ISSUE #226: Aspen's Proposed STR Tax Will Kill Traditional Rentals (7/31/22)

"When a new source of taxation is found, it never means, in practice, that the old source is abandoned, It merely means that the politicians have two ways of milking the taxpayer when they had one before."

-- H.L. Mencken

The latest round of courtship of the law of unintended consequences is underway. Council is floating the idea of adding 13.1% to the existing 11.3% tax on lodging for short term rentals (STR). This will affect the VRBO-type rentals as well as every rental unit of every size in the city of Aspen. 

It's too much. And it's too broad. For over 50 years, Aspen has relied upon rental condos to supplement its bed base and provide non-hotel lodging options for our visitors: Aspen Square, The Gant, North of Nell and many others. Subjecting these properties to the same punitive tax as luxury home rentals and those via online platforms is wrong, and the results will be devastating.

Read my column in today's Aspen Times HERE.

* * * * *

The tax on short term rentals (STR) proposed for the November ballot is too high and casts far too wide a net. It goes far beyond VRBO and the lawless, nontraditional rentals at the center of the STR debate. This tax will impact every property, large or small, that rents short term in Aspen. Hotels are the only exemption. Intended to address the perception of unmitigated growth and alleviate negative impacts of rogue rentals on local neighborhoods, the proposed tax is city council’s way of saying they “did something” but it completely overshoots the target.

The city is ginning up support to add an additional 13.1% tax on all STR. Today’s tax rate is 11.3%, so the total becomes 24.4%, justified by council because it sees these as “mini hotels” and wants them treated as commercial entities. Individually owned, these properties currently pay residential property tax rates and do not mitigate for subsidized housing. The new tax is designed to put STR on par tax-wise with commercial lodges. Ironically, council has just made it legal for multi-family subsidized housing complexes to be developed in residential neighborhoods creating similar if not greater full-time impacts, but no, these aren’t “mini hotels.” These impacts are apparently ok. I digress.

The STR tax unfairly lumps luxury home rentals together with rentals of 50-year-old condos that have been rentals since they were built. Think North of Nell, The Gant and Aspen Square. These traditional rental properties are in the lodging zone, so they will get the STR permits they desire, however, they will also be on the hook for the new tax.  For other traditional rental properties a few blocks away in the RMF zone like Chateau Eau Claire and Chateau Roaring Fork, along with all other privately-owned condos and homes on the rental market, they now must compete for a very limited number of rental permits and pay a hefty premium should they land one. And then pay the tax.

These are the condos that have supplemented our hotel bed base throughout the resort’s history. They’ve played vital hospitality roles and have long supported our most cherished events: World Cup, X-Games, Food & Wine.  But are STR really the sole cause of our recent population growth and associated impacts? According to local property managers, no. In reality, these traditional rental properties have actually seen an unprecedented amount of inventory come off-line since the pandemic. The data shows dramatic increases in residential occupancy by long-term tenants and actual homeowners, fueled by the remote work movement.  

This loss of STR inventory has clearly opened the door for VRBO and such to fill the shortfall, which has pushed rentals farther into residential neighborhoods. This is at the root of the problem. The provisions of Ordinance 9 recently created a new permit quota system, enforcement regime and operational standards. Now is not the time to levy a debilitating tax but instead look at constructive ways to narrow the focus of STR oversight and regulation in instances where there is little. If online providers and luxury home rentals are the problem, focus specifically on them. But don’t up-end our traditional rental condo industry. 

Furthermore, it is notable that when occasionally-used vacation properties and second homes become longer term rentals or even permanent residences, the associated need for services (housekeeping, maintenance and other personnel) becomes constant rather than occasional. In other words, the impacts that some neighborhoods find objectionable may be those associated with use, regardless of length of stay. These impacts will not go away with an STR tax and should be at the forefront of a much larger community conversation on carrying capacity.

Regardless which if any segment of the rental market is eventually subject to a 24.4% STR tax, the results will be nothing short of devastating. To compare, Snowmass Village has a 12.8% total tax rate, half of what is being proposed for Aspen.  Telluride, Jackson Hole, Vail and Park City range from 10 - 13.3%. As with hotels that already pay commercial property taxes and mitigate for subsidized housing, any tax increase will be passed along in the nightly room rate. We’ll be punishing our visitors, and this will adversely affect our tourism economy. Competition between resorts is already fierce; why would we deliberately put ourselves at such a disadvantage? Especially for something that will not work.

Contrary to council’s belief that our visitors are so wealthy that more than doubling the rental tax rate will go unnoticed, consumers are rational actors. Simply put, they’ll go elsewhere. As in elsewhere outside of Aspen. And rental property owners will find the work-arounds. They’ll still rent their properties, just illegally or with 30 day minimums. The objectionable impacts will remain and the city will get zero revenue. What will we have then accomplished?

Instead of waiting to see how the provisions of Ordinance 9 affect the marketplace, city council’s mad rush to heavily tax this critical segment of our resort economy stands to specifically target and detrimentally impact our visitors who prefer not to stay in hotels. We’ll be pricing them right out of Aspen. 

Here they go, picking winners and losers again, while they survey the community on how to spend the expected $11 million this is expected to generate annually. 

ISSUE #225: No Blank Check from the BOCC (7/17/22)

"Evil people rely on the acquiescence of naive good people to allow them to continue with their evil."

-- Stuart Aken

A big meeting between Aspen's city council and Pitkin County's board of county commissioners (BOCC) is happening on Tuesday.

