ISSUE # 229: The S.S. Aspen: Ship of Fools (9/13/22)

"The Titanic hit the iceberg not because they could not see it coming but because they could not change direction."

-- Dean Devlin

Due to a scheduling SNAFU at the paper, my columns ran back to back this week. I will now be back on the every-other-Sunday schedule as before.

I had some fun with this one. Sometimes you just have to find newer and different ways to tell an important story in order to break through. This analogy addresses carrying capacity issues, worker housing, a high end travel product and the very obvious causes and fixes for the problems that have evolved over time in the absence of good leadership.

Read my column from Sunday's Aspen Times HERE.

* * * * * 

Royal Caribbean’s Wonder of the Seas, the world’s largest cruise ship at 1188 feet, has a maximum capacity of 6988 guests and 2300 crewmembers. The mega-ship has 18 decks and offers eight distinct “neighborhoods,” including a central park with 20,000 plants and trees. Aboard the ship are 40 restaurants and bars, offering diverse fare from homespun southern classics to rustic Italian favorites. 

In addition to the tallest water slide at sea, guests can enjoy a children’s playground, 1400-seat theater, a full-sized basketball court, ice skating rink, surf simulator and zip line, 10 decks high. The ship’s advanced wastewater purification system treats 570,000 gallons per day, complemented by a reverse osmosis desalination plant, glass crushers, a cardboard baller, aluminum can compactor and food waste pulper. 

This reads like a travel brochure, but it also sounds a lot like the S.S. Aspen. 

Docked at the eastern end of the Pitkin County pier, our mega-ship is home to 7700 permanent passengers who have chosen a unique albeit expensive lifestyle of adventure, eschewing life on terra firma to live where others only aspire to visit. This number is deceptive, however, because it does not reflect the ship’s capacity, which is far greater yet mysteriously unspecified. 7700 represents the full-time passengers (who reside on the various decks) and includes an unknown number of crewmembers, who earn wages and receive room and board in exchange for working hospitality and service jobs aboard the ship. 

Further conflating the 7700 number is a distinct class of “aspirational” passengers who have figured out how to “work” while onboard when not cavorting with the other passengers who are heavily taxed to provide them cabins on a subsidized basis. Their work is legitimate; they’re not on vacation on this pricey ship. But although they appear busy and generate income to cover their onboard expenses, many are in no way essential to the ship’s operations. They’re neither sweating in the engine room nor working the line in the kitchen, but unlike the crew, they’re regularly found poolside and in the casino in their off hours. They’re along for the ride at a deep discount, the unintended consequence of decisions made in a bygone era.

In this post-pandemic period of rough seas, however, the S. S. Aspen’s fragile onboard dynamic has shifted and a malaise is growing, threatening the delicate balance between the ship’s physical capacity, its ability to charge its paying passengers unprecedented prices for attractive onboard offerings and amenities, and the ship’s crew’s ability to deliver them. 

The ship’s officers say it’s because they’re understaffed and can’t hire sufficient crew, attributing this to a shortage of crew cabins, and speculating that these are being converted and sold to paying passengers and perhaps even allocated to the aspirational folks who covet the good life onboard.

Paying passengers, permanent and visiting alike, are boarding in record numbers, paying a tidy sum to do so, and are more demanding than ever. Every deck is full, even on the most expensive upper deck which is now the first to fill. No surprise, word is out and the wait is long for aspirational passengers who look on from shore and clamor to come aboard for a life of smooth sailing.

The aspiring passengers already aboard are the lucky ones, blending in seamlessly with the others and demanding the same high-end benefits and services: fluffy towels, frozen daquiris, Broadway shows and bottomless champagne, and further contributing to the overwhelming pressure on the already understaffed and overworked crew, among which morale is at an all-time low.

Before the S.S. Aspen hits the figurative iceberg, it’s time to turn this thing on a dime.

