ISSUE # 9 ... OWN AN ASPEN CONDO? TOWNHOME? HEAD'S UP ... AND QUICKLY!

The Red Ant is scratching her head. A vortex is spinning and we're now in it. We've heard a lot these past two days from many of you asking about proposed Ordinance #22 - next Monday night's hot topic at City Council, which, if passed, is slated to become law thirty days afterward.

In short, Ordinance 22 seems to update an old law that stipulates affordable housing mitigation for the redevelopment/demolition/ combination of units of "multi-family dwelling units." The effect is to make it almost impossible to redevelop/demolish/combine a condo without building affordable housing on a 1-for-1 basis.

Build A Worker's House FIRST-then Rebuild Yours

Let's say that your condo building is aging and needs redevelopment (an undefined term), or partial demolition (anything over 40% of the walls torn out). Before you can rebuild your unit, it appears that you must FIRST build an affordable housing unit to be controlled by the City---in most cases on your condo site.

The flawed theory is that by redeveloping an older condo property you destroy potential housing for a "local worker," and should have to replace that potential worker dwelling BEFORE you can build a free market unit. (Never mind that the economic logic is insane.) The same punitive measure is required if you attempt to enlarge your unit by combining with a neighboring unit. You must FIRST build an affordable housing unit (which will be anything BUT affordable for you)!

Maybe your neighbor combines two smaller units to make a larger unit. He may be forced to put an employee unit on your common site. Depending on your HOA restrictions, this could be a complex mess.

What?? Impossible. What about your property rights? We thought the same thing. It is clearly not economically viable. It makes redeveloping condo property impossible. Apparently, that's the point. Not to mention the depressing impact on condo values.

The Proposal That Makes Us Nervous

Here is the official Ordinance #22 proposal from the City's website for all of you who, like us, are just hearing about it: The City Proposal--click here At least during the first reading in August, Council requested an array of additional options to be considered on Monday. These options are included in the document linked above. The Exhibit C memo in the packet came to Council from an affected homeowner. It may contain some factual errors, but the general concerns seem appropriate, and have served to draw needed attention to this proposed measure.

Seems the law has been around for a long time, but has been apparently easily navigated through vague "exemptions" in the past. These exemptions to the rule of having to match units demolished or combined with new affordable units before building new free market units (at the same location) were easily obtained. Now, the City wants to better define (and presumably reduce) these exemptions and begin to enforce the regulation. Many definitions are still fuzzy - we're giving them a close look.

The City bills this technically as "loosening" the old law by creating clear exemptions. We are nervous that, in practice, the effect could be quite the opposite.


Why???

No doubt that affordable housing for the workforce is a problem in Aspen. The current City Council has an almost blind zeal to address the issue. Today's Aspen Times reports on long range planning efforts being undertaken. Note the emphasis on the increase in free market housing and concern about affordable housing.
http://www.aspentimes.com/apps/pbcs.dll/article?AID=2008809169953
Measures such as Ordinance #22 seem designed to address the trends that concern the Council.

Checking With The Pros

Some of our readers who are real estate professionals see the legislation as outright violations of private property rights. (How can the city tell a townhome HOA that a major renovation - more than 40% of the structure demolished - must include a 100% match in bedrooms converted to affordable housing ON SITE before the replacement of the original free market units?) Others tell us that Ordinance 22 merely clarifies the distinctions between demo projects where affordable units MUST be built and others where they don't. (If you can prove that a local worker - another undefined term - NEVER EVER lived in your unit, then it's exempt from the rule.) Regardless, the economics seem punitive.

Yes, we're confused. But we're wary too. The City's obsession with the increased value of free market properties that at some point in history housed local workers concerns us. We're not entirely clear on the ramifications of Ordinance 22, but we don't like the notion that whether a locally employed person ever rented or owned your unit is a defining issue in your permission to demolish and re-build your unit. Also the fact that the burden of proof that employed citizens did not live in your unit is on you. It is hard to prove a negative!


While we generally like to tell you what we think, this time around we're asking. What's your read on Ordinance 22? Does it go too far? Should the City really be able to stipulate that "multi-family dwellings" in Aspen be responsible for 1-for-1 affordable housing unit construction (on-site) when it's time to re-build their aging structures? We'd love your thoughts. And if you're a condo, townhouse or "multi-family dwelling" unit owner, you may want to hear what your real estate advisor and/or attorney has to say. We'd love to hear, too. Share your comments on our blog at www.TheRedAnt.com to enhance the collective knowledge.

We will learn what we can and report back before Monday's 5 p.m meeting. Make plans to be present, or send your local representative. This is likely the only public hearing on this matter.

Please pass this along to friends who own condos and townhomes here.

Comments

[Andy Modell]

red ant

at first blush, the concept of building employee housing is always a laudable desire

equally important is the upgrading of our current rental inventory to remain competitive in the industry

by doing so adds dollars to the community in terms of employment

second we have units that are more marketable and desirable, thus encouraging a strong rental market that generates sales tax revenue to the city

everyone has limited budgets to work with

a second home will only command so much in terms of upgrade investment on the part of the owner

to further encumber an owner whose efforts will benefit the community in attractiveness and sales tax revenue will alienate the owner and likely create too much of a burden to the owner and inhibit their intentions of proceeding with a re-model

better to ask how can entice them to contribute to an employee housing fund, affordably, proceed with their plan so as not to impose a financial burden and create a win win scenario

perhaps a fee of 5% of the construction costs paid over a two year time frame into a fund for employee housing...not administration but actual acquiring of property and building the project

an added incentive would be the knowledge that the housing would be built by private contractors who will have tax incentives and employ local workers

build an apartment of 1000sqft per apt, cinder block or factory built units, 300-350 cost per sqft, 350000 for 10 units....

i built two spec house, standard method five years ago at a cost of
335 per sq ft...stone, copper, etc

semerau bult them. this excludes the land cost but the city has the land. get the gov't out of the process and have them managed privately under emp housing guidelines....maximize the cities property and the funds come from an affordable payment from those that want to rebuild

this can be done

run it by dwayne and tim and jon olsen...he has a company that builds pre-fab homes...the cost is just over 100 per sq ft...the balance for amenities, finish, etc