Yep, the two bodies do get together time and again (not often enough) to discuss issues, none as important as housing. Recall that APCHA is the Aspen - Pitkin County Housing Authority, an independent government agency, that sadly operates as a department of the city despite its charter, and its director reports to the city manager, not its board. This is all because the board allows it. The county is woefully ill-informed about APCHA, its operations and its governance, by design. It's the city's RETT that pads the APCHA coffers so the city keeps the county in the dark.

Until they need money. And need money they do. Like half a BILLION dollars for the Lumberyard development alone.

The city is coming after the county to raise taxes with an open-ended tax. And the pressure is intense. For now, the ill-informed BOCC is asking the hard questions and pushing back, but all county property owners are advised to get informed. The money grab is on.

Read my column in today's Aspen Times HERE.

* * * * * 

“Call the clerk,” they cried. Or at least councilwoman Rachel Richards did. Whether by design or the sudden realization that the deadline for space on the November ballot was fast approaching, speaking for her colleagues in advance of Tuesday night’s joint session between city council and the board of county commissioners (BOCC), Richards implored the county to reserve space on the November ballot for a potential measure to raise dedicated revenues for a new Pitkin County Affordable Housing Fund. “The needs are great and growing,” she wailed, but nowhere in the desperately pleading missive was any empirical evidence: no quantifiable housing needs assessment or plans for one, no mention of auditing what we currently have to determine just what it is we need and for whom, no specifics on an end goal and no details on how the monies would be raised. City council attempted to compel its county counterparts to impose housing mitigation fees, and start land banking and padding the housing coffers with new taxes and fees for more subsidized housing. In other words, an open-ended blank check. 

But luck for Pitkin County landowners prevailed. At least for now. The BOCC, well, all but mad-cap subsidized housing zealot Kelly McNicholas-Kury, said, “Whoa.” It was the grown-ups in the room who called out the rushed request and began asking all the right questions.

We have many anecdotes of people “needing” housing, but until we know scientifically just who lives in our existing housing and what they do in our community, we cannot possibly begin to simply raise taxes and fees to build or acquire more. Who would we give it to? And who would decide? The current trend, especially among the larger employers out of necessity, is to purchase or develop their own employee rental housing. You can bet that each of these employers knows exactly who is in their units and what those individuals specifically contribute to their business. My guess is that most are considered “essential.”

We will never be able to accommodate everyone who wishes to live affordably in Aspen. The demand is infinite. At a certain point, we have to prioritize. In our new quest to repurpose our subsidized housing into “community housing,” ostensibly because it is neither affordable nor just for employees, it has become taboo to even ascertain the actual allocation of our housing stock among various constituencies: service, retail, restaurant, real estate, schools, hospital, first responders, non-profit, professionals, teachers, government employees, retirees, etc. Perhaps we are heavy in real estate and non-profit, for example, and low in teachers and first responders.  This knowledge would only help make the case for unmet needs and ensure the community’s essential needs and priorities are addressed with what has become a scarce resource. 

The community’s priorities are greater than just housing. Yes, it’s one of the crises du jour, but where is the broader discussion about growth and capacity? Aspen and Pitkin County are famously no-growth, yet the city has annexed the Lumberyard and mini-storage parcels and plans to build 277 units of various sizes on the site. The Lumberyard and Burlingame 3 stand to add nearly 1000 full-time, year-round residents to our population, but does this growth somehow not count because it’s subsidized housing? Has anyone addressed this potential population explosion with the schools or the hospital? Contrary to maintaining a steady-state, these developments represent enormous impacts to our vital infrastructure before even factoring in the added traffic and loss of the “off season.” It also fails to account for the 700-plus units coming online in the mid-valley.

Indicative of a larger pattern of spending millions to plan subsidized housing developments only to later consider a funding source, the city recently shelved its $50 million proprietary development for “essential” city employees near Thomas Reservoir.  Paying for these massive developments is clearly an afterthought, so Pitkin County landowners are wise to follow along as the city desperately roots around for additional revenue streams. There won’t be a tax measure on this November’s ballot, but the city will be back. Mayor Torre spent the last week shaming BOCC members for their rejection of the city’s aggressive and foolhardy request.

In the meantime, the city continues to buy down free market properties in the area, recently purchasing a condo in Snowmass and another at the ABC for its own employees at arguably above-market rates. Already, neighbors of those units are sniffing around about potential sales to the city because it pays top dollar, and in so doing, contributes to driving up local real estate prices.

Thanks to the BOCC for pumping the brakes. There are indeed huge trust issues in the community when it comes to the city and APCHA. When such a ballot measure is inevitably brought up again, the BOCC would be wise to require the city to come to the table with an independent APCHA audit, a quantifiable housing needs assessment and a detailed proforma for raising revenue dedicated to a very specific and measurable housing goal to start the conversation. Until then, blindly giving the city more money is on par with burning it.

Rachel Richards says our housing “needs are great and growing.” So too is the need for accountability and full transparency on our existing housing program before we raise another cent.  Contact TheRedAntEM@comcast.net

ISSUE #224: Fodder for the "Told Ya So" File (7/3/22)

"People will forget what you said. People will forget what you did. But people will never forget how you made them feel."

-- Maya Angelou

It's a sad day in Aspen. I had a hard time writing this column. Three successive 5-0 votes to drastically change the land use code pertaining to short term rentals (STRs), residential development and subsidized housing mitigation will have far-reaching and very negative impacts on Aspen.

