Make Aspen hotels pay their way with employee housing
Elizabeth Milias, CEO of the San Marino-based Milias Foundation, wrote an excellent commentary on the predicament tied to the Aspen subsidized housing program. According to her calculations, 3,000 more units are required (“Subsidized housing — 3,000 more units is 12 Centennials,” columns, Feb. 13, The Aspen Times).
Milias traces the history of the town’s development and correctly notes that the program is essentially “buying down” exiting properties and then selling them at a discount to locals.
The Milias essay is a useful test question for young economists, especially when she asks, “How did we get here?” The correct answer is that the city failed to internalize the economic externalities imposed on the residents of Aspen when the town allowed the construction of new hotels without requiring the hotels and some business to build housing facilities for their employees.
This is not a new issue. Promoters of resort establishments in remote areas have found it necessary to construct housing for employees for years. You can see such facilities today at most of our national parks.
Recently, Aspen Skiing Co. recognized the externality it created and constructed housing for some of its employees in Willits. The other hotels should have been required to do the same.
However, developers will not willingly construct such facilities because it is a cost they cannot recover.
The town should look for ways to make the hotels that caused the problem, solve it. Such an action will cut, but not eliminate the need for employee housing. Subsidized housing is needed for teachers, police, hospital workers, and even doctors, if the community wants the skilled professionals living in the city.
For example, I know one excellent dermatologist who chose to remain in Denver because he could not afford housing in Aspen where his children could attend Aspen public schools. He found good schools in Denver. This is the cost of doing nothing.
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