Second-home owners trying to escape housing restriction
ASPEN ” Two second-home owners are attempting to buy their way out of having a local worker live on their property in Aspen, which is required by law.
Through attorney Herb Klein, Larry and Mara Lawrence recently offered $380,000 to the city government toward the affordable housing program instead of housing a Pitkin County employee in the unit attached to their home, located at 985 King St.
The settlement offer came after Pitkin County District Court Judge Denise Lynch last month denied the Lawrences’ motion to dismiss a lawsuit levied against them by the Aspen-Pitkin County Housing Authority (APCHA).
The lawsuit came after the housing authority learned in 2007 that the Lawrences were not leasing the deed-restricted unit and sent them a notice of violation at their La Jolla, Calif., home. After no response, the authority sued last December.
Klein declined to comment on the settlement offer, but the Aspen attorney described Judge Lynch’s recent ruling as a victory because he and his clients still had an opportunity to argue their case in court.
City Attorney John Worcester declined to comment on the settlement offer as well, saying he will present it to the Aspen City Council in executive session to get direction on whether to accept the cash.
In the eyes of APCHA officials, however, the Lawrences’ offer is too low based on the land-use code, which dictates the rules governing deed-restricted units.
Housing officials say the land-use code puts the payment-in-lieu fee at $720,869.
APCHA officials said they would rather see an employee living in the unit rather than be “bought out,” but it is up to the council to decide that.
Tom Smith, APCHA’s attorney, said the housing board will likely be asked to weigh in on the matter.
“Ultimately, it’s up to the council,” he said. “The housing authority is a party in the case and so is the city but the housing authority is sort of the enforcement arm of the city.”
Housing board member Ron Erickson declined to comment specifically on the Lawrence case but said he believes in the affordable housing program’s mission, which is to house local workers and address the massive housing shortage in Aspen.
“I am a firm believer in people living up to their contractual obligations and if they don’t, since we live in the West, hang ’em high,” he said. “Who ever developed this property received benefits and they should uphold the deed restrictions on it.”
At issue is whether the Lawrences have a right to use the unit for their own personal use ” in this case a home entertainment center ” or house a local employee, per the agreement by the developer and the city government when the property on the Astor subdivision was originally developed in 1980.
At the time, the developer agreed that three of the six units would be subject to deed restrictions in return for the city to exempt the property from its growth restrictions.
The developer agreed then to designate the unit, now owned by the Lawrences, to be occupied by low-, moderate- and middle-income individuals.
Two other deed restrictions were placed on the property before the Lawrences purchased it in 1996 for $1.8 million.
Klein is arguing the housing office has no authority to impose rent controls under Colorado’s anti-rent control statute. He told the Times in June that he believes there’s still merit to that argument and will make the case in court.
In her ruling, Judge Lynch disagreed with Klein’s argument because the subdivision agreement was executed in 1980, one year before the state’s anti-rent control statute was enacted.
Worcester has called the June ruling a “huge victory for the city and the affordable housing program.”
The deed restriction was not unilaterally imposed by a government but was rather entered into voluntarily by the developer, therefore the rent controls are not precluded by the statute, city and housing officials argue.
The court’s decision will likely have implications on more than a half-dozen active lawsuits filed by the housing authority against other property owners who are allegedly violating deed restrictions.
“The judge’s decision put us in a strong position legally and I think we will come out victorious,” Erickson said.
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