But don't tell city council. They know what's best. They'll even let you come make a public comment, but denigrate you for your input while doing so. And it's all for show. Aside for nominal carve-out exceptions for "locals," the new legislation has been fully cooked since its inception last December when council declared emergency moratoriums on new STR and residential development permits.

Class warfare and blatant wealth redistribution are no ways to lead a community, but these are the tools currently employed to alleviate construction impacts and a perceived (yet unfounded) housing shortage.

It won't work. It's only going to get worse around here.

Read my column in today's Aspen Times HERE.

* * * * * 

This won’t end well. City council’s well-intended but counter-productive decisions will have dramatic consequences, none of them good. In fact, Aspen’s favorite visitor, the law of unintended consequences, just put down permanent roots in town. The recent emergency moratorium-related ordinances governing short term rentals (STR), residential development and subsidized housing mitigation fees are going to spectacularly backfire and make far worse the very conditions they are intended to fix.

The issues were prioritized as a result of the pandemic. Council didn’t like what it saw. The legislation is less about solutions and more about punishment. The outreach sessions were all for show. The predetermined regulations were targeted, punitive and divisive. Even public comments were categorized by what the commenter’s “role” is in the community. Old time local? Council was all ears, unless you’re a developer. Self-employed, full-time free market property owner? No respect for you, villain.

With the sole intent of targeting free market property owners, council is blinded by their naivete, class envy and wealth redistribution goals to comprehend the mess they have made. 

STRs are going underground. Intended to reduce neighborhood impacts, notably parking, and eliminating lodging for what council sees as undesirable visitors who are displacing locals, the new STR regulations are designed to reign in Aspen’s boogeyman. In reality, the complicated legislation limiting permits inherently and immediately exacerbates the growing wedge between “local” homeowners and others who own property here. Locals who intend to rent their “owner occupied” homes short term get to abide by one set of rules, while others must adhere to different ones because their second homes and investment properties are now considered “mini hotels.” 

When STRs are capped, basic economics will prove that limiting supply in a high demand environment results in one outcome: higher prices. In great irony, council’s desire to control the tourism market in order to remain a viable destination for anyone other than the most well-heeled visitors, has just ensured hotel room rates will go through the roof to levels even fewer can now afford. These higher lodging prices will also entice others into quietly renting their homes to meet the demand, regardless of the city’s policies. Cue the black market. There’s always been one in Aspen. 

The demolition market becomes speculative.  Intended to reduce construction traffic and neighborhood impacts, and preserve older homes regardless of their condition or useful life, the new ordinance limits the number of demos on an annual basis to just six. This is in response to 14 demolitions in the city in 2021, mostly of homes that were more than 50 years old. These were modest homes on larger lots, and the new, more efficient homes were built to approved sizes within the existing land use code. Never mind it’s healthy for a community to replace older homes with newer ones. But council didn’t like what it saw. To them, all construction is bad.

It’s now time for any single family home or duplex owner in the city whose home is at least 20 years old to apply for one of the now rare annual demolition allotments. With a demo allotment in hand, won in what amounts to a lottery, the value of one’s property will skyrocket. For others who cannot scrape and replace the home on their property, the surrounding neighborhood is now in for multiple lengthier, messier and far more complicated remodels, 39.9% of the home at a time, to stay below the allowable 40% threshold. Construction activity and its impacts will assuredly continue; the majority of projects in town will just take longer.

Fee-in-Lieu is arbitrary. The illogical mitigation calculus reflects a consultant’s convenient cart-before-the-horse study that attempts to justify re-quantifying the generation of construction workers and household operations and maintenance workers from residential development activity in order to generate more money for subsidized housing that is specifically not for these workers. One might assume that worker housing mitigation might attempt to increase housing opportunities for such workers to live in Aspen or Pitkin County so as to minimize the troublesome traffic, parking and other impacts, but it does not. The irony is that the intended mitigation is for housing non-worker community members who have higher priority than the actual workers creating the mitigation, so in the end, the workers will still commute, create traffic and parking problems, and perpetuate the perception of a lack of housing for workers, and the cycle will continue.

If you watched or attended the council meetings, you saw for yourself. The new ordinances are nothing more than a deliberate attempt to punish and control the free market through a massive wealth transfer and special carve-outs for “locals,” however that is defined. There never was an emergency, it was all about feelings. None of this is rational, well-reasoned nor thought out. It’s strictly punitive. It isn’t about changing private property regulations, it’s about wielding power and control over private property owners. These tone deaf policies will only make the problems worse.

The basic tenets of economics such as the law of supply and demand are completely lost on city council and staff. Aspen is worse off  for this incompetence. Contact TheRedAntEM@comcast.net

ISSUE #223: Aspen Unsatisfied (6/20/22)

"A government that robs Peter to pay Paul can always depend on the support of Paul."

-- George Bernard Shaw

ASPEN TIMES COLUMN

The results of the 2022 Aspen Community Survey are out, and they're damning. In short, dissatisfaction with the services provided by the local government is at the lowest level since 2006, declining 19% in the past two years.

This is primarily attributed to the lack of "affordability" in Aspen: food, drinks, groceries, and of course housing. The key takeaway is that many in Aspen see it as the local government's role to "Make Aspen Affordable" for them. Is it?

Read my column in yesterday's Aspen Times HERE.

And if you're so inclined, HERE is the survey, in its entirety.

THE LUMBERYARD

On a related note, my colleague Paul Menter at the other paper penned a piece on the cart-before-the-horse lack of financial planning for the Lumberyard. It's a must-read HERE.

