Letter: Why is Aspen so expensive?
Everyone I have spoken to seems to have a different opinion as to why the Shell gas station in Aspen charges 48 percent more for the same amount of fuel than the Shell in Denver. I have overheard theories about Aspen’s isolation requiring expensive transport costs. More cynical residents point to “Aspen’s billionaire problem” noted by The Wall Street Journal (October 2007). They argue that retailers are simply exploiting the increased willingness and ability of the well-to-do to pay for the convenience of buying goods locally. Libertarians, of course, blame the taxes, referencing a high 2.4 percent city tax for lodging and retail sales.
Though all these explanations are partly valid, I believe they are symptoms of a much more important cause: a vicious cycle of endless real estate appreciation.
In the late evenings, the road connecting Aspen to the rest of the world, Highway 82, is gridlocked with traffic. This snarl-up is not caused by a lack of roads or Uber but by the mass exodus of workers who can no longer afford to live in Aspen. Unfortunately, rising property prices are not limited to summer mansions or luxury condominiums. As residential prices skyrocket, so too do commercial rents.
The exorbitant rents, which can be as much as $200 per square foot in the center of town, get passed on to consumers. Retailers that are not able to charge enough to cover these costs — such as beloved burger restaurant Boogie’s, clothing shop Nuages and Harmony Scott Jewelry Design — close, making way for faceless national chains.
To make matters worse, locals who now have to deal with higher prices or the inconvenience of commuting downvalley to buy reasonably priced soap, require higher wages. For example, a recent Aspen Times article noted that the Roaring Fork Transportation Authority’s top hourly wage, $25.86, is 26 percent higher than the equivalent Denver-RTD wage of $20.15. As incomes rise to accommodate increasing prices, even if this rise is too slow to counter growing inequality, a wage price spiral follows.
Until property prices, both residential and commercial, begin to depreciate, Pitkin County will continue to be one of the most expensive counties in America. Though I think the government should welcome other strategies to decrease prices, including using the Federal Trade Commission to encourage competition in the Roaring Fork Valley fuel industry, these attempts will only make a dent in the problem.
Ultimately, very few are benefiting from the real estate bubble. Businesses, which irritate consumers with high prices and the illusion of a rip-off, are barely making any profit after paying for their leases. Consumers have to pay an arm and a leg for the necessities. Workers have to lengthen their commutes to reach jobs and see their purchasing power diminish.
The only people benefiting from this cycle are the property owners themselves, many of whom don’t live in Aspen. Those in the real estate industry also benefit, but they make up a small minority of the population.
Although prosperity in Aspen does benefit everyone, the inflated land prices and subsequent high consumer prices are not sustainable or positive for the Aspen community.
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