ISSUE #232: No on Aspen 2A - The STR Tax Goes Too Far (10/23/22)

"We do not have government by the majority. We have government by the majority who participate."

-- Thomas Jefferson

It's election season. Your Aspen ballot was mailed on October 17 so you should have it by now. We have several local issues to consider, but I decided to focus on Aspen 2A this week. A tax on short term rentals (STR) was originally conceived to address and mitigate for the impacts to the community from nuisance STRs, but the actual ballot measure reflects something else entirely. The punitive money grab targets the wrong rental units and will be nothing short of detrimental to Aspen's traditional lodging community.  Read my column in yesterday's Aspen Times HERE. MY BALLOT I am voting for / against the following local candidates and issues: County Commissioner District 2: Kelly McNicholas-Kury This is certainly not a ringing endorsement, but sometimes the devil you know is better than the devil you don't. Sheriff: Michael Buglione This is not an "anti-Joe" vote, rather, a vote for change. Simply put, it's time. I was particularly impacted by this letter from a longtime local whose measured views on local issues have always struck me as spot-on, as well as the letter from Judge Erin Fernandez-Ely in green below. Aspen 2A: The STR Tax NO See the linked column. Aspen 2B: Extension of the 0.5% sales tax for Parks and Open Space NO This 0.5% sales tax was added in 2000 to the original 1% sales tax that took effect in 1970. The additional 0.5% was specifically to fund open space acquisitions. Today, all critical acquisitions have been completed: Smuggler, Cozy Point and Sky Mountain, among others. We've succeeded. The 1% sales tax plus a $14 million fund balance is more than enough to fund the city's parks, open space and rec facility needs into the future. Do not extend the additional 0.5% tax. Aspen 6A: Dedicated funding for the Aspen Ambulance District NO We voted to more than double the Ambulance District's mill levy / tax collections in 2014. Today, property tax revenues for the Ambulance District are WAAAAAAY up. I agree with this letter. There is no need for more funding. YOUR BALLOT Got questions? I've done the research and I'm happy to help. Just drop me a note.

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Ballot Issue 2A, the Short Term Rental (STR) tax, fully misses the mark.  The administrative over-reach seeks to add 5% and 10% excise taxes to the nightly sales taxes of various categories of short term rental properties. The rationale, thanks to a financially illiterate city council, is strictly punitive. At the end of the day, this STR tax is specifically designed to discourage tourism. It will be detrimental to Aspen.

Three types of rental properties will be affected by the tax:

An “owner occupied” rental is a local’s primary residence that is rented out no more than 120 nights a year. Think of your neighbors who live here but travel a lot so they rent their Aspen home short term. With the passage of 2A, the nightly sales tax rate would increase from 11.3% to 16.3%. Your neighbor will pass this along to the renters.

A “classic” rental refers to all residential units on the rental market that are specifically not hotels or lodges, which are categorically exempt from the STR tax. The extremely broad “classic” category ranges from large, luxury homes to traditional condominiums, the small complexes you see throughout the downtown core. This category gets whacked the hardest because the tax’s wide net captures the VRBO-type rentals and “party homes” at the center of the STR debate. It will be subject to a 10% excise tax, bringing the nightly rate to an astonishing 21.3%. 

Take that, owners of investment properties! City council does not like you running “mini hotels” in Aspen when you only pay residential property taxes! And as for the hundreds of other legacy condominium units that have been rented short term to people who have preferred condos to hotels for the past 50 years, council wrongly believes these are equally to blame for the negative impacts to the community such as parking, noise, traffic and displacement of locals, despite their business model never having changed. For these traditional condos, their long-time group business, families and foreign visitors will simply go elsewhere. Aspen will price them out of the market.

The “lodge exempt” condo-hotel properties, specifically Aspen Square, The Gant, North of Nell and Aspen Alps, have been detrimentally singled out. Comprised of individually-owned condos and functioning as hotels under unified brands and marketing models with comparable amenities to hotels, these properties are only “exempt” from individual-unit business licenses, not the proposed 5% STR tax.  Oddly, “fractionals” like Dancing Bear and the Residences at The Little Nell which only differ from condo-hotels in that they have multiple-owner vs individual-owner deeds, get a pass on the tax.

