ISSUE #78: Get Me An ANTacid!

"Government is not reason, nor eloquence.  It is force.  And like fire, it is a dangerous servant and a fearsome master."         -- George Washington

"The sheep are happier of themselves than under the care of wolves."      -- Thomas Jefferson

BIG BROTHER AND YOUR VACATION RENTALS  

Ever rent your Aspen home? Ever think about it? Well, think again. In the latest chapter of government over-reach and the war on private property, council just passed Ordinance 34 ostensibly because said ordinance "furthers and is necessary for the promotion of public health, safety and welfare." What?? The city will now regulate "vacation rentals," defined as "the short term occupancy of a residential dwelling unit by the general public for a fee." This "regulation" mandates that anyone who wishes to rent out his/her private property must now obtain an annual business license ($150) and apply for a vacation rental permit. A local owner representative (read: paid property manager) must be "on call" during the duration of each and every rental. Vacation rentals are also required to collect and remit all applicable sales and lodging taxes. And yes, the community development department will be conducting periodic audits to ensure compliance.

How did this come about? Allegedly, the requirement to pay these taxes has been on the books since the early 90's, although no one seems to have been made aware of it. And it seems that there are several "rogue" properties in town where renters disobey trash procedures, parking rules and are neighborhood nuisances. (There have been five, yes five, complaints over the past four years.) Staff originally proposed limiting the number of times a property could be rented, depending on its location. Councilman Adam Frisch hit the nail on the head, calling this "a solution in search of a problem," although he did in the end vote in favor of the ordinance. Go figure.

Instead of addressing how to deal with problem rentals, the answer was to regulate and monitor ALL rentals of ALL private properties. Staff and other city resources are not capable nor desirous of dealing with neighbor complaints about the behaviors of renters; early discussions speculate that the city will not "enforce private covenants" by dealing with scofflaws.  It's all about squeezing the local private property owner - simply because they can. Imagine the new city bureaucracy that will be needed to track down and monitor the hundreds of private vacation rentals each year! It will surely cost far more to administer than the $100,000 it is expected to bring in. 

The following is an articulate letter written to the paper by local resident Maurice Emmer on the subject. I whole-heartedly agree with his list of the unforeseen yet inevitable consequences of the ordinance:

Dear Editor:
According to the papers, Aspen City Council is considering new restrictions on short-term rentals within residential areas of Aspen. I think the promoters of any government regulation should have to satisfy a very high standard of compelling need for the regulation to advance an urgent public policy. Otherwise, we reach a place (we probably have surpassed that place) where people feel government is there to suppress rather than to protect them. I am unaware of any compelling need or public policy urgency in this case. Because I understand the basic, unavoidable laws of economics (i.e., human behavior); however, I can predict some of the inevitable consequences of such restrictions, including:

1. Real estate values in the residential areas of Aspen will be reduced marginally (the fewer potential uses for property, the lower the value), and values will increase marginally outside the city limits, especially in areas closest to town.

2. Restricting the supply of short-term rentals in Aspen will increase the prices of such rentals, driving some business outside the city limits and even to other resort destinations.

3. More homeowners in the residential areas of Aspen suddenly will find they have more "guests" from out of town rather than formal renters. (Additional legal restrictions invite additional scofflaws.)

4. The city will have to choose between (a) spending additional resources on rental police to enforce the restrictions, intruding further into people's personal business, or (b) ignoring rampant disregard for the law.

5. Future potential purchasers of property will have another negative factor to consider when weighing a purchase in Aspen vs. elsewhere.

If City Council believes the above inevitable consequences of rental restrictions are in the best interests of Aspen, they definitely should support the tightest restrictions they can possibly think of.

This, folks, is what happens when we elect a government comprised of 4/5 subsidized housing dwellers. (Only councilman Adam Frisch owns a free market home.) The four, desirous of leveling the playing field at every turn, cannot rent out their deed-restricted subsidized housing for extra cash, so they want to make it cumbersome for you to do it. It's only FAIR, right? Good grief.

