ISSUE # 10 ... CIVIL COMMOTION, CONDO-STYLE

Ants Un-Nerved The Red Ant regrets that her instincts (and facts) were right on proposed Ordinance #22 - next Monday night's big discussion at City Council that will update a long-standing land use code section concerning the combination, redevelopment and demolition of "multi-family unit dwellings" (condos, townhouses, etc.) and tighten the exemptions that owners have liberally enjoyed for years. You may click through to send a message to Council to voice your concern before the Monday meeting,  (Click through to email message) , or read the following for the details and click the message link near the end of the letter.  (You may edit the letter to share your personal views.) It seems that the City is pressing for unprecedented control of what they see as the destruction of POTENTIAL housing for local workers, regardless of whether or not it's YOUR free-market owned unit. Community Development Director Chris Bendon read The Red Ant Issue #9 (link here) and told us that he "saw nothing off base" in our interpretation. Consider these realistic examples if the formerly loosely-interpreted list of exemptions is formalized into law, and now enforced: -Identical units in the same building can have wildly different market values depending on who has lived in each unit in the past. (If a locally employed person --even a well paid executive-- ever lived there, those units would be poisoned, and trigger the "mitigation" rule, others would not.) -The due diligence process for a condo buyer will be nearly impossible. Imagine having to prove whether or not a local worker (never mind this "local worker" is undefined) EVER lived in a specific unit! -Lenders, as if they are not nervous enough already in the current market, will be ESPECIALLY wary of this due diligence process and valuation issue. -And realtors, how do you plan to disclose the ramifications of Ordinance #22 to your condo and townhome buyers and sellers? Will contractual materials mandate a lifetime history (rental and ownership) that indicates whether or not residents were "local workers?" -This regulation likely will have the perverse result of causing condo owners and HOAs to preclude renting/selling to local workers to avoid tainting the units for future mitigation requirements.

Civil Commotion as a Commodity?

The list of exemptions to Ordinance #22 graciously exempts from the punitive measure "non-willful demolition" due to flood, fire or other natural catastrophe. Then there's the curious exemption due to "civil commotion." Civilcommotion? (We're serious.) Of course there's no definition, but apparently if this is the cause of demolition," well, then, exemption is granted. Yippee!! There goes the neighborhood! We can see it now. Invitations to the Tupperware parties of tomorrow, a.k.a "A Condo Commotion Posse for-hire." Invite 'em over and they'll show up with their blow-torches and tire irons, have a few beers, and next thing you know, your condo is demolished, and, what a coincidence, so is the one next door. Oh no! OH YES! A "Condo Civil Commotion" just occurred! And now you get to re-build your condo and the one you own next door, as one, thankfully without having to build four bedrooms of affordable housing next to the HOA's swimming pool or in your 2-car garage. " But officer, I swear, I just invited a few buddies over for beers. Yep, they were a little hacked at City Council telling them how many ounces they could drink, and it started a little commotion." The Gant Ants' House Party!

Yes, There ARE Options

Thankfully, there are several "Options" open for discussion on Ordinance 22. City Council requested that Staff develop additional options for consideration. The Red Ant encourages you to re-read Issue #9 and the proposed Ordinance 22, which includes these options in Exhibit A (click here to read). We feel strongly that there is only one choice: Option 8. The elimination of the program in its entirety. The Red Ant is an ardent supporter of affordable housing in Aspen, however, this highly questionable land use code section within Ordinance #22 is not the answer. Many experts we have talked with even question its legality.

The Ant has made it easy to make your voice heard.

To send your recommendation for Option 8 to the Mayor and City Council members, CLICK HERE . You will be asked for your name, local address, and an email will automatically be sent to each of them expressing your view. You may edit or make additions to the email text. Experts Agree Our mailbox was full with all of your feedback and advice on our questions about Ordinance 22. A local real estate attorney states: "The ordinance will create uncertainty in the marketplace. In this shaky economic environment buyers need assurance that their investment is safe. But this ordinance will force buyers to consider whether the future value is going to be appropriated by the local government. And every realtor in town will have to disclose this ordinance to potential buyers." And local realtor Charley Podolak adds: "One of the many unintended consequences of this ordinance is that many buildings fall into total disrepair. If owners must replace 100% of the units on site with affordable housing first, they will likely utilize all of the allotted FAR, density and height before they can build any free-market units to pay for the development."

Be There! Council Needs To See Your Concern

The Red Ant will be at Monday's City Council meeting to promote Option 8. But this measure needs a large chorus of voices to make an impact on Council. Please join us in Council Chambers to speak to this issue. The meeting starts at 5 p.m. However, this item is well into the meeting agenda. http://aspenpitkin.com/uploads/sept22.pdf.htm Public comment will take place when the agenda item is discussed. Your email AND your presence is important to make a difference. If passed, the measure will become law in 30 days.

Comments

[Aspen Real Estate Attorney]

Putting aside for the moment the legality of Ordinance 22, it occurs to me that this ordinance is going to be very expensive for the local governments, and I don't just mean in terms of legal fees defending the ordinance from the inevitable 5th Amendment takings challenges.

For example, if there is uncertainty in the marketplace there will be fewer transactions. If there are fewer transactions there will be less transfer tax income. The transactions that due occur will probably reflect lower prices, thus further reducing transfer tax income. If there is less transfer tax income there will be less money to spend on affordable housing.

A much bigger hit would be in respect of property tax income. Ordinance 22 will devalue a large percentage (I don't have the data) of the parcels that comprise the Pitkin County real property tax base. One must expect that after Ordinance 22 passes even newer condominium units will experience some devaluation; older units might not even trade, in which event the owner of such a unit could make the argument that his unit is worth ZERO b/c there is no market value. One must also expect that going forward many more condo owners will protest their property tax assessments and seek lower assessed valuations due to Ordinance 22.

There will also be less construction activity, meaning the City will receive less in the way of building permit fee revenue and sales tax revenue. There will also be the problem of having an aging stock of condominiums that nobody will want to replace, thus making our resort less attractive to visitors who naturally will seek out newer and better amenities at other resorts.

I don't think Aspen can afford Ordinance 22.