Facts … not politics
The first casualty in the “blood sport” of Aspen politics is usually the facts. In honor of civil discourse, I would like to present the following facts.My proposed changes to the affordable housing program include:1. The city will offer a voluntary new deed restriction for owners of deed-restricted housing.2. This deed restriction will establish a new appreciation cap of 5 percent of the original value of the unit beginning Jan. 1, 2008.3. The capital improvement limit will be increased to 20 percent of the original cost of the home.4. The city will reserve the right to reduce the purchase price of any unit to future owners via “buy downs” of the appreciated sales price.Facts and mythsMyth: This proposal creates a “windfall” or “powerball lottery” for affordable housing owners.Fact: An extra 2 percent appreciation, or an average of $3,640 per unit per year, is hardly a windfall and merely represents a slight movement towards a fairer program.Myth: This plan will limit the number of future units the city can build.Fact: If the city decided to buy down the incremental appreciation for every unit in the city, and paid to finish another 100-plus units at Burlingame, it would still accumulate surplus cash in the housing fund in four years of $60 million and growing at $12 million per year (all figures taken directly from the city budget). Given current subsidy per unit levels (approximately $200,000), and even allowing for rising subsidy costs, this still equates to funding for hundreds of future units in addition to Burlingame. Does anyone believe for a second the city can possibly build that many units anywhere?Myth: These projections are the creation of Tim Semrau, and reflect today’s hot real estate market and unreasonable expectations in the future.Fact: All of my budget projections are from the city finance department calculations, which assume a 30 percent decrease in real estate tax revenues next year and a slight increase every year after. Historically the finance department estimates have been lower than actual.Myth: This program will reduce the opportunity for senior or rental units.Fact: The actual cash subsidy required for these possible projects is very small in comparison to the enormous surplus accumulating in the housing fund, so there will be more than enough funds to both build more senior units as needed, and to set aside a reserve for improvements to our rental properties.Myth: Our city government needs every penny of that money for future spending on housing.Fact: Without any allocation for future buy downs, the finance department estimates the housing fund surplus to be $137 million in 2016 after paying for everything currently planned for by the city, including 100 plus units at Burlingame.Myth: We need “a lot” of units to get to our housing goals.Truth: With static population growth and the completion of the final phase at Burlingame, we will be closer than ever to our housing goals per the Aspen Area Community Plan.Myth: All affordable unit owners have agreed to the city’s current policy of 3 percent appreciation or consumer price index, whatever is less. Fact: Many different deed restrictions exist in the city with wildly varying deed restrictions. Some have appreciation caps as high as 7 percent, and those owners will probably not voluntarily choose the new deed restriction.Myth: Owners of affordable housing agreed to their deed restriction and therefore must keep it the same for all time, no matter how conditions have changed in Aspen.Fact: As any attorney would know, agreements and contracts can be changed by both parties voluntarily agreeing at any time as circumstances change. We all have changed in the last 20 years; to consider a change to the housing program is only reasonable.Myth: If residents of affordable housing suffer from an appreciation rate that is unreasonably low in relation to their biggest life investment, they can move downvalley or somehow figure out how to buy a unit in Aspen if they don’t like it.Fact: The original intention of the affordable housing program was to provide starter homes for workers to get their foot in the Aspen Community and progress to better housing. Given the current desirability of Aspen and a mean home price over $5 million, and given downvalley home prices are starting to be out of reach, affordable housing has now become permanent housing for most people.Myth: The city will be prohibited from buying out Centennial.Fact: Per the county’s original agreement with the owners of Centennial, the city will have the opportunity to buy out 150 units 21 years after the death of the last county commissioner who approved it. Assuming normal life span, it will be over 30 years or 2037 before the current rental restrictions on these units is removed. Per the original approval, the rent is currently less than the maximum allowed due to market demand and is allowed to rise at Denver Consumer price index for probably the next three decades. To assume the city must spends tens of millions from the housing fund for an unknown possibility is unwarranted.Judge the facts for yourself and decide what is fair. The city easily has the funding to accomplish it’s housing goals, and reassess an aging program.Tim Semrau is a resident of Aspen and a candidate for Aspen mayor.