ISSUE # 71: RampANT Abuse in Subsidized Housing
December 1
"Subsidizing the markers of status doesn't produce the character traits that result in that status; it undermines them. It's easy to see why. If people don't need to defer gratification, work hard, etc., in order to achieve the status they desire, they'll be less inclined to do those things. The greater the government subsidy, the greater the effect, and the more net harm produced."
--- "Philo of Alexandria," 2010, blogger
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SUBSIDIZED HOUSING: THE BIGGEST "GAME" IN TOWN Despite recent news of an unprecedented glut in local subsidized housing inventory, and ongoing record levels of foreclosures in the working-class neighborhoods of the mid-valley, the city of Aspen's plans for 167 more subsidized housing units at Burlingame phase 2 continue. There is $7.2 million proposed for infrastructure construction at Burlingame in the city's 2012 proposed budget. And the city is even planning to lease excess seasonal rental units at Burlingame to the Aspen Valley Medical Foundation for use by the local homeless. Remind me again why we need more subsidized housing?? Over 200 people have signed up for subsidized units at Burlingame 2 on the no-risk waiting list, but to-date, just 22 are both APCHA and bank loan pre-qualified. Council has indicated though that with 60 pre-qualified buyers (who still won't have to commit - financially or contractually), they will likely give the go-ahead to begin construction. Even if the plans are delayed a year, the city will spend $1.9M in 2012 "planning" Burlingame 2. In the meantime, the city is currently running half-page 4-color ads in the local papers, imploring those interested to "Do your part (get qualified with APCHA and for a loan) so we can start digging in 2012." Shameless. This is all before city council's promised "strategic review" of subsidized housing, allegedly an in-depth analysis of critical issues facing the program, including: retirees in housing created for workers, governance of the program, and the government's role in HOA solvency issues, among others. It seems that the bureaucrats at city hall simply intend to steam forward despite the economy, the enormous excess housing inventory and all matters of better judgment. *** I've been planning a multi-issue expose on housing, and there's no time like the present to launch it. Reader's Tip: In early 2009, Issue # 22 of The Red Ant "Affordable for Whom?" outlined the subsidized housing basics. I don't plan to bore you by repeating them. Please take a minute and glance back through that installment to refresh your memory on how subsidized housing works around here. The one key point is to recall that two-thirds of the 1.5% Real Estate Transfer Tax (RETT) goes to the subsidized housing fund. If this money was not thus dedicated, we would not be having this discussion. However, the use of "other people's money" has made it far too easy to be careless with this particular "marker of status." This issue will simply whet your appetite for what's to come, and several issues that follow (schedule to be determined by the events of the day) will explore and expose the corrupt underbelly of our subsidized housing program, focusing primarily on the ineptitude of the Aspen Pitkin County Housing Authority (APCHA), its board and its rules, and demonstrating through blatant mismanagement, negligence, lack of proper oversight, and special favors for special people that the program is the embodiment of the law of unintended consequences. In short, we need more subsidized housing like we need a hole in the head. I am often challenged on my disdain for our subsidized housing program. It's true, I think it stinks. This fabulous community asset has been so horrendously mismanaged since its inception that gaming the system has become the rule vs. the exception, and as many subsidized housing complexes find themselves horribly underfunded for ongoing and deferred maintenance, it becomes ever more clear that the program was doomed from the start. The continual answer to compliance problems is simply to build more housing; somehow non-compliant dwellers and those who constantly want to move to newer units are seen as indicators of legitimate demand for the construction and funding of more and more units. The telling quote of the decade related to the substandard maintenance of subsidized housing came from former city councilwoman and Housing Frontiers Group member Jackie Kasabach, who asserted (4/18/11), "Nobody thought about it... that this program (subsidized housing in Aspen) would last 30 years and that these buildings would need to be