Issue 2A was originally conceived to mitigate for negative impacts to the community from nuisance STRs, however, the perceived impacts are distinctly not being driven by the operation of traditional condominiums and condo-hotels. Issue 2A simply targets the wrong market segments. These properties have seen relatively flat occupancies over the years and the notion that their impacts to the community have increased is incorrect. If anything, these sectors are competing with STRs for staff, not generating new demand for employees. And each condo-hotel already provides proprietary housing to a large percentage of its staff.

Most notably, condos and condo-hotel unit owners pay the RETT, directly benefitting subsidized housing. Furthermore, the short term rental of traditional condos and condo-hotel units has never displaced local households.  

These properties should not be subject to any STR tax.

Leading the charge to tax condominiums and condo-hotels has been councilwoman Rachel Richards. Her over-simplified rationale is that these properties pay residential property taxes (6.9%) when hotels pay commercial (27%). But, clean up on aisle five. Richards is looking solely at tax rate, not actual taxes paid. A simple analysis shows that last year’s taxes paid were equitable on a square footage basis. Property values and assessed values are derived using different methods, so to apply a commercial tax rate to a condo property, the assessor would have to value the property as a commercial one, dramatically reducing its value. Richards’ premise is fatally flawed: she’s comparing apples to kumquats as a spiteful means of soaking owners of private properties who she disdains. But it’s Aspen’s tourism that actually gets hurt.

One little-known secret of 2A is a provision that siphons nearly a third of the total revenue collected (over $3 million in year one) for “infrastructure and environmental projects,” the result of a half-baked and leading community survey that asked where the expected windfall should be spent. Tax first, then maybe fund a pet project or two. 

City finance director Pete Strecker recently acknowledged that occupancy numbers are trending downward, but pointed to summer 2022 nightly rates which were “way up.” He concluded that this simply “balances the books, so to speak.” No Pete, that’s more flawed logic from the city. Inflation has already dramatically raised the costs of supplies and utilities, and the Aspen lodging community is bracing for a significant reduction in occupancy with lower nightly rates amid a looming recession and global uncertainty. It’s no time to tax our traditional tourist accommodations.

Focus on the real problems. Vote no on 2A. 

Be like Breckenridge, where traditional “resort accommodations” are exempt from the STR debate. Contact TheRedAntEM@comcast.net.

ISSUE #231: Destroying Aspen's Neighborhoods (10/9/22)

The siren song of redistribution of wealth by centralized government never ceases for those who seek irreversible and unusurpable control over the lives and liberties of private citizens."

-- Josh Jones

The terrible repercussions of recently-passed Ordinance 14 are already being felt. The changes to the land use code that allow dense, multi-family subsidized housing to be built in any zone district are coming to vacant lots throughout town, notably to quiet, established neighborhoods where such development will be detrimental. 

The Aspen Area Community Plan (AACP), our local guiding document, is being deliberately ignored, particularly because those affected are free market and often second homeowners. Their quiet enjoyment does not count, and the destruction of their property values is being celebrated by city council. Subsidized housing at any cost is their mantra.

Read my column in today's Aspen Times HERE.

Also, to check your voter registration for the November 8 election, go to www.Pitkinvotes.com

Ballots are being mailed out on October 17. Please be in touch if you have questions about candidates, issues and ballot measures.

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The recent passage of Ordinance 14 that changed local land use policy to allow for the development of residential multi-family subsidized housing complexes in all zone districts in Aspen is already wreaking havoc in long-established local neighborhoods. In short, whether it be in the West End, off Cemetery Lane or in Oklahoma Flats, Aspen’s few remaining vacant lots are being quickly snapped up and slated for massive development that fulfills city council’s utopian decision to shoe-horn high-density public housing into incongruous, quiet confines via quick, administrative review processes.

It is widely known that Aspen’s subsidized housing program is a dumpster fire, but this latest move, which passed 5-0 in typical city council “echo chamber” fashion, is a disgusting over-reach and stunning rebuke of the Aspen Area Community Plan (AACP), our community guiding and philosophical document. In fact, the AACP is revered as the holy grail when its plans of action to achieve “community goals” suit the city and its leaders, but when its aspirational and visionary principles are applied to the vilified free market homeowners who make subsidized housing in Aspen possible, it is quickly ignored.