DOWNTOWN DOWN-ZONED

Hate to say "I told ya so," but as predicted, council passed a two-story height limit for downtown construction in a special meeting on Monday night. The mayor ignored staff's suggestions and presented a package of amendments that HE preferred, stating that staff's recommendations did not go far enough. Also banned are single-family homes and duplexes, but condos will be considered if enough subsidized housing is provided to soften the deal. The mayor hates the free market, and deems re-development projects that include high-end residential on the third floor "penthouses on stilts" because these buildings "drive up real estate prices and out-compete more modest and desired restaurant and retail businesses."

When a senior SkiCo official commented that Mick's amendments were being expedited without thoughtful review, Mick came unhinged and snapped, "I'm not here to be cross-examined." And his lackeys Torre and Skadron went right along with him, both of them DYING for his endorsement in their 2013 mayoral bids.

The dummies just don't understand the economic realities: it's unrealistic to expect new mid-priced (tourist) retail, restaurants or lodging to be built in the downtown core because land values are simply too valuable for anything other than high-end rooms and businesses.

Ahh, but how funny. The law of unintended consequences is sharpening its teeth. Seems the rush is on for building permits before the new law takes effect early next month. We're about to see a crazy building boom (albeit short-term) as a result of these new restrictions. Development will abound, likely to include: a new building at the Bidwell Building site (Galena and Cooper), a penthouse atop Boogie's, a new building with penthouses to replace the Zocalito building on the Hyman Ave mall, a new building where the Gap currently stands, a 3-story residence behind Susie's on Hopkins Ave, and a third-floor penthouse atop the Aspen Athletic Club building as part of a voluntary historic designation deal. When these and the others that beat the clock are eventually completed, the boom days may be over for some time. This new land use code will make any new development in downtown Aspen economically prohibitive.

SUBSIDIZED HOUSING: ENFORCEMENT AT LAST?

Could it be the new presence of respected locals Bobbie Burkley and Rick Head on the housing board that brings a hint of sanity to the beleaguered organization? I certainly hope so! In recent weeks, two notable eviction issues have come before the board. A renter at Truscotte Place was bounced for non-compliance - she is unemployed and the housing rules mandate that residents work 29 hours a week (1500 hours/year). The second concerned a resident who owns her deed-restricted subsidized housing unit, and she has not worked in 4 years - the first two due to health issues and the subsequent two based on the difficulty of finding a job in this economy. This resident has been given until July to find qualifying employment or she will be forced to sell her unit.

Cries for "compassion" abound. A Sheriff's deputy went on record saying he is "ashamed to be associated with the county" now that APCHA is enforcing its own rules. Letters to the editor call for reprieves all around, given the economy. But the cable company doesn't wait, so surely that bill is being paid. Same with VISA. And the cell phone. Why should subsidized housing in Aspen be THE entity at the end of the list that is expected to bend/break its own rules?  

Notably in both cases, the residents both cried "witch hunt," citing "so many others" in the program who also violate the rules. The fact is, APCHA is rife with corruption and non-compliance. And we've got to start somewhere. Kudos to the APCHA board. The rules are the rules - thank you for enforcing them! There's plenty more work to do.... Keep it up!

But the best has been the recent outcry from the Aspen Homeless Shelter. They believe APCHA is "contributing to homelessness in the Aspen area." What??? Yep, the director there compared the "housing system to a college campus where one can't keep housing without staying in school." It's actually a very good analogy. But then he went on to characterize our subsidized housing program as "21^st century feudalism" where housing residents are treated "like chattel," ruminating whether Aspen is "a community for rich people and people willing to work 29 hours a week to serve them? Or is this a place that people can come to live." (Puh-lease!) Well, the answer is simple: BOTH. If you work, you can keep your housing and live here. Besides, Aspen is a service economy so many jobs are service industry jobs.  The government therefore provides subsidies to keep the housing costs well below what the market will bear.

