More Than Two-Thirds of Aspen’s Occupied Homes are Deed-Restricted

More Than Two-Thirds of Aspen’s Occupied Homes are Deed-Restricted

Seventy percent of the full-time occupied units in Aspen are deed-restricted, the second-highest rate among 38 rural and resort communities in Colorado and five out-of-state ski towns inventoried in a recent survey.

The 2023 Workforce Housing Report from the Northwest Colorado Council of Governments (NWCCOG) and the Colorado Association of Ski Towns (CAST) was released Nov. 3 and shows a wide range of policies and outcomes among the 43 jurisdictions inventoried, which include 36 cities or towns and seven counties. Thirty-eight of those jurisdictions are in Colorado and five are the out-of-state ski towns of Jackson, Wyoming; Mammoth Lakes, California; Park City, Utah; Ketchum, Idaho; and Whistler, British Columbia. The 2023 report is an update to a 2019 report and revealed some progress made by many of these communities to address the affordable housing crisis.

“I think it just shows, even if you compare the two reports, how much these mountain towns are continuing to push the needle,” said Aspen City Manager Sara Ott. “I can use this report to say what’s happening in Durango or what’s happening in Vail or what’s happening to Ketchum and figure out if there’s things I can take from those examples that could help us move faster in addressing these issues here in Aspen.”

According to the report, which incorporates data from the 2021 American Community Survey (ACS) from the U.S. Census Bureau, the city of Aspen counts 5,872 total housing units, with 56% of them being full-time occupied, or a total of 3,278 full-time households in the city that either own or rent. This includes 1,966 full-time owned units and 1,312 full-time rentals.

Aspen’s occupancy rate is higher than that in other resort towns, including Steamboat Springs (55%), Vail (32%), Telluride (48%), Breckenridge (23%) and Winter Park, whose 12% occupancy rate is the lowest reported.

Among the 3,278 full-time occupied units in Aspen, 70% are deed-restricted as of July, for a total of 2,303. This represents about 39% of the city’s total units. Aspen has the highest number of deed-restricted units out of the 43 communities surveyed and the second-highest proportion of deed-restricted units after the 1,266 deed-restricted units in Breckenridge accounting for 73% of that community’s full-time households.

“I think that’s something this community should be proud of — that it has one of the longest-standing rural-resort housing authorities and that it’s done a good job of consistently adding to the deed-restricted units in the community,” Ott said. 

Deed-restricted workforce housing in Aspen and Pitkin County dates to the mid-1970s, before the Aspen-Pitkin County Housing Authority (APCHA) was created in 1982 through an intergovernmental agreement between the city and the county. The authority handles the qualification and sales process for most deed-restricted units, while establishing guidelines for managing this housing stock.

APCHA counts approximately 3,200 deed-restricted units in Aspen and Pitkin County, including 2,303 in Aspen, according to the report. This makes “the program the largest system of affordable housing per capita in the nation.”

In comparison, 12% of Snowmass Village’s occupied units, 45% of Vail’s and 40% of Telluride’s are deed-restricted. However, Mountain Village, located next to Telluride, counts 68% of its occupied housing stock as deed-restricted.

Ott said part of what explains Aspen’s large number of deed-restricted units and higher occupancy rate, compared with other resort towns, is that Aspen’s deed-restricted housing program is older than many of its peers. She also mentioned that the real estate transfer tax (RETT) — a 1.5% tax on property sales with 1% aimed at affordable housing and 0.5% at the maintenance of the Wheeler Opera House — has been a useful mitigation tool. RETT funds have helped pay for the construction of many units, including the three phases of Burlingame and other projects. In 2021, the RETT generated about $21 million for Aspen’s housing coffers. 

Eleven other communities — including Vail, Breckenridge and Crested Butte — also have RETT revenue streams used for various purposes. Colorado voters in 1992 approved TABOR, an amendment to the state constitution that prohibits future impositions of, or increases in, RETTs by state or local governments. The 12 communities that had a preexisting RETT were exempted and may extend the sunset date of their respective RETT in perpetuity.

Aspen and Pitkin County also employ zoning codes that require new development — both commercial and residential — to provide for affordable housing based on formulas that take growth and employee generation into account. 

How downvalley communities have tackled housing

In addition to the resort towns of Aspen, Snowmass Village, Vail and Breckenridge, the report also includes nearby downvalley communities such as Basalt, Carbondale and Glenwood Springs, all in the Roaring Fork Valley; Avon, Gypsum and Eagle, all in the Eagle River Valley; and Dillon, Silverthorne and Frisco, all in Summit County.

In the Roaring Fork Valley, Carbondale counts approximately 380 “income-qualified” units, or about 14% of the town’s occupied units, Basalt counts 269 deed-restricted units that make up 28% of the occupied housing stock, while only 2%, or 72, of Glenwood Springs’ occupied units are deed-restricted. That gives Glenwood Springs the lowest percentage and second-lowest number of deed-restricted units in the study. 

Forty-one of the 72 deed-restricted units in Glenwood Springs are part of the Voluntary Deed Restriction Program that incentivizes 30-year deed restriction limiting rent to 100% of the area median income in exchange of improvement fee waivers.