THE MORATORIUM AND PENDING LEGISLATION

On a critical public policy front, please be aware that second reading of the moratorium-based legislation pertaining to residential building and short term rentals will be on June 28 at 5p. Public comment is encouraged at this meeting. If you are an Aspen property owner, you would be well-served to wisen up about what's coming down the pike.

The following is a letter that was sent to me recently and I whole-heartedly agree. Please review the meeting packet that will be posted on Aspen.gov this Friday, June 24. Do not rely solely on the papers for your information.

"The point of all these new policies is a massive wealth transfer from free market property owners in Aspen to those who currently live in Affordable Housing or future occupants.

And I do mean massive.

This is whether those occupants contribute to our community or not.

As a self identifying liberal, I very much support affordable housing for workers in our community.

But if you look at the details, and what city council is putting forth, it is highly fiscally irresponsible.

And will do very little to actually mitigate what truly is a worker housing crisis.

I suggest that all of you, as property owners, look into this.

And express your opinions on June 28.

Perhaps you will disagree with me.

And will support city council initiatives.

But you really should understand what is going on here.

Because city council is betting that you will not bother to dig into the details.

I suggest you encourage all your property owning friends in Aspen to do the same and really learn what is going on here.

And not just listen to the headlines about what city council is saying.

City council is trying to push all this through in the dark of night.

Just like they did with Ordinance 27 late last year (which was deemed illegal by the courts, and reversed).

There is a reason why this was rushed through during the off season.

And all of the 'community outreach' was a red herring.

Certain members of city council told me as much..that the outreach was just for show..and that they had already decided what they were going to do.

Once again, we all should support what we support.

But you all should really learn what is going on."

Forewarned is forearmed. Please attend the meeting on June 28. Be heard.

* * * * * 

It seems the Whos down in Aspen’s Whoville are not the grateful and joyful bunch most anyone on the planet would be if they were fortunate to live here. 

The 2022 Aspen Community Survey was recently released, and people’s satisfaction with the services provided by the local government declined 19% in two years to its lowest level since 2006. Plus, they feel the city can’t be trusted to look out for residents’ interests, which are primarily tied to issues of affordability.

The survey’s leading questions did not even attempt to conceal the government’s agenda. “What suggestions do you have for keeping Aspen a great place to live, work and play?” Well, not just affordable housing, how about affordable living! The responses reveal that many here see it as the government’s responsibility to address the lack of affordable bars, restaurants, shops and groceries, and of course housing. Such subjective questions about “feelings” are paramount to asking people if they wish they were richer, skinnier, prettier or in better shape. The results are predictable and would be the same anywhere.

You have to see it to believe it but the actual responses are nothing short of embarrassing, not unlike a recent letter to the editor. In response to my column questioning the wisdom and viability of housing non-workers in our subsidized housing inventory amid a widespread labor shortage, I was seriously asked, what was someone who doesn’t work here and who can’t afford free market rent to do when they want to live in Aspen if not allowed in APCHA housing. 

These are my favorite survey responses. “Affordability and services to support the working class need to remain big priorities for the town.” “Someone needs to address the lack of affordability for the working class. There are no bar menus that we can afford anymore.” “We need to step back from catering only to the tourists. I understand that they pay the bills but this is OUR town.”

When people cannot afford something, is it the government’s or the community’s responsibility to make it affordable for them? This is the critical question. The dense report yields a predictable set of recommended actions ostensibly to quell the rising discontent, which is primarily among year-round residents, men, business owners, and those 35-52. It reads like a socialist manifesto with special carve-outs for Aspen locals. 

• ·      We have an urgent need to improve affordability and reduce income inequalities between visitors and locals, and should look to other cities for best practices. 
• ·      We need to prioritize subsidized housing not just for the workforce but for others who wish to remain in the community. 
• ·      We must help local restaurants and bars stay in business through increased controls over commercial developers and the prioritization of developments that provide affordable options. 
• ·      Current full-time residents and workers should be prioritized over tourists and newer “wealthy” residents. 
• ·      We need places where locals can connect. 
• ·      And of course, we need more diversity to strengthen our sense of community.

Living in the utopia that is Aspen requires deliberate trade-offs and lifestyle choices. Perhaps it’s a willingness to have and make less, or endure inconveniences and expenses in order to live in a place that others only aspire to visit. Aspen is indeed wonderful, but living here is not for everyone. No one is stuck here. 

Furthermore, our local politburo sits on an empty restaurant space where Taster’s was, another beneath the old Cooper Street Pier, a subsidized restaurant in the Wheeler that isn’t particularly affordable, an empty Armory, an underutilized Old Power Plant, and a nearly vacant new Taj Mahal City Hall where they deliberately eschewed food vendors on Galena Plaza. Many easy solutions are already literally in the hands of the government. But like with subsidized housing, the answer is always to assail the free market for “more” instead of utilizing what we already have in abundance. (Speaking of subsidized housing, APCHA has recently enabled its residents to make more while paying the same rent through generous exemptions. So, for these residents, “affordability” is actually increasing relative to the rest of the market.)

Notably, the consultants conclude that the effects of COVID had little impact on the survey results, but I disagree. To neglect the historic significance of the disruption that riled markets for three years, created record real estate prices, caused restaurant prices to increase and brought record inflation, encourages the city to enact future policy changes based on an event that is now in the past. The focus should be entirely on people’s dissatisfaction with how the city dealt with the pandemic, not the effects of the pandemic itself. 

