[Editor's Note: This news coverage has been underwritten by Factual Aspen Investigative Reporting (FAIR). FAIR has been formed and organized in Aspen, Colorado, as a nonprofit corporation to conduct investigative journalism in the public interest, and to provide accurate, meaningful, and non-biased news coverage based on correct factual information.]
ASPEN, COLORADO (Post Time News)—Despite major snafus in the affordable housing program, local elected officials are asking voters to approve an extension of the Real Estate Transfer Tax (RETT) that paves the way for tens of millions of dollars of bonds—long-term debt that would be used to finance the program far into the future.
Aspen City Council is in fact asking voters to extend the RETT for bonding purposes for a total of 32 years into the future—the same amount of time the affordable housing program has been in existence. The consequences of municipal bonds are far-reaching because they would dramatically shift the affordable housing program from a pay-as-you-go model to one largely dependent on debt financing at a time of global concerns about the reliability of credit markets and declining RETT revenue due to a slowdown in the local real estate market.
The RETT extension through December 31, 2040, arrives on the November 2008 ballot after Aspen City Council decided not to put a bond measure to voters in the wake of inaccuracies in a 2005 Burlingame Ranch affordable housing brochure that provoked an ongoing controversy.
As of now the RETT will expire December 31, 2024. Ballot question 2F extends the RETT an additional sixteen years so to provide a funding mechanism for long-term bond obligations.
“I don’t think that the RETT should be extended without a plan and an idea of how much the bonds are going to be for,” City Council Member Dwayne Romero told Post Time News. “We need a plan here and a system in place that is going to ensure everything is done right. You can’t go to the bank and just ask for money without having
a plan. By extending this RETT that is what we are essentially doing.”
Why should the voters of Aspen give City Council the authority to issue bonds when the City has admitted to making mistakes in the past?
“I think it’s necessary to extend the RETT so it clears the way for the bonds,” City Council member Steve Skadron said. In an open house at City Hall in spring 2008, City staff floated the idea of putting a $49 million bond issue on the ballot, but City Council Members in the end decided against putting that measure on the ballot. City planning documents have used $200 million and more as a figure Aspen will need to fully address its near-term affordable housing needs.
“This is a long-term problem and it needs a long-term solution,” Mayor Mick Ireland, sitting in the Mayor’s chair in Council chambers, told Post Time News. “We need the flexibility to be able to address the problem. We are not like a school where we get funds every year. We need to have the ability to go out there and pass bonds so we could deal with this affordable housing problem.”
When pressed about whether the City was asking for a blank check for affordable housing, Mayor Ireland and City Council Member Jack Johnson said they did not yet know how much affordable housing bonds will cost in the future, and there could not fix a hard figure. The City also faces the challenge of creating a new department, the Capital Asset Management Department, to manage affordable housing issues based on the recommendation of consultants who studied what went wrong—and right—during the Phase I Burlingame process.
The Actual Housing RETT collections year to date through August 2008 are $3,983,982, or down 39 percent. The 2007 number was $6,560,022.
“I haven’t really decided if I am going to vote to extend the RETT so the City Council could do more affordable housing,” Aspen resident Jim Stockton said within view of City Hall. “The snafu with Burlingame is still in my mind and I have to decide on who I am going to vote for President.”
All three Aspen ballot issues pertain directly to affordable housing. In addition to 2F, ballot issue 2E looks to extend Aspen’s 0.45 percent sales tax for affordable housing and day care. The tax is scheduled to expire on June 30, 2010 and if passed will run through December 31, 2040.
Aspen City Manager Steve Barwick said about 55 percent of the tax will go toward day care, and 45 percent will go to affordable housing. Ballot issue 2G is a nonbinding advisory measure that asks voters if they are in favor of increasing density at Burlingame, “in substantial compliance with the recommendations of the Citizen’s Budget Task Force, the conclusions of the Performance Audit, and suggestions of the Construction Experts Group,” according to the language on the ballot. Burlingame would increase from the approved 236 units up to 300 units maximum, pending approval of Burlingame residents.
I realize I’m on the outside looking in, but I still can’t figure out whether the Council’s opponents are for or against affordable housing, a purely “Carterian” notion rooted in altruism. The more the opposition wraps this issue in economic questions, the more I think they are against the idea, which in my metric makes the opposition “Conservative” with a capital C.
Cheers,
Mitch,
I can’t speak for all the critics of the present problems, but I look at this as a serious business problem.
And yes, it is in economic terms. Without a very solid and efficient housing program, our resort economy becomes even more fragile.
Affordable housing programs (note the plural) are crucial to making Aspen work. Given that we cannot ever expect to meet the unlimited demand, we must make our affordable housing dollars stretch to house the most people. We must call on the private sector to find new ways to solve the problem. The City needs to create incentives for the private sector to build more affordable housing. The City has to become good stewards with their limited housing funds.
Some of the decisions made by Council and the City staff are easily interpreted as the most “anti-housing” actions of all!