Government-subsidized housing in Aspen is a PRIVILEGE, not a RIGHT.

An easy solution: The Red Ant has recently acquired a spreadsheet that outlines the subsidized housing inventory at each of the projects in the Aspen Pitkin County Housing Authority (APCHA) portfolio. I've been asking for this info for years. Interesting: there are 1429 "owned" units. The spreadsheet is vague at best, but it's a start. For example, Lone Pine condos, built in 1980, has 28 units.   Next, it would make sense to list those 28 units, with the owner of each and where he/she works. It is, after all, public information, just like voter registration. How easy would that be? Very. A simple new column or two on the existing spreadsheet, updated by APCHA each time a unit changes hands or a resident changes jobs, and posted on the county website. Think of the self-policing that would occur. It would be right there, for all to see. Nothing to hide? Nothing to worry about.

RIDDLE ME THIS: SUBSIDIZED HOUSING "MITIGATION?" REALLY?

Just a thought, but as our local governors continue to restrict free market development, they consistently DEMAND subsidized housing "mitigation" for each and every project. This, in the face of the lowest demand for subsidized housing in years and a system filled with non-complying residents. Call me crazy, but in an environment where there are far more subsidized housing dwellers than there are local jobs, why are we punishing property owners and developers, and why on earth are we building more and more government-subsidized housing? One would logically think that anyone who brings jobs to town (through construction, development of retail/restaurants/etc.) should be REWARDED for such behavior. But no. Not in Aspen. Somehow we still demand housing mitigation for more and more people who cannot find work here and cannot afford to eat/shop/live in what the Wall Street Journal deemed "The Most Expensive Town in America." (3/4/11)

MY RIDDICU-LIST: THE "YOU CAN'T MAKE IT UP" FILE

It was classic. In a March 12 council discussion of how to fund the purchase of some new mowing equipment for the golf course, it was noted that the golf course would be better off borrowing the needed funds from the city because the city would charge a lower interest rate than the open market. The buffoons on council began giggling at the thought that they could "make money" by charging interest, clearly not understanding that they are the ones who also PAY that interest. Yep, this is what happens when we elect perfect idiots to serve on city council. They actually think they can MAKE MONEY by charging themselves interest.

NOTABLE QUOTABLE

In defense of the city's recent commitment to move ahead with spending $9.2M (plus a $1.2M contingency that will surely also be spent) on the "infrastructure" for Burlingame 2 despite questionable need or demand, mayor Mick evoked Caesar in his hifalutin statement justifying the build-out of the huge government-subsidized housing project: "Good governments react to circumstances as they confront them. The really great ones, the great cities, anticipate those things and are prepared for the future." Puh-lease. In reality, Mick is more like Nero, who fiddled while Rome burned.

CORRECTION: AACP COST $1.37M, NOT $500K

The Red Ant is loathe to disseminate false information. As such, I must correct a recent report that the Aspen Area Community Plan (AACP) cost $500K. This is not true. The half-million dollar figure merely represented the costs of "existing conditions" reports ($228K), the initial public process ($225K), advertising and special tv taping ($22K), planning & zoning review meals ($4K), and a secondary public process ($23K). Omitted from the initial report were the estimated 15,000 hours of staff time spent on the AACP. According to a planning & zoning report received by The Red Ant, at a basic averaged amount of $58 per hour (includes salary and benefits for the various staff who worked on elements of the plan), that's $870K in staff resources.

Therefore, the $502K spent on studies and consultants plus the $870K in staff time brings the grand total cost of the AACP to at least $1.37M of YOUR MONEY.

MICK: A TAX SCOFFLAW!

Our mayor, a self-proclaimed and erstwhile "tax attorney" is afoul of the law. The Red Ant submitted the following letter to the editor of both papers, but neither would print it. They both need to protect their boy Mick.