The survey is an indictment of a city government that is detached from its constituents who trust it less than ever and see our electeds acting more and more irresponsibly with fake, leading outreach, misguided policies and careless spending (Taj Mahal City Hall, $4.5 million bus stops) from within an echo chamber that only considers one narrow viewpoint. In other words, the survey’s push for a Make Aspen Affordable agenda in response to resident dissatisfaction is more about the city’s and its leadership’s incompetence than anything else.

We have a critical municipal election in March 2023. Time to throw the bums out. Contact TheRedAntEM@comcast.net

ISSUE #222: Aspen's Broken Social Compact (6/7/22)

"Nothing is worse, or more of a breach of the social compact between citizens and state, than for government officials, bureaucrats and agencies to waste the money entrusted to them by the people they serve." -- Bob Riley

Apologies for the brevity but I am traveling this week. I thought you might enjoy my column that ran in Sunday's Aspen Times HERE.

* * * * *

In America, people must consent to government authority. This consent takes the form of laws, order, and often, a social compact. Social compacts exist when a community forges an agreement with itself about the value it creates. Social compacts encompass broad concepts such as accountability, legitimacy, transparency and public trust across social, economic, ethnic and religious lines to theoretically resolve disagreements and enable harmonious coexistence. 

In 1990, Aspen voters first approved a 1.0% real estate transfer tax (RETT) to fund subsidized employee housing; the social compact guiding the tax intended for the funds to be utilized to provide housing for the local workforce. Imposing taxes upon oneself placed public trust in the local government to “do the right thing” for local workers and the community, and consequently, as property values began to skyrocket, to help ensure a stable, high-quality workforce for the long term. This intent was clearly paramount in the minds of both Aspen’s free market residential homeowners who pay the tax as well as the housing program’s beneficiaries who voted the measure in. The social compact was born.

Originally called “employee” housing, the city’s RETT-funded housing gradually came to be deemed “affordable” housing once the program evolved to permit non-working beneficiaries to live in the subsidized units. For a time, the program was affordable. Precious little remains of its original affordability, and as a result, I always refer to it as “subsidized” housing because that is simply what it is.

Aspen’s bureaucracy, however, now refers to this housing as “community” housing, and so it has become, perhaps inevitably. Still, the term “community” concedes that Aspen’s subsidized housing long ago ceased to be for workers, nor is it by any stretch affordable. This semantic shift makes clear the government’s deliberate decision to alter its social compact with the voters and property owners whose taxes have long made the program possible. 

The new compact provides subsidized housing with no long-term goals for how much will ever be enough for residents who no longer work in resort or community-serving jobs. In place of the program’s original intent, our housing program now recklessly chases the infinite demand for housing by people seeking to live affordably in Aspen. So, as plans to collect ever-escalating fees and taxes to build and accommodate this ongoing demand for Aspen’s idyllic lifestyle on an subsidized basis, one thing is clear, the original social compact is irrefutably broken.

Have we all been played? APCHA’s 3,000-plus unit subsidized housing portfolio has nearly 6,000 bedrooms, while the city has a documented population of 7,721. Yet allegedly we have a housing shortage. We don’t. We have a labor shortage exacerbated by a subsidized housing program that no longer prioritizes housing actual workers.  And the city’s grandiose future plans, such as those for the Lumberyard, have zero intention of addressing our actual needs. 

APCHA has proven incapable of properly managing the current subsidized housing stock. Our local governments build expensive new projects to deflect and distract from addressing the ticking time bomb of expiring deed restrictions, where hundreds of current subsidized housing units will revert to the free market in coming years. APCHA, in its conflicted dual role as both subsidized housing program operator and regulator, refuses to disclose who it is we are housing, where they work, and whether or not they actually comply with their own permissive governing rules. Our electeds prefer not to know; such knowledge might conflict with their unwavering desire to deliver more.

What very little remains of the social compact will deteriorate even further with the 277-unit Lumberyard project. A $425 million project cost is the equivalent of $55,000 from every one of Aspen’s 7,700 men, women, and children – an astonishing figure. Perhaps compared to the $90,000 national debt share each of us shoulders, $55k to build 277 subsidized housing units may seem like a bargain. To me, it feels like yet another violation of Aspen’s social compact. Funding more subsidized housing units with not just the RETT but ever-higher and arbitrary mitigation fees charged to a dwindling population of free market homeowners is like eating one’s seed corn.  Even so, the city of Aspen boldly assaults the social compact and arrogantly comes back again and again for more.

Under leadership devoid of real-world experience that operates on feelings while ignoring facts, Aspen’s original social compact for worker housing has become a thing of the past. Today, it’s no longer even about workers, as city leaders casually dismiss the pressing need for proper housing for the workforce. Instead, in a misguided attempt to tame the free market and punish those who buy into it, they seek to fulfill their long term desire for a utopian subsidized community. The Lumberyard alone will grow our full-time, year-round population by 10%, and will clearly impact our quality of life, far more so than robust seasonal tourism, not to mention stress our vital infrastructure including the hospital and schools. And in the end, there still won’t be anyone to do the work.

The social compact was the glue that held this community together. What now? Contact TheRedAntEM@comcast.net

ISSUE #221: City Council's Off-season Power Trip (5/23/22)

"And whatever we do, it should be sort of limited. Let's present some options instead of giving free reign to a committee."