Take a look at the details of waste and inefficiency in Burlingame. We could have built 150 more units had we not had the waste and “discretionary” additions. Much of that spending was pure waste, lack of controls, lack of planning, inefficient building design, poor contract negotiation, etc. That inefficiency helped only the contractors and suppliers, and in many cases, –no one.. But it hurt the scores of families who need housing. Who could have had it with those millions wasted. Are you suggesting that we should not worry about those “economic details”?
Many of us critics are angry because the fund is now bankrupt, having been spent in suboptimal ways which failed to house nearly the number of families which we could have housed. Is that the economic perspective that you criticize? Yes, I suppose it is. But without considering the economics, how do we fund a housing plan? Without considering the economics, the residents can’t buy units, or afford the mortgages.
Without considering the economics, we have no reason to be efficient, and would continue to squander millions of dollars which could be used to house the working families.
As for economics, the people who should be screaming the loudest are those waiting in line for their turn at the lottery which may be years away because of the wasteful practices of the City in Burlingame and other housing projects they have undertaken.
If economics are to be thrown out the window and not considered, then doesn’t the notion of “affordability”, and workforce housing go with it?
Look at the millions spent ($7+ million) for only two single family homes in town for affordable housing now 1 to 2 years ago. I believe that one employee has been housed with that huge investment in all of these months. Think of what $7 million could have done for housing employees if there had been a real focus on economic efficiency.
Mick and some of his friends want to protect the old, broken system, rather than leverage our assets to house more people. Therefore, they cry “anti-housing” at critics who wish to see a more progressive program.
Many of us “critics” have spent hundreds of volunteer hours trying to develop some new ideas for housing solutions, given the fact that the funds have been decimated. It’s not going to be easy. And yes, economics will be fundamental to making any housing solution work.
Affordable housing is fundamental to a workable Aspen. Economics are fundamental to a workable affordable housing program.
The problem with Burlingame is that indeed economics was thrown out the window in favor of what was easy.
Marilyn Marks
http://www.TheRedAnt.com
Marilyn,
I’ve read enough of what you’ve written to see that you perceive the Council’s choices as poor business decisions. I also recall you enjoy a corporate background that makes you imminently qualified to evaluate inefficiencies in matters like Aspen’s affordable housing.
You bristle unnecessarily at my comment. I’m not criticizing. I’m just giving my impressions. I don’t know near enough about the issue to contribute constructively and probably never will. That said, I’ve lived in this valley for forty-two years. This issue has been a canard almost as long.
In my opinion, Aspen’s affordable housing problem is analogous to the causes of the current U.S. economic crisis. Yes, there are several significant differences; however, at the heart problem is not property value per se, but the effect Aspen property values have on the garden variety, middle income debt to income ratio. As effectively as this limits who can get a home mortgage in Aspen, it also limits the City’s ability to acquire land for affordable housing.
There are at least two ways to mitigate the effect of Aspen property values: cap the value of certain properties, or lend on debt to income ratios that are much greater than 40%. Congress chose the latter to considerable folly. Aspen has attempted something more akin to the former with mixed success. You write of “affordable housing programs (note the plural).” Perhaps you’d be willing to flesh-out this either/or proposition?
[Some of the decisions made by Council and the City staff are easily interpreted as the most “anti-housing” actions of all!]
To the extent you criticize Council policy as contrary to affordable housing, I for one will listen. If you’re suggesting Council members are against-affordable housing, I know better. Your examples of Burlingame waste strike me as analogous to the U.S. government paying $150 for a toilet seat. As custodians of tax-payer dollars, Council has arguably done a crappy job. Yet, while I’ve never read Council’s job description, I’m pretty sure expertise in construction management is not a requirement. You can yoke Council with this in a “buck stops here” kind of way, but a singular focus on Council culpability demonstrates disinterest in fixing problems.
Sounds to me like you’re ramping up for a City Council campaign.
Cheers,
Mitch,
Thanks for taking the time to respond.
First of all no ramping up a CC campaign for me. But I would like to actively support good candidates. I hope some will run! I don’t have the temperament for it!
Secondly, I am certainly NOT “eminently qualified to evaluate inefficiencies”, but I, like most citizens, am qualified enough to see major errors of common sense. And I did spend probably 800 hours educating myself on the current housing here by reading years worth of studies, visiting sites, studying the numbers, talking with residents, builders, developers, officials. I’m not an expert, but I have made a big investment in my still limited education on the topic. Not for any reason other than wanting to see Aspen’s economy stay viable. I am not a developer or even a potential investor in such programs.
Additionally, there is NOT a singular focus on Council from me in my criticism. I have been quite critical of senior staff at the City for their mismanagement, and misrepresentation of the affordable housing problems. Problems from development planning, to contract management, to massive compliance issues—all costing us hundreds of units of otherwise available housing. Council should NOT be construction experts, but instead insist on executive management in the city to properly conserve and optimize our housing assets.
Allowing such inefficiencies, and then covering them up, and misrepresenting the auditors’ reports makes CC complicit in the problem. THOSE actions are clearly anti-housing. The refusal to deal with compliance issues (employers and reisdents) is also undercutting the program and the public’s confidence in it.