Although Glenwood Springs’ deed-restricted inventory is much smaller than Aspen’s, the city sees lower free-market housing prices than its upvalley neighbor. The median sale price in 2022 for a single-family home — including both deed-restricted and free market — was $870,000 in Glenwood Springs, compared with $13 million in Aspen, according to the Aspen Board of Realtors’ reports.

If condos and townhomes are added to the single-family homes, the median sale price reached $672,500 in Glenwood Springs, up from $475,000 in 2019, according to the June 2023 Glenwood Springs Strategic Housing Plan Update, where the city identified an increasing affordability gap from $49,000 in 2015 to $293,000 in 2022, “indicating that housing has becoming even further out of reach financially for working households in Glenwood Springs over the past several years.”

“The reason that Glenwood Springs has one of the lowest percentages of deed-restricted units is that our regulatory program is relatively new, and construction completion takes years after a project has been approved,” said Hannah Klausman, Glenwood Springs’s director of economic and community development.

Klausman said the Glenwood Springs City Council first adopted inclusionary-housing requirements in 2001. These requirements were suspended in 2011 after the 2008 recession, resulting in a downturn in the area housing market. In 2017, the City Council voted to repeal inclusionary-housing requirements from the municipal code before they were once again adopted in 2021. “The earliest units approved under that ordinance are just now completing construction,” she said.

The inclusionary-housing requirements reinstated to the municipal code in 2021 include a requirement that any new residential project of 10 units or more to deed restrict 20% of the units for resident occupancy. This means that 20% of the units need to be occupied by residents who work locally and use the unit as their primary residence, based on a tiered priority system. Tier 1 is for those who work in the cIty boundary; Tier 2 is for those who work in the 81601 ZIP code; and Tier 3 is for those who work within 30 miles of the city boundary. The code requires that 10% of the deed-restricted units be price capped at 100% of the area median income affordability levels. The City Council updated these requirements in 2023 to increase the percentage of price-capped deed-restricted units to 20% from 10% for rentals. For-sale units remain at 10%.

Klausman said 18 deed-restricted units have been added since the ordinance was adopted in 2021. She also said the city adopted a hotel-conversion ordinance in 2022, resulting in two lodging properties being remade into workforce housing, with 35% of the units deed-restricted. The remaining 65% are long-term rentals without an affordability cap.

“Those (conversions) occurred after the reporting, and include approximately 20 more deed restrictions,” she wrote.

Glenwood Springs has one of the highest rates of renter-occupied units in the survey, with 42% of its housing stock being rentals. That’s higher than Aspen’s 22%, Basalt’s 24% and Carbondale’s 38%.

Other recent undertakings to mitigate the housing crisis

The report also mentions incentives that each jurisdiction has taken to remedy the lack of housing, including regulations on short-term rentals (STRs), partnerships and encouraging the construction of accessory dwelling units (ADUs). 

Among the initiatives called out, the Glenwood Springs City Council approved in 2020 changes to the city’s ADU code requirements that permit larger-size allowances and changes to lot standards. Midvalley, Aspen Skiing Co. started renting its 150-bedroom project, The Hub at Willits, in 2021. Upvalley, Aspen is making progress toward building 277 deed-restricted units at the Lumberyard project, while recent lotteries of the 79 units at Burlingame Phase 3 were held in September and October.

Klausman added that the city of Glenwood Springs is currently reviewing a proposal to expand the allowance of duplexes and triplexes to more zoning districts in exchange for resident occupancy and/or affordability restrictions. This is scheduled to go back before the City Council for discussion in February. 

Among the 43 communities, 27 are now regulating STRs and four are considering placing restrictions.

Glenwood Springs started regulating STRs in 2019 using a buffer system of 250 feet between permitted STR properties, with the exception of the downtown General Improvements District (GID), where 18% of the free-market units can be used as a short-term rental. Outside of the GID, the total number of short-term rentals is limited to 5% of the city’s total free-market residential units. Klausman said this approach avoided the unmitigated rise in vacation rental properties that neighboring mountain jurisdictions saw during the COVID-19 pandemic. “Our cap on vacation rental properties prevented us from losing our existing housing stock,” she said.

Aspen, which saw a rise in STRs during the pandemic, started regulating them in 2022 using three types of permits: STR-OO for owner-occupied units limited to 120 nights per year; STR-LE for lodges without limitation; and STR-C, or “classic” permits that allow unlimited short-term-rental nights but are capped by zone district.

Another obstacle to affordable housing is the construction cost. The average construction cost by town varies greatly, from $206 per square foot in Steamboat Springs to $642 per square foot in Eagle County. The average cost to build a one-bedroom unit ranges from $149,000 in Salida to $800,000 in Snowmass Village. Aspen’s construction cost for a one-bedroom reaches $563,000, up from $209,000 in Vail and $231,000 in Telluride. 

According to the report, 956 additional affordable units are still needed in Aspen. The City Council last year established a goal of 500 affordable housing units within the 2022-26 time frame. The plan stated that about half of this goal would be achieved without new development, such as by replacing expiring deed restrictions with permanent deed restrictions or through APCHA’s voluntary rightsizing program.

Basalt and Snowmass Village are still in need of 1,409 and 1,400 affordable units, respectively, to help mitigate the housing crisis, according to the report.

 

By: Laurine Lasalle I Aspen Journalism I December 14, 2023


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