-- former Aspen city councilman Jack Johnson

Each city council has a unique make-up - and we've had some doozies. Remember when Mick was mayor and he and his cohorts JE DeVilbis and Jack Johnson collaborated to bring us the ill-fated Hydro Plant and the disastrous Instant Run-off Voting debacle (among other policies) when they ran the table with their 3 votes? Our current group is not much different. They're a 5-0 echo chamber, with little to no discussion nor debate, and with absolutely zero regard for citizen comment or feedback. "Community outreach" is simply a formality so they can check that box.

But don't be surprised that I am advocating for significant raises for the mayor and city council. No, I'm not talking about merit pay. I am playing long ball here and recognizing that we have been getting EXACTLY what we pay for. In short, nothing. 

The paltry pay for our city electeds is actually a major deterrent when recruiting interested and qualified citizens to run for local office. We currently have a $211 million annual budget, so we can absolutely afford it. Besides:

• The current salaries are right there with those of a part-time dog walker.
• Raises would not affect the current group - they'd have to get re-elected in order to actually get the raise.
• County Commissioners are paid $90K a year (set by the state).
• The complexities of "running Aspen" (and that budget) warrant fair compensation for actual skill sets.
• Do we really think city staff respects anyone who is willing to work for peanuts? Maybe that's why they regularly run roughshod over council.

We should do this now, while financial times are good, otherwise, we stand to go another generation only being able to attract the bottom of the barrel to run for office. 

It's an investment in our future. Read my column in yesterday's Aspen Times HERE.

Notably, the next municipal election is in March 2023.

* * * * *

While town is empty during the annual spring sojourns, our local electeds, left unchaperoned, have embarked on a vacation of sorts of their own. It’s called a power trip. There is no other way to describe their self-serving and arrogant behavior, reflected in recent quickly-enacted policies that serve few good purposes other than to inflate their own egos and assert their lordship over the local minions.

• ·      The six month moratorium on residential development permits was quickly extended by at least two months while draconian new regulations are finalized. These promise to include increased fees and mitigation to fund an upwardly-moving-but-unstated number of new subsidized housing units, as well as increased allowable densities on vacant properties where developers will be encouraged to build high-density, multi-family housing in all zone districts. 

• ·      While council decides who is allowed to rent out their private property on a short term basis, the flawed assertion that short term rentals are to blame for Aspen’s housing crisis, not the mis-managed housing program itself, is repeated time and again. The 2008 Aspen Area Community Plan cites in the eight years “from 2000 to 2008, the ratio of local workers living in free market housing dropped from 22% to 13%.” Conservatively extrapolating 14 years later, it has likely decreased another 9%, from 13% to 4%. Is this really the biggest crisis in our community? A higher priority than anything else? 

• ·      Distracted by their work transforming Aspen into a socialist worker’s paradise with a near-term goal of adding 500 subsidized housing units to our existing inventory, our electeds have neglected the very real impacts of expiring deed restrictions on numerous properties in our portfolio. Notably, the rental portion of Centennial representing home to 450 local workers was sold in 2020 to a private equity firm that also recently snapped up an additional 22 units in town. These units house local workers today, but the deed restrictions are not permanent, and when they expire, the properties will revert to the free market. Perhaps we should protect what we have before building more?

• ·      Remember Taster’s Pizza, by the skate park along Rio Grande Place? It was driven out amid construction of the Taj Mahal City Hall and not replaced. An affordable restaurant there was clearly not a priority. With the stroke of a pen and zero formal review process, council recently approved a food truck in front of that location, usurping a couple parking spaces. This strangely comes on the heels of an early May “clean-up” that saw the demise of the Creperie’s street activation “Chalet” and Kemosabe’s barn, among others, and notably, the cancellation of the W Hotel’s food truck in 2020. “Messy vitality” for me, but not for thee.

• ·      On the outskirts of town, the roundabout remains torn up. The only thing council is doing about traffic on Highway 82 other than ignoring it is planning to make it worse with a new traffic light at the Lumberyard.

• ·      The Lumberyard’s final unit count has been set at 277, with an estimated cost of $400 million. This $1.44 million per unit cost is likely the most expensive publicly subsidized housing project in America on a per square footage basis. With the city as developer, the actual costs are likely to be 20% higher. There has yet to be any discussion about how this half billion dollar project will be funded and by whom, but a consultant just revealed that the target market is half for those already in subsidized housing who want to trade up, and the other half is for workers who currently live down valley who want to live closer to town.

Aspen has lost its way. Our biggest crisis is one of leadership. These off-season decisions in no way even begin to address the truly critical issues facing the community, many the result of unforced errors: a labor shortage due to little seasonal worker housing, horrendous traffic, no parking, the loss of childcare and class warfare. 

Not to be confused in any way with a merit-based pay increase, it’s time to dramatically change the compensation structure for our elected city officials. Today, our one-named tennis-teaching mayor makes just shy of $40,000 a year in his elected role. The others, an artist, a computer guy, a city market employee and Skippy, make just over $32,000. The hours are arguably long, therefore more enlightened members of the community are loathe to take on these roles given the paltry pay.

As we prepare for the March 2023 municipal elections and strive to entice qualified candidates to run for office and bring some new blood, experience and common sense to a body that desperately needs it, it’s time to raise the pay scale. We’ll be electing a mayor and two councilmembers. In government, you get what you pay for, and it’s abundantly clear that despite a $211 million annual budget, the city of Aspen is an absolute cheapskate when it comes to compensating its elected officials. Look what we’ve got. We can certainly afford to double these salaries. Let’s move beyond the discount aisle and attract some good candidates. 