maintained." (It's a naive perspective for sure, but indicative of how many residents of our subsidized housing projects actually think!) Of course nobody thought of it. And there's a long list of other things nobody thought of. Such as selling homes to people without explaining the responsibilities of home ownership (like paying association dues), and turning these multi-million dollar public housing complexes over to residents to manage (and theoretically collect association dues from their friends). Each complex's set of rules and declarations is different, and APCHA has no, zero, zip role in ongoing "management" once the units are sold, aside from "dealing with" compliance issues, which they do very very poorly. And this is not to mention APCHA's chain of title/custody dilemma: each time a unit is sold to a new buyer, APCHA oh-so-briefly holds title to the unit. As the rapid and unchecked deterioration of the housing stock continues, APCHA's responsibility for disclosure and overall liabilities increases. There is a troubling groundswell among various subsidized housing project residents that the deferred maintenance issues should be paid for by taxpayers, never mind it was the private property owners who subsidized these places to begin with and the deferred maintenance is solely because the residents neglected to contribute to and build up their own reserve accounts! So, as questions arise about funding more and more and more subsidized housing units, I feel strongly that it is far more important for this community to get a handle on just what it is we currently have in our inventory (APCHA cannot produce a comprehensive inventory list, just that we have approximately 2800 units), who lives there (APCHA's list is sketchy and not easily obtained - it should be a matter of public record), whether or not the current residents qualify (there are various income maximums, asset maximums and annual work requirements), what the unfunded HOA liabilities are across the portfolio, who is responsible for making up the shortfall(s), who is ultimately "in charge," and what can be done to better prepare ourselves and these complexes for the next 30 years. Clearly the status quo is an abject failure. In short, before we build more units, we must learn to take care of what we have. (Ya think?) And if that means blowing APCHA and its incompetent board up in the process, that's a start. To illustrate the caliber and quality of work done by the 12 members of the APCHA staff (at combined salaries totaling approximately $658K annually) and its equally dysfunctional board, here are a few colorful vignettes. Sadly, this is just a sample of the recent goings-on: APCHA STAFF ATTEMPTS TO CONCEAL PUBLIC RECORDS/ALTER POLICY DOCUMENTS The Red Ant regularly employs the Colorado Open Records Act (CORA) to obtain public documents from our local government. In the process of trying to obtain APCHA materials, I was met with great push-back. When finally directed by the city to provide me with the requested information, APCHA director Tom McCabe went berserk. Wildly making hundreds of copies of documents and commissioning the county's outside council to review them, McCabe tried to charge The Red Ant nearly $1000 for the materials and legal advice --- a foolish attempt to punish The Red Ant for making an in-depth inquiry. (I am incidentally a member of the Colorado Press Association and enjoy all the rights and privileges of working press throughout the state.) When questioned about the $475 hourly rate paid to local attorney Tom Smith through yet another CORA request ("please show me all billing statements for Tom Smith in 2011"), ooops, APCHA was forced to admit that they lied. Mr. Smith apparently "only" gets paid $250/hour. APCHA was just trying to stick it to The Red Ant for digging around, and no, of course The Red Ant will not be paying one cent for that! And all those copies? Bummer. That's not how it works. After a CORA request, the requestor can review the materials but must only pay for any copies that are taken away - not the entire request before review! Another attempt to keep The Red Ant at bay. Best of all was the CORA request about APCHA's own CORA policies. When I received the document via email, it was hilarious to see in the embedded meta-data that the document had been conveniently edited THAT DAY! Hmmm. Wonder what it is they're hiding!?! The liars, cheaters and scofflaws at APCHA thought they were thwarting The Red Ant and my access to public information. But alas, they simply showed the caliber of their own professionalism. INMATES RUNNING THE ASYLUM In case you were wondering how the egregious decisions affecting our housing