For all the talk of Aspen’s modesty-scaled built environment and the critical need to preserve our small town character, forcing large, dense, subsidized housing complexes into inadequate spaces in quiet residential neighborhoods is antithetical to the community values espoused in the AACP. But given the no-longer-thinly-veiled disdain for free market property owners, these neighborhoods be damned. Subsidized housing belongs everywhere now. And the result is that the AACP has become a hypocritical manifesto serving to support some and to distinctly punish others.

The central themes of the AACP, last updated in 2012, are to maintain community character and quality of life, re-evaluate the impacts of development, manage the adverse effects of development and explore zoning solutions that re-affirm our small-town heritage. Notably, this maintenance, re-evaluation, management and exploration is directed specifically at curbing and controlling free market activity, never subsidized housing development. In the city’s eyes, such development is without effect or impact, when in reality, building dense multi-family complexes in residential neighborhoods is akin to allowing a boisterous pub or gas station in those same locations: completely wrong, and detrimental to the small town neighborhood character that is so regularly referenced.

Throughout the advisory document, highfalutin community aspirations abound, but are thrown by the wayside when private property owners seek to, God forbid, preserve their quality of life and the quiet enjoyment of their properties. The AACP no longer applies to them, if it ever did. In fact, this new subsidized housing development legislation flies directly in the face of many critical tenets of the document:

Governance: The AACP states that good governance is transparent, participatory, inclusive, collaborative, civil, consensus-oriented, responsive, effective, efficient and accountable. Just because Ordinance 14 passed unanimously at the council table in no way makes the resulting  legislation inclusive, collaborative or civil. In fact, it’s just the opposite. The punitive intent and overt destruction of property values is being proudly celebrated as a “win” toward city council’s wealth redistribution goals.

The Aspen Idea:  The AACP reminds that we value authentic engagement with others, including civil discourse about the community we want to create and maintain. This collaboration is intended to create common ground to reduce stratification in the town. Right. The community we want to create and maintain should never intentionally support such deliberate preference for some over others. We are already seeing the opening battles of an unprecedented class war. This legislation makes things dramatically worse.

Growth Management: The AACP condemns recent growth, defined as an increase in population, jobs, infrastructure, demand for services and an increase in the size of buildings, that is inconsistent with the history, scale, density and context of our small town character.

It says that limiting mass and scale limits the public financial burden of additional infrastructure and government operations and housing mitigation offsets impacts on the community: schools, roads, public transit, water, sewer and traffic. But the city does not view the development of subsidized housing as any kind of growth. Only free market development causes that! Hundreds more full-time, year-round residents will mysteriously have zero impact on our critical infrastructure.

Housing: Long cited in historical AACPs, “(subsidized) housing should be compatible with the scale and character of the community,” and notably, new subsidized housing “should demonstrate compatibility with the massing, scale and character of the neighborhood.” That is, until it’s convenient to simply ignore this clear stipulation because it no longer supports the narrative.

City council is out of control. They are hell-bent on pursuing their unrealistic subsidized housing goals at any cost, even if it means throwing out the AACP. New housing development before any comprehensive true needs assessment is virtue signaling at its worst. Instead of moving the needle to address any aspect of our “housing crisis,” which is distinctly not a shortage, such activity will cause real and lasting damage to our community, and in no way will this be limited to the wealthy second-homeowners who they hate. The desecration of the AACP negatively impacts all of us. 

Destroying others’ property values will not make Aspen more affordable, just uglier. Contact TheRedAntEM@comcast.net

ISSUE #230: United We Stand (9/26/22)

"Restlessness is discontent - and discontent is the first necessity of progress."

-- Thomas Edison

Things are ugly around here. Everyone has a grievance, and that includes segments of our community that aren't usually in the local political crosshairs. These days, as a result of a never-ending stream of bad decisions and tone-deaf policies by the current city council, there's a gripe on every corner.

So here we are, strangely united: united in our discontent.

Read my column in yesterday's Aspen Times HERE.

