Paul Andersen: Should vacant second homes have to pay?
Offseason is a perfect time to inventory vacant homes in Aspen and Pitkin County. Itinerant owners are gone during iffy weather, so their blinds are closed, their doors are locked.
Even when they’re empty, however, energy flows unabated through second homes. Many consume far more energy than smaller residences — by a magnitude of three times — because of energy-gulping amenities such as pools, spas and heated outdoor areas. Such was the recent conclusion of an independent energy study:
“Energy use per square foot of home increases as the home size grows — by three times. A 10,000-square-foot home doesn’t use 10 times more energy than a 1,000 square-foot home, but instead uses 30 times more energy. Energy use per square foot begins to rise more drastically once a house reaches 7,000 square feet.”
If this community hopes to seriously confront climate change, it has to address the impacts of empty vacation homes, which cover ridgelines and mesas as a testament to the privilege of wealth.
This topic has long been taboo in Aspen and Pitkin County where an inconvenient truth is mostly unspoken: extravagant vacation homes contribute significantly to the pending crises of climate change.
In some places, a punitive tax levied on vacant luxury properties is gaining traction. New York Today reported in February that “Kenneth C. Griffin, a hedge fund billionaire with an estimated net worth of $10 billion, added to his personal real estate portfolio by closing on a $238 million apartment on Central Park South in New York.”
Since Griffin lives out of state, he and other buyers of pied-à-terres properties are not subject to state or city income taxes and do not pay New York sales tax while outside the state.
An empty home tax, suggested the article, “would institute a yearly tax on homes worth $5 million or more and would apply to homes that do not serve as the buyer’s primary residence.”
The idea is to make absentee owners pay for the impacts of their properties in context with the communities into which they buy. If they lock up a limited housing inventory for personal luxury, then they are obligated to contribute to that inventory or pay other offsets.
The city of Vancouver charges a 1% tax based on assessed value. As a result, “in 2018, the number of vacant homes declined by 15 percent and about $33 million in taxes is expected to be collected — a revenue stream earmarked for affordable housing.”
Aspen is in need of more affordable housing, so a second-home fee could fund affordable housing and thereby reduce commuter traffic on Highway 82, which is yet another contributor to climate change.
However, burdening the wealthy here has become a stigma because wealth in Aspen equates to cultural richness and upscale community amenities. To penalize wealth in any way is to bite the hand that feeds.
It’s the same in New York City where levying fees on the wealthy could reduce tax revenue and philanthropic output. Still, wealthy New Yorkers are not about to flee to second-tier cities, just as wealthy second homeowners in Aspen and Pitkin County will not flee to Grand Junction.
Vancouver Mayor Gregor Robertson, while addressing second-home fee-payers, quipped at a news conference: “Thank you for contributing to Vancouver’s affordable-housing fund. It’s unacceptable to have homes sitting empty when so many people are looking for a place to live.”
Aspen and Pitkin County could raise millions by levying a second-home fee. It might even compel owners to hire people to live in their homes, perhaps housing a prep cook in an Aspen Victorian or a landscaper in a Starwood estate.
The idea of a second-home fee will freak out development and real estate interests because they are vested in market-driven entitlements that have decimated year-round neighborhoods, evicted the Aspen workforce and ramped up carbon output.
Still, an empty-home fee could reduce demand for resource-hungry second homes, improve demand for hotels and lodges, enliven residential neighborhoods and reduce energy and resource consumption in a community that has vowed to save winters for future ski seasons and future generations.
Paul Andersen’s column appears on Mondays. He may be reached at firstname.lastname@example.org.