klanderud is unconvinced.
“He [Cohen] made an interesting comment about that’s how the West End used to be. I don’t think he was talking pricewise, but he almost could be,” she said.
Klanderud said she hoped the North 40 home was a “fluke,” but housing officials report at least several homes there are in the $1 million range.
The city’s current plan for Burlingame calls for 35 RO lots, tentatively priced at $150,000 apiece. In all, the project could have as many as 330 homes – the vast majority in less expensive categories than RO.
Capping the price of RO houses at Burlingame is something the city needs to discuss, Klanderud said.
“I think we need to be very careful there,” she said.
Council member-elect Rachel Richards doesn’t want to see any RO housing at Burlingame.
“If I’m outvoted, if they end up being a part of Burlingame, absolutely there should be some caps,” she said.
Buyers should be welcome to exceed the cap if they want to, they just shouldn’t be able to recoup the excess when they sell the home, Richards added.
How much lot buyers spend on their homes shouldn’t matter, Cohen countered.
“What difference does it make?” he said. “You’ll have a few people who can spend a lot … most of the homes out here [at North 40] are a mix,” he said.
Cohen said he built the maximum square footage allowed on his $150,000 lot – about 3,500 square feet, including an 800-square-foot basement and 500-square-foot garage. The three-bedroom home will meet his family’s needs for the long term, he said.
“I’m not going to build shit for myself. You build as best you can,” Cohen said, though he declined to discuss how much the residence is worth.
“Let’s put it this way, I would get the same kinda headlines,” he said.
While North 40 was privately developed, Burlingame will be constructed on public land, which may make price caps on the RO units appropriate, said City Councilman Tim Semrau, a builder who has included RO units in his projects.
On the other hand, he wonders if local government should limit a resident’s ability to construct their dream home, considering it’s done at their risk and may help retain them as a member of the community for the rest of their lives.
“If they get carried away, it’s not a detriment to the program, except in the domain of public perception,” he said. “It’s a very tough call. The downside is the negative publicity. What most people don’t realize is, it’s strictly at the risk and expense of those individual homeowners.”
The city shouldn’t worry about how much RO lot buyers at Burlingame spend on their homes, agreed Shellie Roy, a Pitkin County commissioner and North 40 homeowner.
“I think it’s appropriate for people to take their own risks when they build their homes,” she said.
Roy purchased one of the $75,000 lots at North 40, which came with a price cap on home construction that the county had to raise when buyers found they couldn’t stay within the original budget and get a house built. Her module home will come close to the raised cap of $400,000, which includes the lot, the tap fee for water service and construction.
The deed restrictions on worker housing, requiring buyers to live and work full time in Pitkin County, will ultimately set a cap on the price of RO homes, she reasoned.
“What you create is a free market within a controlled environment,” she said.
The North 40 home may be a prime example. Just because it’s worth $1 million doesn’t mean it will fetch that price, local officials note. After a week on the market, it had yet to attract a single bid by yesterday morning, according to the Housing Authority.
“Maybe the free market will take care of it,” Klanderud said. “Just because it’s on the market for one million doesn’t mean they’ll get a million.”
[Janet Urquhart’s e-mail address is firstname.lastname@example.org]
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