* * * * *

In a small town known for its political squabbles and petty arguments, today we are more united than ever. United in discontent. There has perhaps never been a time when the community has shared such a palpable sentiment stemming from numerous ignorant and ill-conceived decisions by our local government. The discontent manifests itself in different ways to different constituencies, but council has been nothing if not consistent in its ability to negatively impact just about everyone.

Downtown businesses were hit with the “Living Lab” experiment on Galena and Cooper that removed 44 parking spaces and made the already precarious driving-riding-walking corridor even more treacherous. Council’s car-free downtown dream is fatally flawed until there is a place to park the cars in the first place. Instead, cars circled the blocks, looking for parking, until many decided not to come to town anymore. The experiment has recently been tweaked to accommodate more cars, but the damage is done. 

Restaurants were the first to be on the receiving end of the city’s post-pandemic return to normalcy. Despite being highlighted in the AACP, the community’s guiding document, “messy vitality” is apparently no longer a community value. Innovative build-outs and street activations were shut down, despite the proprietors paying for the spaces and mitigating for subsidized housing. Unless formal plans were under way with the city to make the temporary structures permanent, all the quirky additions were removed, and with them, seats for hundreds of diners.

Families with children found themselves scrambling for childcare options in an already dire childcare market. In its most tone-deaf decision of all, city council attempted to increase childcare availability by requiring not one but two long-time local providers who rent city space in the Yellow Brick to operate five days a week as terms of their leases. For years, the cherished four-day-a-week providers had served hundreds of local families, but the new regulations forced both businesses to shut down. Today the city touts its under-construction $8 million childcare facility at Burlingame as the answer. Imagine how two round-trips each day will impact traffic, not to mention the working families who have to make them.

Homeowners have become the latest boogeymen. If you need a building permit, be prepared to wait, sometimes as long as 12-18 months. And don’t even think about a demo. There can only be six each year. In Vail, by contrast, it’s closer to two months, with apologies after 3-4 weeks. And in Minnesota, state statute requires decisions on complete applications within 60 days. What takes Aspen so long? It’s all about control and palpable disdain for private property owners. Our city hall has no discipline, no reliability and a culture that disrespects its citizens.

The Arts, including the Red Brick, were set to receive significantly more funding from the Wheeler coffers when 71% of the electorate approved a November 2021 amendment to the RETT. But when council refused to seat a dedicated arts council and allocated the arts funding itself, “arts fellowships” received only a dime for every dollar council kept to “improve city facilities.” Hardly the intent of the ballot measure.

West End residents, long besieged by west-bound, rush-hour commuters who attempt to bypass the traffic jam on Main Street and who ignore stop signs and speed limits, have implored the city to put an end to this dangerous and disruptive practice but remain in limbo as bureaucratic stalling and traffic studies are carried out.

Second Homeowners, our tax-paying but non-voting neighbors, have been blamed for displacing locals from in-town housing, crowding our restaurants and gentrifying our town. (No mention of their contributions to job creation, the RETT coffers, the tax base and our non-profits.) Short term rentals have already been punitively regulated because apparently no one but locals should be able to make money renting their homes. And council none-too-subtly threatens a future “vacancy tax” to further punish those not occupying their homes full time.

Subsidized Housing residents stand to suffer greatly as a result of this council’s decisions and priorities. For years, our deteriorating housing inventory has been further neglected for want of policy changes to bolster HOA reserves and undertake preventative maintenance. Decaying buildings will not fix themselves. Plus, the current focus on building hundreds of new units will add to our year-round population in significant numbers. “More” may initially sound appealing, but it also means more competition for increasingly scarce resources. After all, with just 12 bar stools at Mi Chola, where will hundreds of new folks watch the Broncos?

This is just a partial list, but you get the idea. Every sector of this community has been negatively impacted by the naïve and irresponsible decisions of this council. Blinded by their idealism and lack of real-world experience or business acumen, this group is solely responsible for making all of our lives more complicated, more costly and more inconvenient.

But we are the voters. There is a municipal election in March. It’s a sad state of affairs to be united in our discontent, but united we must remain. Together we can force the important changes we all can agree on.

Aspen deserves better. Contact TheRedAntEM@comcast.net

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.

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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