inventory are made, it's best to start by looking first at who makes those decisions. In the case of the APCHA board, this means Marcia Goshorn, Ron Erickson, Kristen Sabel and Erin Smiddy. And when you include APCHA director Tom McCabe, it is noteworthy that ALL live in subsidized housing -- the very inventory they are designated to oversee and whose rules they are responsible for enforcing. (At press time, congratulations are in order to former APCHA board member Cathy Markle who recently purchased a free market home in Eagle County, taking full advantage of the recent decline in real estate prices -- the original intention of the subsidized housing program!) Frankly, it's Aspen's very own "Peter Principle" in full force at APCHA: in a heirarchy, every employee tends to rise to his level of incompetence. All these entrenched bureaucrats with no place else to go, making the same mistakes and intentional oversights again and again and again.... A SPECIAL DEAL FOR AN OLD FRIEND When former county commissioner Wayne Ethridge was found in violation of his deed restriction (renting out one unit that he owns while living in another, owned by his ex-wife), the APCHA board voted to let this infraction slide. Even APCHA staffer Julie Kieffer who is a "qualifications specialist" to the tune of $52K annually, recommended that APCHA force Ethridge to sell his Aspen Village trailer or force his ex-wife to sell the W/J Ranch unit where he currently resides. (In his own defense for breaking the rules, Ethridge claimed he would lose most of his life savings if he sold in this market.) Kieffer reminded the board that "we never guaranteed a profit," but the board completely ignored her recommendations. They just kinda felt bad for their friend. RESIDENTS WASTE ENERGY WHEN THEY DON'T PAY THE BILLS! Tenants of the Truscott Place subsidized housing project (next to the golf course) have long had utilities included in their rent. But with no incentive to conserve energy, residents were known to often leave the heat on with windows open throughout the winter. In late 2010, APCHA decided to pass the electric costs along to tenants in addition to their rent in 148 of 198 units there. (50 units do not have individual meters so these will see 5% annual rent hikes beginning in 2012 to account for the electricity costs.) Sounds pretty reasonable, especially for a city with aggressive energy conservation goals! But wait, APCHA then decided to lower the rents for these new electricity customers since they might see a considerable jump in expenses if they have to pay rent plus electricity! APCHA director Tom McCabe somehow thinks that conserving energy will be "more apparent" to renters who pay their own bills, but I disagree -- not in this case. It won't happen if the rent is reduced accordingly "to make the cost of rent and electricity roughly equal to what tenants are paying now." C'mon! Theoretically, grown-up local workers live at Truscott. In order to get people to conserve energy, make them pay for their electricity usage just like the rest of us. Obviously. W/J RANCH vs ORDINANCE 22 (APCHA vs FREE MARKET) - TOTAL HYPOCRISY! Remember Ordinance 22 of 2008? (Read Issue #9) The punitive and anachronistic measure made certain that owners of adjoining condo/townhome units in the city of Aspen could not combine multiple units into a single larger space -- without building a subsidized housing unit on-site -- because this would create a "loss" of rental inventory, presumably for local workers. Many local residents own multiple units in in-town complexes and had intended to combine their units, but Big Brother stepped in and said No Way, No How. But then it happened in subsidized housing! Picture this up at the subsidized W/J Ranch (on McLain Flats Road): guy owns one side of a duplex, girl owns the other. They date, marry and adopt two kids. And then they knock out the common wall to make the duplex into a larger family home. APCHA thinks this is just great. Board member Ron Erickson even went so far as to endorse the violation, "I don't see this as a problem in keeping with the spirit of the housing code - to accommodate families as they grow. They just took a short cut." C'mon Ron, they broke the rules! Current housing guidelines do not allow a household to own two separate subsidized housing units. But the APCHA board didn't care. As long as the wall is replaced when the family moves, they can maintain their status quo. I wonder what would happen if someone tried this at South Point (free market) condos? What's good for the (silent tax-paying) goose is clearly not good for the (entitled) gander. And now there's one less subsidized housing unit available