Rachel Richards Slams Semrau's Plan

March 19th, 2007 at 05:47am Post Staff 43

Editor:

In 2000, as mayor of Aspen, I asked city voters to renew the real estate transfer tax (RETT) for affordable housing to fulfill the Aspen Area Community Plan goal of housing many of our work-force within the urban growth boundary and to maintain a healthy balanced community of permanent residents. The voters approved the measure, and the housing fund today has about $13 million in the bank.

Mayoral candidate Tim Semrau has proposed increasing the appreciation rates for existing affordable housing unit owners by 66 percent and then using $3-$5 million of housing taxes each year to buy their units back down to an affordable price when resold.

That's a proposal to spend $30-$50 million dollars over the next 10 years, for zero gain in actual units built or additional people housed! This proposal is seriously flawed from a policy perspective.

With land prices skyrocketing and land availability plummeting, Mr. Semrau's "spend our taxes creating and buying down appreciation plan" would severely limit Aspen's ability to buy new sites right now for future housing needs. Land costs alone are drastically shrinking the real production power of our housing funds. The growth the housing fund has experienced with the free market real estate boom will barely keep up with actual cost for buying land and building new units

Tim's plan would callously reduce the number of new housing units created, for current affordable housing owners needing to move to different size units, as well as for repeat lottery losers. Fewer units mean more participants in each lottery and reduced odds for all. Just last Friday, over 41 individuals (averaging nine years each in the community) entered the lottery to buy a single Lone Pine 1-bedroom Category 4 Condo.

Tim's election season vote buying spending spree would also use up much of the subsidy money needed to sell new units for lower prices. Just bringing some of the remaining unsold Burlingame Village housing units down from currently planned RO and Category 6 and 7 prices to reach more middle class households will take many millions of dollars.

Isn't it better to sell a unit for $100,000 less initially and save the buyer $7,000 a year in mortgage payments and property taxes, than to sell the home for $100,000 more (making the buyer pay more in taxes and mortgage each month) and then later payoff those owners (if funds still remain) and start the same pricey process all over again?

All of these missed opportunities will make it harder and more expensive for our co-workers and friends who have not yet won a lottery to ever get a place of their own.

Tim's spending proposal is an example of "count and fry your chickens before they even hatch" fiscal irresponsibility. He ignores the fact that the RETT is a very volatile funding source (remember the dot.com bubble bursting and 9/11 downturn), that the RETT will eventually expire, and that it could be repealed by voters who feel it is being squandered.

The Semrau spending plan for our housing taxes ignores the severe current worker shortage that our private businesses and public service providers face. And hospital or hotel, school teacher or ski patroller, librarian or electrician, Aspen will need significant numbers of new employees to replace the many who are now approaching retirement.

Tim's comment that we may as well use the funds as a giveaway because we could not possibly use all of housing fund's projected revenues building housing, shows a narrow and uninformed view of the complex long-term problems facing our community.

His proposal would cut into efforts to pay down the public debt on rental housing at Truscott, the Country Inn and the Music Associates' Marolt and Burlingame seasonal units, forcing rental rates to continue to go up faster than wages. Efforts to retain Centennial and Castle Ridge as affordable housing once their caps (from original approvals) expire would fall by the wayside. Renters would receive no benefit at all from Tim's tax giveaway, either in lowered rents or better chances to finally win a lottery, or in reduced prices for what new units are built.

Not only does Tim ignore the needs and opportunities cited above, his proposal overlooks the regional nature of Aspen's affordable housing problems. We depend on more than 50 percent of our workers today to come from somewhere else and folks, the downvalley safety value has been shut off. Middle income workers cannot afford homes in Basalt or the midvalley anymore. These communities have developed their own economies, good paying jobs, and second-home-buyer priced free market prices.

New Aspen workers will have a very hard time buying in Missouri Heights, and lower valley workers are finding better jobs closer to home in Glenwood or in the booming I-70 corridor gas and oil industries. As today's commuting work-force living in free market homes take downvalley jobs or retire, there are few entry level homes for the new workers needed to take their place.

Those who hope to lead Aspen should be aware of the bigger picture because Aspen clearly has the opportunity to work with other municipalities on a regional basis, but only if our leadership thinks on a regional basis, and we have preserved some of our resources to bring to the table to do more than just talk.

Rachel E. Richards
Aspen

Entry Filed under: Politics, Real Estate, Basalt, Aspen, Colorado, Pitkin County, Home, Race For Mayor 2007, Affordable Housing