Aspen Real Estate Tax Collections Declined in ’22; Retail Economy Faring Better
The city of Aspen’s annual haul in real estate transfer tax collections declined nearly 19% in 2022 from 2021, but its sales tax collections through November last year were running more than 19% ahead of the pace set the previous year, based on a tax report issued last week.
The RETT generated $17.1 million in collections designated for the city’s housing fund and $8.8 million for the Wheeler Opera House/arts in 2022, compared to respective sums of $20.1 million and $10.8 million collected in 2021.
Though down from 2021, which saw the city set a record for the amount collected in RETT dollars, last year’s performance still doubled the city’s budget forecast of $8 million in collections for the housing part of the RETT, and the $4 million forecast for the Wheeler/arts side, according to the report.
Prior to 2022, there was a $100,000 cap on the amount of Wheeler RETT funds the city could grant to arts and culture organizations. In November 2021, Aspen voters approved lifting the cap and expanding the Wheeler RETT to help fund the city-owned Red Brick Center for the Arts. That means last year’s Wheeler RETT collections will be more widely disbursed.
“It is the expectation of the community, because of this vote, that meaningful funding and innovative programming will be made available” to three grant divisions that the city manages, according to an Aspen City Council memo from July 2022.
Two of those grant divisions are one-year pilot programs the city created after voters approved expanding the use of the Wheeler RETT. One is for an Aspen Artist Fellowship with a budget of $100,000. The other division will help Aspen arts and cultural organizations with identifying their capital-improvement and material-acquisition needs.
The third division, which is focused on the city’s arts and culture grants, has been in place and will continue to operate but on a significantly increased annual budget of $800,000 to $1 million, depending on the RETT’s performance each year, according to city finance reports.
RETT figures can be used to gauge the general condition of the Aspen real estate market. There were 621 total property transactions in 2022 in Aspen compared to 990 deals in 2021, “truly emphasizing the limited inventory that exists following two robust real estate years,” said the city’s finance director, Pete Strecker, in the report.
The declining volume was slightly offset by a 29% spike in the average price per transaction last year, Strecker said.
Through November, Aspen single-family homes sold for an average price of $17.3 million, and townhomes/condos were going for an average price of $4.4 million, according to online data from the Aspen Board of Realtors.
The city requires buyers of both free-market commercial and residential real estate in Aspen to pay the 1.5% RETT at the close of sale. The city’s housing coffers receive 1% of the sale amount through the RETT; the Wheeler fund collects 0.5%.
The city’s RETT applies exclusively to buyers of property within Aspen, which doesn’t include Castle Creek Road, McLain Flats, Old Snowmass, Red Mountain, Redstone, Starwood, Woody Creek and other surrounding, unincorporated residential areas in Pitkin County.
Uptick in sales tax collections
Year-end collections for the city’s sales tax have yet to be reported. Through November, the city collected $25.1 million in collections from its 2.4% sales tax, which was 19.3% ahead of the $21 million the city generated 11 months into 2021, according to the report.
Aspen’s retail industry also produced $1.1 billion in year-to-date total sales through November 2022, which was 20.3% higher than the sales totals for the same period in 2021.
Here’s how Aspen’s 14 retail sectors performed from January through November 2022:
November alone was down from November 2021, according to the report. Retailers rang up $47.1 million in sales last November, down 3.8% from November 2021. November isn’t a big revenue generator, accounting for 4% of annual sales, but “the data still support a greater influence from inflation (both nationally and locally) dampening consumer spending, albeit not in some luxury sectors.” Strecker noted.
Sales totals for November alone were as follows:
“It is noteworthy that monthly declines in accommodations continue to reflect weakening in volume of business as average nightly rates remain well above prior year pricing,” Strecker reported. “Counter to the softening trend, taxable automobile sales remains robust (up 30%) and are likely due to higher prices and pent up demand from past supply chain issues, utilities (up 12%) and jewelry/gallery sales (up 10%) which can be more sporadic.”
The city’s 1.5% lodging tax generated $3.7 million from January through November, which was 43.5% ahead of 11 months into 2021. In November alone, the lodging tax accounted for $77,679, which was 20.5% behind the November 2021 total of $97,749, according to the report.
“Specific to lodging, there have been a few closures (Hotel Aspen and Molly Gibson) for redevelopment, which is influencing total collection figures, especially in a relatively small month such as November, and will persist into the future until construction is complete,” Strecker said, referring to the two Main Street lodges. Hotel Aspen is being replaced by a luxury boutique hotel.
By: Rick Carroll I The Aspen Times I January 2023