Cause for concern with Aspen housing authority board member
I had to Google to see if Aspen/Pitkin County Housing Authority board member Dallas Blaney’s letter to the editor was from a real person or a straw-man argument by a fictitious person to make APCHA look silly (“Aspen affordable home ownership not always feasible,” The Aspen Times).
I hope the core point was that ownership involves spending money on maintenance and will give him or her the benefit of the doubt on that. However, the numbers used by Dallas display a troubling thought process at APCHA.
First, the 1 percent real estate rule that I am most aware of relates to rental income needed to justify an investment. Dallas notes that his version refers to budgeting for annual maintenance and 1 percent of purchase cost seems like a reasonable budget guesstimate for average annual spending. One year a person might not spend much at all, but other years there will need to be roof replacement. Condo fees would generally include a capital reserve for such projects. Single-family homeowners will need to create their own capital reserve unless there is an HOA that does so.
Dallas then makes a logical leap into the ethers by assuming that one should budget for 1 percent of the cost of a free-market unit rather than the price paid or even the price of the unit with construction subsidy added. In his example, that would have the buyer of a $216,000 condo budgeting $20,000 per year for maintenance! Worse yet, Dallas uses this flawed logic to conclude that people who can afford the mortgage cannot afford ownership because they cannot save $20,000 of their $36,000 in annual income. Holy Cow, is that pretzel logic!
I am not sure what Dallas’ qualifications or interest are in serving on the APCHA board, but this thought process cannot be used for setting public policy. What is going on over at APCHA?
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Editor’s note: This letter was directed to Aspen City Council and Mayor Torre.