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Aspen affordable home ownership not always feasible

I’d like to respond to Mick Ireland’s editorial “Building community, not division” in the Dec. 4 Aspen Daily News.

I agree with Mick that opinion is no substitute for fact. I also agree with him that most of us shouldn’t be renters forever if we can afford to own. However, to this I would also like to add that ownership is not always a viable option for those who currently fall in the Category 1 and 2 income brackets.

According to the most recent Aspen-Pitkin County Housing Authority data, some 55 percent of Category 1 and nearly 25 percent of Category 2 ownership households in APCHA are housing cost-burdened.“Cost-burden” is defined as a household spending more than 30 percent of their annual gross income on housing costs, a figure widely accepted as the maximum threshold for affordability.



Indeed, once we factor in the cost of repairs and maintenance, it is the case that many low- and lower-moderate income workers are simply not financially prepared for the overall cost of ownership in Aspen.

It’s no secret that all deed-restricted owners in Aspen and Pitkin County, both individual households and their HOAs, must purchase free market (i.e. unsubsidized) labor, materials, and professional services for ongoing and unexpected maintenance, repairs, and improvements in a market where the average price of a single-family home is $7 million and the average price of a condo/townhome is $2 million.




The average sales price for a subsidized condo in Aspen is $216,000. Therefore, the average APCHA condo sells for only 11 percent of the average free-market condo in town. That’s a great deal if you’re fortunate enough to get it.

But in real estate, regardless of subsidy or free-market price, there’s something called the “1 Percent Rule.” It says that 1 percent of the free-market purchase price of a home should be set aside every year, on average, for ongoing maintenance and repairs over the life of the home.

Using this rule of thumb, for example, the average homeowner of a subsidized condo in Aspen might expect to set aside or spend up to $20,000 per year (1 percent of the $2 million average free-market price of a condo/townhome) above and beyond their mortgage, property taxes, and insurance just to maintain their home and HOA.

As Aspen and Pitkin County are extraordinary housing markets, this example is of course extreme. However, this 1 percent rule of thumb is predicated upon local construction costs (i.e. labor, materials, professional services), which in Aspen are considerably higher than the national average.

For many low and lower-moderate income APCHA homeowners, it is simply not possible to save the amount needed to cover maintenence costs, particularly given the recent increases in health insurance costs, gas prices, etc. For example, the maximum gross income for a Category 1, one-person adult household is $36,000; and the maximum gross income for a Category 1, three-person (two-adult, one-child) household is $43,500. I’m sure we can all agree it is unreasonable to expect anyone in these income brackets will set aside 50 percent of their gross income for home maintenance.

The bottom line is this: People can afford to buy their subsidized house, but often cannot afford to maintain it.

Mick’s assertion that APCHA executive director, Mike Kosdrosky, considers low- and middle-income residents are somehow “unfit” for home ownership misses the point. The concern is not that Category 1 and 2 households don’t deserve an opportunity for ownership; rather, Mike’s comments highlight instead the extraordinary maintenance costs that burden so many low- and lower-moderate income owners in the APCHA system.

It is our belief that APCHA should do everything possible to position our fellow citizens for success, not failure.

Knowing the actual cost of deed-restricted ownership over time — the cost beyond someone’s subsidized purchase price and property taxes — is essential if we are to protect the value and affordability of our workforce housing inventory for future generations.

Dallas Blaney

Board member, APCHA