Condo operators: 2A wrong solution
Dear City of Aspen Voters,
On the November ballot, measure 2A asks Aspen voters to decide on a new “STR tax.” As condominium operators, we write to you today to share why 2A is the wrong solution for a valid problem.
The 2A ballot question came from discussions to determine if short-term rentals are degrading our community, creating more jobs that are not supported by employee housing or city infrastructure. We recognize the root issues are valid — Aspen is busy, and housing is scarce — but 2A unfairly targets condominium properties and will have catastrophic, unintended consequences.
2A proposes a 5% tax on condo-hotel properties (like The Gant and Aspen Square), and a 10% tax on all other STRs, including condominiums that have been operating as part of Aspen’s traditional lodging base for 50 years. Hotels and fractional properties would be exempt.
This tax hike singles out one segment of our local tourism economy, increasing taxes by $12 million on a critical portion of the city’s lodging base and passing on that tax to visitors who come to Aspen to ski and vacation and to shop in our local stores and dine in our restaurants.
2A is a tax on our entire local economy, and it doesn’t deserve the public’s support. Vote no on 2A.
The ballot measure misfires in more than one way. Condos simply aren’t to blame for Aspen’s lack of affordable-workforce housing. Aspen’s condominiums were designed, located and marketed specifically for skiers and vacationers. They never were intended to serve as affordable housing or housing for full-time residents. Moreover, many of Aspen’s condo-hotels have mitigated for employee housing independently. For example, the Aspen Square houses 38% of its workforce.
There is a narrative being circulated that condominiums have an unfair advantage and don’t pay adequate property taxes. The facts simply do not support these statements. When you examine all property taxes paid (including the RETT, which directly funds APCHA) and take into consideration residential-property values versus lower, commercial-property values, you will find that the final numbers are fairly even.
Moreover, the sheer size of the tax hike will have ripple effects. It will drive nightly lodging rates further into the stratosphere. Many condo buildings host conferences, businesses meetings, and events like weddings. When these happen outside of peak-tourism seasons, we provide additional work for our employees. That helps our workforce year-round, not just in ski season. This tax may drive that business away.
By singling out these condos, 2A pits condos against hotels with different tax rates. 2A will also leave Aspen at a competitive disadvantage with similar properties in Snowmass, Vail, and other mountain destinations, where the lodging tax will be much lower.
Even 2A’s supposed mission — raising revenue for affordable housing — is deceptive. Written into the tax hike is a provision that siphons off nearly a third of the total revenue for infrastructure and environmental projects: $3 million a year of the tax revenue won’t even benefit affordable housing, making 2A appear to be a bid for more money for City Hall.
If the city has critical infrastructure needs that are unmet by its current funding level, it should make its case directly and openly to the public. This proposal with 2A is an attempt to manipulate voters with a pitch to provide affordable housing.
At a time when local employers of every kind are being pressured by rising prices, staffing shortages, and a potential recession, 2A’s tax hike will backfire on small businesses, undermine a key sector of our local economy, divide our lodging community, and fuel spiraling inflation. Yet, it would fail to equitably address the real causes or our community’s affordable-housing shortage.
Aspen voters deserve a chance to consider a straightforward, affordable, equitable, and effective plan for addressing our serious employee-housing needs. 2A is absolutely NOT that proposal. Vote NO on 2A.
Donnie Lee, GM, The Gant
John Corcoran, GM, Aspen Alps
Dana Thompson, GM, Aspen Square
Joe Raczak, GM, North of Nell
Chuck Frias, Partner, Frias Properties
Tim Clark, Partner, Frias Properties
Ben Wolff, GM, Frias Properties
Kim and Paddy Allen, Itrip