• ·      It’s a ship with finite space. We can’t build our way out of the problem. Time to rearrange the deck chairs.
• ·      The ship has a maximum capacity. We need to know it for lifeboats anyway.
• ·      There’s an ideal ratio of passengers to crew; it’s not arbitrary. Re-allocate the cabins accordingly.
• ·      The ship’s manifest is deliberately incomplete due to the willful ignorance of the ship’s officers. Take a headcount, even though some crewmembers don’t show up for their shifts anymore.
• ·      Prioritize the ship’s essential operations and the crew needed for such. These critical crewmembers should be given first dibs on crew cabins.
• ·      Identify the non-essentials: the non-performing crew and aspiring passengers. It’s time to phase out the outlandish benefits of a forever life onboard on a moving-forward basis. (Don’t worry, no one will be thrown overboard. But no one new will be allowed to come aboard simply because they want to cruise or be allowed to stay on because they once worked here.) Times have changed. Besides, it’s the only way to stay afloat.

Sadly, it falls to the ship’s officers, today, former crewmembers and aspirational passengers themselves, to save the ship. Their judgment is often clouded by the fact they’ve never worked anywhere else and are most troubled by making decisions that might hurt the feelings of non-essential passengers. It’s clearly time for new, more professional leadership. With political will and some tough choices, the ship can still right itself. 

Welcome aboard. 

We have a housing crisis but it’s not a shortage. It’s time to fundamentally transform our publicly subsidized housing program in order to save it. Contact TheRedAntEM@comcast.net

ISSUE #228: A Letter of Distrust to APCHA (9/7/22)

"A lack of transparency results in distrust and a deep sense of insecurity."

-- Dalai Lama

The level of distrust for APCHA, the Aspen Pitkin County Housing Authority, grows by the day, and I intend for this drumbeat to continue. The organization recently reported that "communication" is at the root of its problems. I disagree. It's FAR worse than that.

Read my column from Sunday's Aspen Times HERE.

* * * * *

Dear APCHA board and staff:

It’s true. The community does not trust you.  No amount of communication consultant’s work will change the fact that the Aspen Pitkin County Housing Authority is widely disrespected.  APCHA, a $3 billion asset, can no longer effectively fulfil its obligation to the community and instead operates as a rogue social welfare organization instead of a 3,127-unit publicly subsidized housing program.

Instead of supporting workforce housing, APCHA’s numerous conflated and antiquated guidelines and policies have resulted in a corrupt bureaucracy full of entangled carve-outs, exceptions and permissiveness. Your in-the-dark operations perpetuate an archaic status quo by rewarding bad actors, enacting bad policies and practicing bad governance when you practice any at all.

What should be the source of community pride has become a shameful entitlement program, festering with corruption, secrecy, bad faith and abuse.  In many cases, your own “rules” allow and even encourage this, so change them. As those whose job it is to administer a program intended to house the local workforce, you have betrayed the community by not adapting the program to dramatically changing times and ensuring its existence into the future.

