Aspen employee housing is hardly a giveaway
In response to Glenn Beaton’s article on freebie housing (“Aspen retirees should pass torch of freebies to new generation,” Oct. 29, The Aspen Times), I would like to present my view that is quite the opposite; it may be the most expensive housing you could ever own.
In full disclosure, I owned an Aspen/Pitkin County Housing Authority-controlled apartment in Centennial from 1998-2000. It was quickly apparent that I was losing money every single day as my mortgage interest was more than 3 percent, but the potential equity at Centennial was capped at 3 percent or the Consumer Price Index, whichever was the less. CPI has rarely been even close to 3 percent in the last two decades. Not only that, we could have purchased a two-bedroom Elk Run Villa in Basalt in 1998 for around $180,000. By 2000 these were around $250,000, so while I had been losing net worth in Centennial, I could have increased my net worth substantially in Basalt, even though at that time the highway was not yet four lanes through the canyon.
Building equity in your own home has always been a very important factor in many people’s personal choice to purchase their own home. That equity can be realized in many ways, some being on sale of the property, by refinancing, in retirement by a reverse mortgage. Upon becoming an owner of an APCHA-controlled property, these options are no longer available to you as you will not be realizing any meaningful equity increase over the time that you continue to own that property. You are also prevented from purchasing investment property in the Roaring Fork Valley continuing through to Parachute during the time that you own APCHA-controlled inventory. Many of the protections afforded to free-market housing owners are not available to an owner in the APCHA system.
Despite this, some friends of mine have purposefully made this sacrifice because continuing to live in Aspen itself (rather than downvalley) is simply worth it to them enough to give up options of increasing their wealth through free-market property ownership. However, many people I know are now in the position where they are retired in APCHA-controlled housing with no real option that would enable them to leave, even if they want to. The result is that many bedrooms are empty that could be used by this next generation of employees, if they truly want to buy into this system — regardless of the restrictions that will be placed on them.
Building more APCHA-controlled units only places more demands on the infrastructure, schools, water, medical care — just look to the unintended consequences of Burlingame. What was the original purpose of APCHA-controlled “for-sale” housing? It essentially disfranchises owners while relieving the city of Aspen from the burden of administrating and maintaining that same housing inventory were it rental rather than “owned.” Surely that cannot have been the original intention.
Is there a solution? Maybe. Years ago Anthony Hershey, who was on City Council at the time, proposed doing away with all deed restrictions. He outlined how that could create a tier of free-market housing that does not currently exist in Aspen. Under his vision all current owners would be able to sell at what the market would bear, and/or invest in improving their property, and/or continue to reside in their units unencumbered by their current deed restrictions The city would still own and maintain rental employee housing but there would no longer be APCHA-controlled “owned” property. The effects of such would be far-reaching and complex. Could a citizen committee be convened to study this option?
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