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Consumers are losers in Aspen monopoly

Most readers have played the game of Monopoly. I recall the goal was to own Park Place and Boardwalk. If you owned one the rent was $35. If you owned both your rent rose to $70.

Usually I wound up owning lesser properties such as Baltic Avenue.

Developers in Aspen have changed the game. In the Aspen version of the game, properties are condemned and torn down, especially the lower cost ones. Then the opening of new buildings are delayed or stalled, often thanks to Aspen government. Thus, if you should happen to land on Baltic Avenue, you are directed immediately to Boardwalk where you find the rent is not $70 as in the old game, but $700.



This ability to reduce the availability of leaseable spaces allows the oligopolistic property owners to raise rents on the remaining available properties. The results can be measured by comparing prices of menu offerings at Aspen restaurants with those in other cities. The index suggests most items are now 50% more expensive in Aspen. Higher rents tied to the limited and declining property availability are the likely cause.

The five-year closure of the Main Street Bakery illustrates the way the Aspen version of Monopoly operates. Closure of the restaurant cut one competitor out, allowing landlords to charge much higher rents for remaining space. Sadly, the Aspen government facilitates the practice.




Having taught economics — and for a bit, written a column “the dismal scientist” in the Aspen Daily News — I can only admire the audacity of the scheme. Were I part of the scheme, my next step would be to buy the Hickory House, shut it, and push rents higher for the remaining locations.

However, the scheme is likely a violation of antitrust laws.

Philip Verleger

Denver


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