• ·      APCHA is anti-worker. In order to qualify, one must live here for at least 4 years. Employers cannot enter the housing lottery to obtain housing for their own employees. Most units are sold vs rented, and it only matters on the day of closing where one works or the income one earns. (After that, you’re set for life.) Increasing income limits for renters already in the system continues to keep lower income workers out. 
• ·      APCHA operates in a vacuum with zero transparency. While legally an independent multi-jurisdictional housing authority, APCHA has conveniently become a secretive department of the city of Aspen.
• ·      APCHA enables abuse. Employment rules allow for “gig” work as long as it is performed from one’s desk in Pitkin County (think: Google, Lockheed). It is also perfectly legal to own a chateau in France as well as investment properties elsewhere. One can retire in one’s unit after just 4 years.
• ·      APCHA disrespects buyers of older units. The disgraceful case of 16 Ajax Avenue drags on, with APCHA still conniving to sell an uninhabitable, condemnable home to a local couple while passing along its original cost plus the costs of demo and reconstruction without increasing the maximum resale price for the new owners. The unconscionable communiques out of APCHA can be best summarized as “not our problem” when fault and responsibility lie entirely therewith.
• ·      APCHA ignores impending issues. Doing nothing will not stop the “silver tsunami” of retirees in subsidized housing, expiring deed restrictions and detrimental impacts of underfunded capital reserves throughout the portfolio. Nor will it make these go away. It just means one thing: even less housing for the actual workforce.
• ·      APCHA guarantees appreciation yet permits owners to sell abject slums. The guaranteed simple appreciation (3% or CPI, whichever is less) is intended to reimburse owners for unit maintenance over time. Have you seen the condition of the latest pigsty that had over 20 bidders? It is not rational to do anything but pocket the appreciation cash.
• ·      APCHA’s Hometrek database is a farce. Millions spent to design a state-of-the-art housing information system to enable public access to prices, rents, affordability, incomes, occupants and employers have been effectively squandered on what is now an inefficient staff database, lamely populated with useless data that is not available to the public, making clear that specific knowledge about the program is not a priority, even internally.
• ·      APCHA’s bi-annual affidavit is toothless and worthless. It’s simply an online check-the-box to affirm one works 1500 hours/year in Pitkin County. 
• ·      APCHA refuses to make the hard decisions necessary to save the program. It is well past time to audit the program. Data collection for a publicly subsidized program should have been collected annually all along. Ignoring the facts because residents are “fearful” is not responsible management. 

Today the community has a worker shortage and it is obvious why. By refusing to independently audit our housing inventory to learn who lives in our housing, their income and employment status, in order to inform future housing decisions, you are not just ignoring the problem, you have become it. 

In its current form, APCHA cannot survive.  It is set to collapse under its own weight with the “silver tsunami” that will remove over 1,000 bedrooms from inventory in the coming decade, over 300-unit permanent loss (representing 450 bedrooms) from upcoming expiring deed restrictions, plans for a $500 million expenditure to build 277 units outside the roundabout at the Lumberyard with little rental housing for the workforce, program-wide underfunded homeowners association reserves responsible for severely deteriorating inventory, the pending Burlingame Phase 2 $8 million construction defect lawsuit verdict and the mysterious Burlingame Phase 3 construction delay. 

This shameful chapter must end. If APCHA is ever to regain any semblance of credibility, it must be completely overhauled with a dramatically redefined mission and a new board and staff committed to new, transparent operations that provide much-needed housing, on a moving-forward basis, for Aspen’s actual workforce. 

Sincerely,

Your neighbors who paid the RETT

Aspen, CO

Got an APCHA horror story? I protect my sources. Contact TheRedAntEM@comcast.net

ISSUE #227: Self-Dealing in Aspen's West End (8/15/22)

"When politics is no longer a mission but a profession, politicians become more self-serving than public servants."

-- Emmanuel Macron

I've been traveling and apologize for the delay in getting my column from Sunday's Aspen Times to you. HERE it is.

If you've been following the STR tax debate, the latest is that city council is hurriedly trying to craft language for the November ballot, despite not agreeing on who or what they want to specifically tax, how much to tax and to what end. Read more HERE.

Yes, the good news is that our next municipal election is on March 3. I can assure you of a robust campaign season in which you can become personally involved. Stay tuned. THIS letter to the editor illustrates exactly what I'm thinking. 

And to all second-homeowner subscribers - What is your interest in a dedicated advisory group? Snowmass Village has just enacted one and I think Aspen would benefit from the same. Please let me know.

* * * * *

The city’s latest boondoggle stands to capitalize on the new land use regulations that permit the development of multi-family subsidized housing in all zone districts. 

On July 12, the city approved the voluntary historic designation of the unique 1950’s-era Swiss chalet and two out-buildings on an 18,000 sf lot at 949 W. Smuggler in the West End. The long-time owner approached the city to voluntarily historically designate the property in exchange for a lot split (into two parcels, 10,000 sf and 8,000 sf, where the 8,000 corner lot could be sold) and a variance to relocate an existing structure.