Let’s also take the decision to give the 84 Burlingame Phase I homeowners the rights to block additional homes on this very valuable piece of property. Mick and the official Burlingame Issue Committee for the 2005 election told voters that up to 330 units could be built. Then the City, without taxpayers knowledge, gave the 84 homeowners the right to block anything over 236. We lost about 100 possible units in the process. Given the cost of finding alternative land, developing infrastructure, planning and design expense that was at least a $12 million mistake. Likely more. And now it will be YEARS, at best, before we could build those units anywhere other than Burlingame. To tolerate that kind of action hurts housing. Council pays lip service to wanting to have an efficient housing program, but the actions are inconsistent with that lip service.
There are LOTS of good ways to positively impact the housing issue here, many with willing private sector help. I’ve spent a lot of time talking with planners, developers and others with good ideas on how, with local government encouragement, much more rental and entry level owned housing could be built, likely with little government subsidy. Before I left the Housing task force, after it was clear that CC was going to reject any idea I had touched, I was working to bring together a diverse group of expert professionals and working locals to develop plans for loan guarantees and equity sharing programs for first time homeowners. Just as other progressive cities have done, now leaving us behind, with an anachronistic plan. The idea would be not to use much of the city’s cash, but the strength of its balance sheet to guarantee very low interest loans—one of various ideas to help workers bridge to entry level free market. homes.
The free market entry level does not have to be multi-million dollar homes. New starter homes could be built by developers that don’t require that kind of outlay. But they need fast track approvals, encouragement and the waiver of some fees, etc. by local government to make it work. There are scores of good ideas among many local developers, interested citizens, businesses with employee needs, all waiting for a City administration who will listen to new ideas. It’s not this one! Most developers refuse to even spend another minute trying until we have a different administration. Most cannot afford to waste more hours trying to offer new ideas, only to be beat up or ignored.
I urge you to be open to considering that critics of the present system do not have anti-housing motivations or direct personal interests in the issue. Many are long time residents who care about the town and want it to work. They see that the housing fund is bankrupt, due to reckless Council decisions and oversight, with a dim future for the foreseeable future, but yet with more urgent needs. That is the reason for the criticism and pushing for a closer look and viable alternatives.
(Your analogy of the military’s $150 toilet seat—a fellow member of the housing force commented—“just because I criticize the $150 toilet set does not make me against national defense!”)
[just because I criticize the $150 toilet set does not make me against national defense!]
Why would it?
Cheers,
Mtich–
That’s where we started. You questioned critics of the CC who focus on the economics of the housing plan. You seemed to feel that many of us are anti-housing because we criticize the economics of the program.
So that is the point. I’m not anti-housing. In fact, I’ve spent a lot of time trying to make it more efficient and have a farther reach. But it seems that you see that as anti-housing. Some of our elected officials try to use that anti-housing cry to deflect the criticism, but it doesn’t stick.
Why do you feel that criticisms of the economics and spending in housing make the critics “against the idea”?
Marilyn
Marilyn,
Generally speaking, I don’t deal in feelings.
I have laid out two solutions to the affordable housing problem, stipulated that your professional experience dwarfs anything I can bring to the table, and humbly requested you flesh out your vision of what the program should be. In response, you undermine my request by emphasizing the misguided idea that I think you are against affordable housing.
You are the critic here. You can call Aspen’s affordable housing program a turd, but if you can’t offer something superior and bring it to reality, the purpose you serve isn’t the public’s.
You accuse elected officials of trying to deflect criticism by declaring your position “anti-affordable-housing,” but when you unleash the charge it’s supposed to stick?
Were you able to give us something that works better than the status quo… well, that would be a place to start.
Cheers,
MItch,
I referenced a few ideas in the writing above. Bridge loans using our balance sheet, incentives to private developers, shared equity programs, compliance programs, etc. The details of all of these takes a lot of writing. I’ll be happy to take that off line to avoid the criticism I got last week of posting too much. Also, I can send you the specfic short white papers I submitted to the Citzens Budget Tasl force on some specific compliace ideas which would open up scores of units. They were adopted by the task force and seem to have been buried. by APCHA.
I’ve offered and discussed with others lots of potential avenues to explore, but the point I was making above is that we must have an adminstration open to a different approach.
Part of my earlier posting was in response to your notion of TWO solutions. My point was that there are far more than two. As a result we need to start examining some of them with a new and meaningful strategic plan.
It needs the input of the citizens and developers.
As to my accusation “sticking” —I have specifics as to their “anti-housing” actions, whether intended that way or not. Results are what matters. Their accusations of anti-housing bias from me is based on nothing but their frustration.
Mitch, there are many far more progressive ideas floating around from people with far more expertise than I would ever have. And some with far more money to invest in these programs than I would ever have. Please don’t assume that the status quo is acceptable because the other ideas have not been posted on Aspen post.
First question—how do we get elected officials to quit defending the past and be willing to consider new ideas?
Marilyn
[Please don't assume that the status quo is acceptable because the other ideas have not been posted on Aspen post.]
Please don’t make me fry my laptop monitor blowing decaffeinated iced tea through my nostrils. You don’t want to post your ideas on Aspen Post? That’s your prerogative. This has nothing to do with where you express your opinions. Rather, it has everything to do with what your opinions are.
Cheers,