Sean Beckwith: Cash-in-lieu of what?
When Aspenites who aren’t second-home wealthy hear “affordable housing” or “employee housing,” their interest is immediately piqued. It’s like the sound of kibble hitting the food dish for a dog; people rush over and consume it like it’s their last meal. Only, instead of a short period until the next round of chow is served, it really could be a local’s last shot at acquiring a place to live that’s close to their work.
It’s easy to rail on the city for a lack of worker housing — and, believe me, that portion is coming — but there’s a bigger culprit in this city’s never-ending problem. The cash-in-lieu option for developers is an easy out to an issue that should fall on the city and developers. If you don’t know what I’m referring to, cash-in-lieu is a way developers can mitigate for employee housing without having to actually build any. If real estate jargon isn’t your thing, let me try to explain it in a less mind-melting way.
Say you want to plant an apple tree and sell them in a place — let’s call this place App-spen — but App-spen requires you to provide apples for your employees. These apples are normally hard to find and very expensive for employees, so getting a hold of any apple takes luck, timing and perseverance.
Well, say a developer doesn’t want to sell any of his apples at a discounted rate because he paid/people will pay a premium for the apples, which is behavior befitting a capitalist. Essentially, big-time developers are springing for Honeycrisp apple trees and don’t want to plant less-profitable Red Delicious apple trees. (An unscientific poll of Aspen Times employees declared Honeycrisp the best apples, while Red Delicious and the “green apples that are always mushy” were declared the worst.)
So the city of App-spen tells you, “Hey, you know you can sell all your Honeycrisp apples at market price and either buy available Red Delicious apple credits or just pay a cash-in-lieu fee that helps the city plant Red Delicious trees/provide apples for employees.” (There are different degrees of employee apples but we’ll stick with Red Delicious to avoid additional confusion.)
Well, if all you have to worry about is a one-time fee, why bother continuously feeding your employees/losing potential revenue when App-spen gave you alternative options for providing Red Delicious trees? This is where it gets complicated, so try to follow. Paying cash-in-lieu is cheaper than buying a Red Delicious credit. On top of that, the money from the fees designated to planting future Red Delicious trees isn’t enough for the guy planting them to turn a profit. Whether it’s due to inflation or proximity to Honeycrisp apple trees, the cash-in-lieu fee for a Red Delicious apple is actually less than what it takes to produce that apple.
The Red Delicious tree guy is understandably going to stop planting trees if he’s losing money on the apples, and the Honeycrisp tree developer isn’t going to pay more for a credit when cash-in-lieu is cheaper.
App-spen only has so many plots to plant trees, and the less desirable the tree, the less likely people are going to plant it. So, if App-spen can no longer find someone/a place to plant Red Delicious trees, it’s left collecting money for tree development that may never happen.
This is the situation Aspen finds itself right now. The city is still offering cash-in-lieu payments even though the guy who’s nice enough to build employee housing has been saying the fee isn’t enough — and he’s been saying this since 2014. (“Fornell asks city to re-examine cash-in-lieu practices for housing,” The Aspen Times, Nov. 25, 2014)
Employee housing is obviously more complicated than an apple tree analogy for the Aspen-Pitkin County Housing Authority and elected officials, but maybe the city’s development referendum should’ve continued until it figured out a way to make its alternatives to building/providing affordable housing viable.
There are obvious geographical limitations to development in Aspen, which is compounded by land-use code restrictions. You can’t construct a 12-story affordable-housing apartment complex because it will obstruct viewplanes, and that assumes you can buy land for the building in the first place. Even when a project is approved, people will still complain about its size and “fit” for the neighborhood. (To the people who don’t want to slum it up next to working-class folk, I say, “Really?” Seriously, we can check you into a hotel, cook/serve you food, pour your drinks and rake your lift lines but can’t share the same street? Ahh, classism at its finest.)
This brings me — in the longest way possible — to the Lift One redevelopment. The developers have the gall to ask taxpayers for money for their deluxe hotel/restaurant/bar/eyesore because it adds a park and museum but features minimal affordable housing. Even APCHA voted down their attempt to use cash-in-lieu or the credits program to get around their housing conundrum (“Developers’ affordable-housing plan at base of Aspen Mountain changes,” The Aspen Times, Oct. 5, 2018).
In the developers’ arguments for this monstrosity, they pointed to the fact that the project will raise millions in funds for employee housing through sales and real estate transfer taxes. Be that as it may, what are those funds going to build and when? More Burlingame housing for established families is nice but what about the people not yet established? You know how many chefs in Aspen would commit a felony just for consistent — not even necessarily good — staffing? So many chefs.
It’s old money versus no money, part-time employees versus second-homeowners. People want new amenities before fixing old problems. Don’t show me the money, show me the housing.
Sean Beckwith is a copy editor at The Aspen Times. Reach him at email@example.com.