Aspen deserves better. 

Are you interested in running for elected office in Aspen? Or do you know someone who is? Election season is fast approaching. Contact TheRedAntEM@comcast.net

ISSUE #220: Tourists, Go Home! (5/8/22)

"The critic said, 'But don't you feel awkward about biting the hand that feeds you?' and I said, 'No, I enjoy just gnawing it up to the shoulder.'"

-- Myles Horton

Have you heard of a Destination Management Plan? It's apparently the hot new thing for tourism destinations like ours, especially places that can afford outreach-intensive feedback-gathering by consultants who then tidy it all up into a useful workbook.

However well-intended, ours was recently presented to city council by the Aspen Chamber Resort Association (ACRA) that commissioned it. This well-respected civic organization that locally serves formally as both a chamber of commerce and manager of the Aspen visitor experience learned what many of us already have - that city council does not want feedback, they don't want proof of their failures and they certainly don't want to be reminded, however constructively, of them at all. Never mind there are some good suggestions in there.

Council showed their true colors on their thoughts about tourism, and these colors were not pretty. It spoke volumes about the increasingly fractured relationship between "locals" and those we rely upon for our economic existence.

Read my column in today's Aspen Times HERE.

Read the Destination Management Plan HERE.

* * * * * 

The Aspen Chamber Resort Association (ACRA) recently presented its 5-year destination management plan to city council, and, in short, it fell flat. The 36-page document is aggressive, compiled with a consultant to “coordinate management of all aspects of a destination that contribute to a visitor’s experience, taking into consideration the perspectives and expectations of local residents, visitors, industry businesses, the environment and local government.” The problem wasn’t so much the plan itself; I’m told all the hot tourist destinations are doing them. The problem is that ACRA bit off far more than it could chew.

You may ask, as I did, why Aspen’s chamber is attempting to take on such herculean tasks when many of these roles actually belong to the City. Clearly, the City has abandoned its responsibilities in favor of playing subsidized housing developer, enacting moratoriums, brainstorming new uses for the Armory, debating the entrance to Aspen and saving the planet from climate change. Therefore, ACRA, a hybrid organization that serves as a chamber of commerce as well as a destination marketing organization that serves to support the Aspen business community, attract visitors to the resort and enhance the visitor experience, attempted to herd all the cats into one ambitious plan.

With zero public policy-making authority, ACRA’s well-intended solutions to the issues our local government is neglecting were not particularly well received. But council did embrace the over-arching focus of the plan: despite tourism being the most important economic driver of Aspen and its surrounding communities, the plan is not about tourism. It’s primarily about local residents and protecting their quality of life from the onslaught and effects of tourism. Locals first, baby. 

Outreach on how Aspen can survive its reputation economically, socially, environmentally and existentially revealed ugly and alarming truths about who we have become as a community. Tourists are a nuisance. Residents dislike Aspen’s “touristy nature.” Tourism contributes to the loss of small town character. Some visitors don’t respect Aspen. New visitors are less considerate and have higher expectations. The off-seasons are shrinking. ACRA needs to develop “responsible tourism.” The city is too busy, there’s too much traffic, and more full-time residents are stressing our infrastructure. We need to educate our tourists. There is too much social inequity. You get the picture. This approach politically panders to an embittered local audience yet frighteningly bites the hand that feeds us. 

By advocating for community value-based efforts to address traffic, the environment, parking, and even housing, ACRA was hoping for collaboration with council around a common vision, but council gave ACRA a beat-down for highlighting their ongoing failures in each of these areas. Besides, council has no vision.

Council then displayed their irrational views of tourism and added their personal desires to what they strangely treated as ACRA’s “to-do” list. Ward Hauenstein stated that “we need a sustainable community more than we need tourists,” asserting, “We are over-visited at this point.” He wants “congestion pricing” and agrees with John Doyle that we need “climate action” immediately. Torre wants to “support employees” and Skippy wants “more money for workforce housing” reflected in our tourism policies.  This is typical of our business-ignorant council; when reacting to something they don’t like, they use the stick (or axe) to stop it in its tracks, rather than acknowledging its importance and finding a way to reduce the impacts.

Meanwhile, Rachel weighed in with rare wisdom, “ACRA needs to step up and start taking the side of the workers.” She’s right, it does.

Chamber-member businesses are dramatically affected by our labor and housing shortage. ACRA can and should be vociferous in its support of local businesses through unrelenting advocacy for workforce housing, specifically seasonal rentals, right-sizing and efficient management of our housing inventory. It’s time to join growing list of rational local voices in demanding an independent APCHA audit and a formal housing needs assessment before building hundreds of for-sale 3-bedroom condos at the Lumberyard for middle class families. ACRA’s powerful voice would dramatically impact the conversation. This is the low-hanging fruit. It is also the role of a chamber.

As for destination management, we may indeed be a victim of our own success, and it’s a good first step to stop marketing Aspen in the off-season. But if we’re really “too full,” perhaps it’s time to turn off the spigot by repealing the 2% lodging tax, 75% of which goes to tourism promotion. In the meantime, the plan will focus on niche, diverse and multi-cultural markets through value-based targeting and “passion-ography” that will attract travelers who “positively impact locals.” That, and scolding our visitors until they learn our model behavior. (Have we lost our collective minds?)

