Bill Stirling: Guest opinion
Aspen, CO, Colorado
I was serving as mayor in 1990, when the original accessory dwelling unit ordinance was made law. It happened during the winter of 1989-90, simultaneously over a four-month period in two elections and the passage by council during that period of specific ordinances.
The proposed ballot issues: a 1 percent housing/day care real estate transfer tax, the fate of the Ritz-Carlton Hotel (now the St. Regis), the fur ban and the ballot issue to recall the mayor and three other council members were all before the voters in the winter of 1990. It was an intense time.
The accessory dwelling unit program was a practical way for the city and the private sector to work together to generate “in-town” affordable housing and maintain an in-town employee base. The new housing tax passed in 1990 gave the city a treasure chest of funds. Those affordable-housing proposals were very contentious at that time.
In 1990, the City Council and planning staff had hoped the concept would be used by the majority of owners to house people working in Pitkin County. We did not set any monthly rent restrictions, nor did we require that the units be occupied. We did not want “Big Brother” looking over resident shoulders.
We hoped that at least 50 percent of the units would still be used appropriately, like caretaker apartments, and add to the free-market affordable-housing pool. We have now learned over the previous 22 years that the actual occupancy is less than 25 or 30 percent. In retrospect, it might have been naïve or unrealistic for us not to have made the program mandatory.
Essentially the new ordinance being proposed will eliminate the voluntary-occupancy units as an affordable-mitigation option. All things considered, I understand that our 1990 accessory-dwelling-unit concept fell short of the occupancy we had all hoped for.
I have always viewed our evolving affordable-housing program as a joint private and public venture. I do not believe it was ever intended that a residential owner would contribute 100 percent of however many employees might be generated by residential expansion or new development. The accessory dwelling unit and cash-in-lieu programs were creative ways for the private and public sectors to work in harmony to solve a critical community need.
More important than reinventing the program is the next proposed change, which basically triples the existing cash-in-lieu contribution for housing mitigation. A new residential purchaser pays a 1.5 percent housing and day care/Wheeler Opera House Real Estate Transfer Tax upon closing a residential sale, which today can be $50,000 to $60,000.
When that residential purchaser prepares to build or remodel, then comes the next community contribution, which is the housing-mitigation fee, related to whether it is new construction, a tear-down historic preservation or a remodel. For example, the cash-in-lieu fee on a 6,000-square-foot West End lot for new construction now averages around $224,000. So before the property owner even strikes the first nail, the fees at the real-estate closing and upon application to build are almost $275,000. It contributes to the well-being of the town, and it does not try to mitigate 100 percent of the affordable housing to be produced.
However, I believe tripling the current cash-in-lieu fee is onerous, even usurious. We slowly are creeping out of the widest and deepest economic regression since the Great Depression, and we are not actually back to a robust economy yet. Already, the first two months of sales in Aspen are below 2013.
The council has to take great care to maintain a balance. I believe the council has already seen the wisdom of removing smaller remodels from this proposed trebling of the fee. Under the proposed ordinance, it would have cost an average of $212,000 for the housing cash-in-lieu fee for a 1,000-square-foot addition, before the remodel itself begins. Eliminating this cash-in-lieu fee for remodeling below a certain number of square feet seems fair and reasonable for locals trying to accommodate more family, adding value to their homes or upgrading for personal reasons.
However, the proposed trebling of the cash-in-lieu fee for a 6,000 square-foot West End lot for new construction would jump from $224,000 to $686,000. In my view, this is wrong for many reasons.
First, it just puts too much of a burden on the residential owner to pay for housing mitigation. Second, it will slow the purchase of in-town lots to a snail’s pace and push more development into the county. This means less collection for the Wheeler and housing real estate transfer taxes. Third, though it will not affect a landmarked Victorian restoration project, it would, however, fully burden the new lot created in a Victorian lot split. Perhaps, such a new historic-lot split should be exempted as well.
Aspen is both a resort and a town. In my view, the best places to visit and live in the world are places that are both resorts and towns. Over time, Aspen has done well in the delicate weighing of the wants and needs of each sector. We would have no jobs without the resort. We would have no visitors without the myriad of resort amenities. It is wonderfully synergistic.
Our ambitious affordable-housing program still has made a place in our resort town for almost 40 percent of the work force to offset the downvalley migration of locals in the face of rising real estate prices. This is what I would call a healthy balance of town and resort.
I would strongly urge the council to adopt an 11 percent inclusionary requirement, as described on page 3, No. c, in the Dec. 10 Chris Bendon memo to the City Council, which matches the current cash-in-lieu rates.
If the council overreaches, it is clear that it will not benefit
the affordable-housing program because very few will buy or build, and no contributions will be made to the affordable-housing program at all from residential building. We must honestly ponder if we need more affordable housing at any one time. We want a robust housing program, but it is always essential to be careful to keep the resort and the town in balance.
Over the past four decades, the people have taken responsibility for the future of the community with enlightened, balanced political leadership. Let’s stay on that course, and let’s urge the Aspen City Council not to overwhelm residential property owners with indefensible high-fee increases for affordable housing.
In this way, all sectors, private and public, continue to pay a fair share towards the vital affordable-housing projects.