The Aspen Modern program, the voluntary designation of significant 20^th century historic assets as determined by HPC, enables an owner to negotiate variances and other concessions from the city in exchange for formally designating a property as a historic landmark.

The benefit to the community in this instance is the preservation of a truly historic asset. HPC agreed, approving the proposal, however, in the process, they identified unusual and seemingly unethical “right of first refusal” language that would exclusively enable the city to purchase the newly-formed 8,000 sf corner lot. HPC ordered this condition struck from their resolution. It’s in the minutes. But two weeks later, the city reinserted an “exclusive 30-day window to negotiate with the owner” back into the proposed ordinance for council’s approval. 

The city’s interest in the 8,000 sf lot in the West End, previously zoned R-6 for single family homes and duplexes, should come as no surprise. Now that housing can be developed anywhere in town, the city likely wants this parcel for a multi-family subsidized housing development. Neighborhood character, parking pressures, public feedback, mass and scale be damned, these are the new rules.  Thankfully, the owner is not compelled to sell to the city. But should they reach an agreement, we’ll likely see Ordinance 13 in action, and an indication of how devastating its city-wide impacts are soon to become.

Many questions surround this revelation of the city negotiating favorable circumstances for itself. Where did the “first right of refusal” originate? Who over-rode HPC when the designated deciding body struck it? Why should the city have this undue advantage? Such conditions have no place in Aspen Modern negotiations. This proposal was an obvious “yes”; a straightforward win-win for the owner and the community, but the city has managed to muddy the waters. The 30-day exclusive negotiation window begins soon.

There is interesting case law that relates to the city’s questionable tactics. Koontz vs St John determined the government is liable for “a taking” when it withholds a permit until the landowner agrees to dedicate personal resources to a public use.  Landowner Koontz requested a permit of the St John Wastewater District to develop some of his land that was designated as wetlands. St John had jurisdiction and agreed to issue the permit on the condition that Koontz place a conservation deed on the rest of his property and to do some mitigation work in the form of funding improvements to nearby government-owned land. Koontz agreed to the deed but not to the mitigation work. St John denied the permit application.

Koontz sued, citing the Takings Clause of the Fifth Amendment. A trial court found in favor of Koontz and the Florida appeals court affirmed. Later, the Florida supreme court reversed. In 1994, in a 5-4 vote, the US Supreme Court granted certiorari, holding that the government may not conditionally approve land use permits unless conditions are connected to the land use and are proportional to the effects of the land use. Such demands (asking for property or money from an applicant) place an undue burden on the applicant which diminishes the land’s value

and violates constitutional protections against having property taken without compensation.

In our case, the property owner got what he asked for and only had to agree to a special negotiation period, not a sale, so a lawsuit is unlikely. However, the sketchy initial “first right of refusal” and later exclusive 30-day negotiation window definitely sound like a bribe. “If we approve this proposal, then we get first dibs on the new lot. And now that we can build subsidized housing on any lot in any zone, and since we don’t have to mitigate or pay fees like everyone else, and since we can pay any price you ask with public funds, we’re your buyer.” 

Ordinance 13 is set to impact every vacant lot in the city. The city is the only developer willing and able to build subsidized housing when the numbers don’t pencil.  Worst of all, the surrounding neighborhoods will sadly bear the long-term brunt of this newly permitted development, including the associated decrease in property values.

The voluntary historic designation of 949 W. Smuggler should have been a straightforward victory for the owner and the Aspen Modern program. But the city’s self-dealing adds an unfortunate asterisk. It’s hard not to see the true motives of a punitive government that seeks to redistribute wealth by devaluing neighboring properties and, in so doing, destroying neighborhoods.

And they’re coming to a vacant lot near you.

The city’s agenda appears very different from the community’s. What is going on? 

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