Businesses are encouraged to join ACRA in order to offer their employees a discounted ski pass. The chamber also produces iconic special events and provides vital visitor services. Attempting to reconcile the divergent expectations of local residents, visitors, industry businesses, the environment and local government in Aspen is a simple recipe to becoming council’s scapegoat for their growing list of public policy failures.  It is not the role for such a respected civic body. 

Are we incredibly fortunate to live in a world-class tourist destination or do we live in a community that we allow people to visit when it suits us? Contact TheRedAntEM@comcast.net 

ISSUE #219: Set for Life in APCHA Housing (4/25/22)

"Arrogance, ignorance and incompetence. Not a pretty cocktail of personality traits in the best of situations."

-- Graydon Carter

Plans for The Lumberyard continue, with great focus on paint colors. Last week's work session saw an arbitrary reduction in number of units "for livability," as well as changes to the units to include washer/dryers, free-standing bathtubs and walk-in closets.

One thing never discussed is how much this subsidized luxury village is going to cost, yet alone how it is going to be paid for.

This massive undertaking coincides with the final weeks of the moratorium on residential development and short term rental permits - council's identified culprits for all that is wrong in Aspen, never mind, the development of The Lumberyard stands to impact our town far more substantially.

Read my column in yesterday's Aspen Times HERE.

* * * * *

Ours is the oldest and largest mountain resort workforce housing program in North America.  According to its own description, “APCHA is an independent, multi-jurisdictional housing authority designed to oversee housing for persons of low, moderate and middle incomes who are permanent residents and work full-time in the city and county.”  But we all know it’s not just for middle and lower incomes, nor is it strictly for the active workforce.

Winning the ownership housing lottery is truly a life-changing event. Beyond the obvious roof-over-your-head benefits, there are surprising upsides to purchasing Aspen’s publicly-subsidized, deed restricted housing.

APCHA purchases are not subject to the RETT.  All property transactions in the city of Aspen are subject to a 1.5% real estate transfer tax, with 1% going to the housing fund. In 2021, the housing portion of the RETT hauled in $31 million. Yet, in-town APCHA beneficiaries don’t contribute and therefore have no skin in the game.

There is no income cap for RO Category housing. But a buyer’s net assets cannot exceed $2.445 million at the time of purchase. The “Resident Occupied” category was created so that higher income households (doctors, lawyers, architects, realtors) also have access to subsidized housing because of their benefit to the community.

You can convey your APCHA unit to your kid. If your kid is a qualified buyer who meets the one-person-per-bedroom-minus-one minimum occupancy requirement, for a $1,000 conveyance fee, your kid can avoid the bid process and lottery and you can simply transfer the ownership of your unit. With a documented 10-year local work history, the minimum occupancy is waived. 

After purchase, there are no income or asset limits. Once you own your unit, there is no requirement to maintain nor report your income or asset levels, nor must you maintain a minimum occupancy. A financial windfall, an inheritance and an empty nest are permitted, as long as you remain in residency and employment compliance. 

In-complex priority rewards those already in the system. After one year of living there, you can bypass the lottery to upgrade your unit within the same complex. If your neighbor has the same idea, whoever has the longer local work history gets the keys. 

You can work for Google from your APCHA unit. If you have a dependent and your spouse continues to work a minimum of 1500 hours a year for a qualified local employer, with residency compliance, you can take a job with any business anywhere and haul in the big bucks.

Your APCHA unit appreciates.  APCHA units increase in value using simple appreciation of 3% or CPI, whichever is less, per year, for each year the unit is owned. The long-term impacts of compounding appreciation results in significant payouts to those moving out while pressuring new buyers to pay above the category max, absorbing the cost despite their income limitations. By enabling owners to realize these capital gains, APCHA is driving the market for higher salaried employees to purchase housing. 

Your maximum sale price includes improvements. When selling, the formula to determine your maximum sales price includes purchase price, appreciation, and the present value of approved capital improvements, not to exceed 10% of the purchase price. Improvements for health and safety (energy efficiency, green projects) are exempt from the 10% limit.

You can retire in your APCHA unit as early as age 62. At 62, with a 30-year documented history of work including 15 years immediately preceding, you can retire in your APCHA unit. Otherwise, it’s 65, with just four years of local employment. As a retiree, while required to live at least 9 months of the year there, you can leave your unit vacant for up to 3 months with no requirement to rent it. 

The affidavit does not ask where you work or what you do. APCHA’s biennial requalification affidavit is online, so all you need to do is electronically check a box that attests to your residency and employment compliance. APCHA asks no questions about where you work or what you do.

You can own property outside the OEZ. Neither you nor your spouse may own other real estate within the designated Ownership Exclusion Zone: the Roaring Fork and Colorado River drainages. Beyond these boundaries, it’s fair game. That’s how we have owners of French vineyards and chateaus and Costa Rican beach villas in APCHA housing. Our tax dollars are supporting vacation homes in other resorts while the owners live affordably in Aspen.

We certainly do have a housing crisis. “The system” has evolved to specifically benefit those already in it, and provides advantages equivalent to those of the free market but at a deeply discounted, publicly-subsidized rate. The roaring real estate market in Aspen has undeniably driven up demand for subsidized housing, however, the ever-growing list of amenities and perks baked into the program should not be overlooked as a major contributor.  For those already “in,” they’re set for life. But the model is an unquestionably unsustainable social compact that warrants a serious philosophical discussion on a moving-forward basis, especially if we ever intend to actually house the workforce.

It’s a great deal if you can get it. Contact TheRedAntEM@comcast.net