for a qualified employee or family as a result. Ahhh the hypocrisy! SCOFFLAWS WELCOME APCHA currently has no policy for background checks on applicants for subsidized housing. In late 2010, the idea was brought before the county commissioners by APCHA's attorney. Predictably, Jack Hatfield saw the concept of checks as "oppressive and draconian," but George Newman saw the wisdom, "Housing is not a right, it's a privilege." The permissive nature of the APCHA program has enabled several of our recently-busted alleged cocaine dealers to enjoy living in subsidized housing, and has even enabled a local scofflaw to rent a studio apartment at Truscott despite trashing her previous free-market rental and telling the judge that she couldn't/wouldn't pay the damages because she has no job and no income. How does this happen? How and why can she occupy a subsidized housing unit for local employees if she doesn't work? Strangely, she and her boyfriend (who listed his official address as the Pitkin County Jail) managed to pay rent at their free market rental, but she now claims (and collects) disability which she uses to pay $642/mo rent and live subsidized at Truscott. The judge has ordered her to pay her former landlord $3000 for repairs to the trashed apartment, but to-date she has merely sent in a $5 bill. But she's safe and warm in her APCHA studio. APCHA claims she provided proof of Pitkin County employment and disability, but these records were not kept. Puh-lease! Talk about corruption! The Red Ant is in possession of photos of this tenant's move-in to Truscott -- using a RFTA truck to do so. Apparently her brother works at RFTA. Hmmm. Is this why she gets a subsidized housing unit without working and doesn't have to pay court-ordered penalties?? LITTLE APCHA FACTIODS TO SHOCK AND AWE
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And like I said, this is only the beginning. There is much more to come on the corrupt underbelly of our subsidized housing program. |
** MY "RIDDICU-LIST" -- THE "YOU CAN'T MAKE IT UP" FILE
It was confirmed by Aspen's Sister Cities organization on October 14 that, in addition to the $2418 mayor Mick got from the Aspen taxpayers for his European vacation, Aspen's sister cities program gave him $500. (Yes, sister cities gets its $15,750 annual budget from the city of Aspen, so taxpayers paid twice!) I wonder where else the mayor finagled public money for his boondoggle.... The water fund? The housing fund? Let's face it. When lazy and incompetent city manager Steve Barwick approves such reimbursements, it's amazing there isn't more fraud. Or is there?
Notably, when The Red Ant notified council of this additional stipend for the mayor, Mick suddenly announced at the October 24 council meeting that he would be returning the $500 -- not because he admitted wrong-doing (he would NEVER do that), rather, so that he could participate in a discussion over a local event that benefits the Sister Cities program. I'll be following up to make sure he does return the cash!
ON A LIGHTER NOTE....
On the subject of mayor Mick's taxpayer-subsidized European vacation, local resident Denise Malcolm submitted one of the better letters to the editor I've read in a long time, entitled "Love the New City Program." For a good laugh:
Editor:
I was delighted to discover that Aspen has a new vacation subsidy program. I had a wonderful two week vacation last month with my two daughters in England and France and those 5 euro cokes at Parisian cafes start to add up. Like mayor Mick, I would estimate that I shared the "awesomeness of Aspen" message at least two out of three vacation days with local people that I met. Of course, in all fairness, I probably spent less than 1 percent of my total vacation time sharing that message, but it appears that the proration formula is that any day that you share the "awesomeness of Aspen" message, you can get a reimbursement of your total vacation expenses - excluding traffic tickets incurred by your loved ones - regardless of how much actual time was spent sharing the message.
Since mayor Mick was not on pre-authorized city business, it would seem that all local residents should be eligible for this vacation subsidy program. Where should the residents of Aspen be directing their 2011 vacation invoices? How much detail should be included about our personal campaigns to promote the awesomeness of Aspen while on vacation?
I am getting ready to plan my vacation for the summer of 2012, so just to clarify, are all overseas destinations eligible for this vacation subsidy program, or just Europe? Will Aspen establish an Affordable Vacation Authority to run this new program?
Denise Malcolm
Aspen