To the Editor

The Aspen mayor's compensation is set by ordinance at $2325 per month, or $27,900 per year.

Mick's summer 2011 boondoggle to Europe, for which he requested and received $2418 in expense reimbursement, was not shorter than one week in length, nor was more than 75 percent of his time dedicated to official business purposes of the city of Aspen. It is unlikely that Mick could document to the satisfaction of the IRS that a personal vacation was not a primary consideration in the decision to travel. According to Title 26 of the Internal Revenue Code, the $2418 then constitutes taxable income to the mayor. It does not qualify as nontaxable reimbursement for business-related travel.

Since the mayor's controversial expense reimbursement request was granted by the city, it increased the mayor's 2011 taxable income from the legally authorized amount of $27,900 to $30,318. This fact arguably places the mayor and city council, and city manager Steve Barwick (who signed the check), in violation of the law for permitting compensation of an elected official in excess of the amount permitted by the city's municipal code.

The $2418 in income did not show up on the mayor's 2011 W-2. I checked.

Aspen's Sister Cities non-profit publicly confirms helping "arrange" Mick's trip and even threw in $500 in mad money. I would hope this group would eagerly provide the necessary documentation to demonstrate that this travel meets the IRS guidelines for its tax-exempt mission. Let's see it, because it serves no tax-exempt purpose for a 501c3 organization to pay a private citizen $500 to go on a European vacation, which, according to the Internal Revenue Code, is precisely what Mick's junket was.

In the interest of public trust, and given the opaque manner in which this issue was communicated to the community, taxpayers deserve complete transparency. Citizens also deserve to know what "gifts" the mayor mailed back to the U.S., as documented in his expense reimbursement request, and how said gifts benefit the city or the Sister Cities non-profit. Otherwise, those gifts may also constitute taxable income. 

Who on city council is brave enough to stand up to the mayor and demand that he comply with the tax code? My guess is no one. Holding elected officials accountable for how they spend public money, particularly at the intersection of personal benefit and public purpose, which is where the real issue resides, is paramount to ensuring trust in our governmental system.

Is it avoidance? Is it evasion? As Denis Healey once said, "The difference between tax avoidance and tax evasion is the thickness of the prison wall."

A RED ANT PILGRIMAGE TO THE PEOPLE'S REPUBLIC

No, I won't be submitting my travel receipts for reimbursement from the public coffers, but my upcoming trip to China will likely be more of a "Sister Cities" trip on behalf of the People's Republic of Aspen than any bike ride through Europe undertaken by our greedy lame duck mayor last summer.

Besides, I need a break -- I'm simply horrified by the direction we're headed.

Yes, this is a call, one year out, to eligible candidates for office. Eligible. As in knowledgeable. And God forbid, educated. And dare I say, business-minded? And let's get a few private property and/or business owners up there, just for kicks. Mick will be gone so the tenor of the meetings will change dramatically. It's clear that Torre is gearing up to run for mayor. Lord help us. But should he fail, he'll be off the table. Skadron too will run - he has nothing to lose, given that he'll still have 2 years left on council. But really, folks. I know this community is WAAAAY in to recycling, but can't we do better? This is indeed a call-out to grown-ups in our community. PLEASE step forward and serve. Mayor or council - the 1/5 vote is the same. Dwayne? Will you think about it? Mike Maple? Your life-long residency and intelligent contributions on so many local issues position you tremendously to lead. Ward Hauenstein? Maurice Emmer? Your leadership with the hydro plant petition showed the community how you can uniquely build consensus across diverse groups. Off the top of my head, those names came up. There are many others. Leaders AND listeners. The potential is there. We CAN do better. And the community deserves FAR better than what we've got. We're a year out. Time to start thinking. I certainly don't have to be involved in your campaign, but consider me a resource. If you are thinking of challenging any one of these guys, please let me help.