ISSUE #270: Post-Vacation Musings (2/25/24)

"You can never really own real estate for instance; 

if you think you can, just try not paying your property taxes for a few years."

-- Michael Maloney

Apologies for the brevity of this installment, but I have been traveling overseas and decided that updating you on a few things I am thinking about would be preferable to simply skipping an issue. So let's dive in... Property taxes. How'd those pan out for you? I've heard the average Pitkin County property tax bill increased 27%, but anecdotes are of course all over the board. The county is implementing its first-ever property tax relief program targeting residents with household incomes below 500% of the federal poverty level using $200,000 from the general fund to dole out rebates in $2000 increments. It caught my attention when I learned that thankfully "APCHA-aligned" properties are not eligible because their tax increases are "already capped." But what on earth does that mean? Why wouldn't APCHA housing be taxed like everything else based on assessed value? Capped. Hmmmmm. With the help of a colleague, I did some cursory digging just to get a handle on what's what. Nothing personal against Kelly McNicholas-Kury of the BOCC, but I looked at her APCHA property first. (She lives at Burlingame in the city and is a county elected official who sits on the APCHA Board - a perfect subject, that's all.) Her property taxes in 2022 were $647.08, but in 2023 these decreased 32% to $438.96. Curious. She paid $266,619 in 2021, yet her actual value in 2022 was $254,000 which further decreased 14% to $217,600 in 2023. The assessed value also decreased year-to-year.  How do Burlingame units decrease in value when all other property values in Pitkin County increased dramatically? A great question for the assessor, right? "You would need to talk with APCHA about the deed restricted properties. We get the list from them and just enter in the amounts they tell us." WHAT?!?! For free market properties, the assessor values the subject property using comparable sales during the 18 month period prior to the valuation, but for APCHA properties, APCHA just submits a list of valuations to the assessor?!?!? Based on what? And who specifically compiles and submits this "list"? Clearly, the result of this non-transparent policy has resulted in the shift of EVEN MORE of the already substantial property tax burden from the subsidized housing sector to the free market. (Recall that my earlier investigation into Torre's sketchy real estate purchase yielded another anomaly with APCHA and the assessors office: APCHA reports the amount they sell units for but they do not report what they pay for them. These two instances where the county assessor blindly does what APCHA tells her to do can and should easily be tightened up in the name of transparency. Why the secrecy???) I'll be chasing this one down! "More housing" through buy-downs. Ugh. Thinking they're great leaders and because money apparently grows on trees at the county (see property tax increases, above), the BOCC has recently committed TWO MILLION DOLLARS to the West Mountain Regional Housing Coalition, a brand new non-profit seeking to solve the scientifically unverified regional housing crisis. (The coalition relies on numbers from a 2019 debunked housing needs study that the consultant admits did not use a scientific formula to support its conclusions.)  The BOCC is all pumped up to support the buy-down of free market homes purchased in the region for $1.5 million or less by people (with no income cap) who will make these their full-time, primary residences and won't own residential property anywhere else. The coalition will provide up to 30% of the purchase price in exchange for the buyer deed restricting the property in perpetuity. Crazy, huh? Especially when there is no mention of where or even if these potential beneficiaries will work in Pitkin County. And just who is going to handle compliance? Don't say APCHA. We know how that will go. None of this has been worked out yet, but the county is all-in solely because such buy-downs represent housing solutions without development! But the $2 million ($1.2 million from the American Recovery Plan Act that must be spent in 2024, if it's even legal to spend it this way, and the balance from the county's housing fund) is expected to only yield 5 to 7 homes in year one. FIVE to SEVEN. What a complete joke. I'll be watching closely as details come together, but best I can tell, there was no discussion of where the money, if any, will come in years two and beyond. In fact, there was suprisingly little discussion for an expenditure of this size - amazing given all the issues with APCHA and zero political will to admit or address any of these. Entry level home-buying. Only in Aspen is the "entry level" $1+ million. But keep in mind that the already tight market for free market housing below $1.5 million is now set to get even tighter with the buy-down program. The Aspen schools have been on a buying spree with their 2020 bond proceeds while the city of Aspen outbids most buyers while building its own proprietary housing portfolio by targeting these exact units. Good luck to the first-time homebuyers and businesses seeking units for their employees - the competition at the low end of the market is about to get fierce and you know what that means for pricing. I'd like to put together a tracker on the entities buying up such properties. As always, more to come. EM