ASPEN — A surge of retirees in the nation’s most venerable and innovative resort-community affordable housing program is threatening to overwhelm 43 years of careful curation.
It’s a demographic time bomb ticking inside Colorado’s priciest real estate market.
“I’m hearing from business owners all over the place — restaurants, law offices, financial offices: ‘We can’t hire anybody. We can’t find the people. We can’t house them. It’s too expensive,’ ” said Mike Kosdrosky, the executive director of the Aspen-Pitkin County Housing Authority. “If we don’t nip this retirement issue in the bud, we are in big trouble.”
The housing authority manages 2,956 units of affordable housing. About 1,650 are deed-restricted homes owned by teachers, politicians, doctors, chefs, nonprofit workers, police officers and business owners — the people who keep Aspen running as it hosts waves of the wealthy and the glitterati on holiday. The remaining properties are rentals.
Kosdrosky is worried because by 2025, anywhere from 20 to 40 percent of the owned homes will be occupied by retirees, Kosdrosky said.
Affordable housing is an issue reaching crisis level across Colorado, especially in the high country, where luxury real estate and second homes drive resort economies. And in Aspen, where the affordable-housing program has enabled thousands of residents to own homes in one of the country’s most expensive markets, the crisis is particularly acute.
Aspen is dealing with dueling interests: housing workers and building a community.
The two can overlap, but they are not always compatible, especially in a town where, as the joke goes, the billionaires have run out the millionaires. As Aspen grapples with the issue of workers retiring in their affordable homes, communities across the resort landscape are watching for clues on the affordable-housing front.
The wave of retirees is roiling Aspen. Every day, locals flip open their newspapers and see dozens of color ads for homes with prices that look like they just have to be typos.
For younger folks, those prices are more money than they will earn in a lifetime. For those who have been around and can remember when that $8 million, three-bedroom house cost $400,000, there’s a pang of lost opportunity.
So what’s the answer to sustaining a community of longtime residents amid a growing sea of millionaires and billionaires parking cash in second homes? Where do the workers live?
Not just the kids loading chairlifts and serving drinks, but the lawyers and doctors who can’t afford — by a long shot — an average-priced home in Aspen.
The affordable-housing program in Aspen ranges from studio apartments in free-market projects — which the city requires developers to build to accommodate new workers — to a 258-home village on the outskirts of town. They are affordable to teachers, with condos priced around $200,000, and to surgeons, with homes selling for well more than $1 million. But those buyers don’t see their homes appreciate at a market rate. They are capped at 3 percent per year.
Free-market homes in Aspen appreciate closer to 12 percent annually. So when a local sells her affordable home, she barely has enough for a down payment on a free-market home.
The program has deed-restricted houses that sell for more than $2 million each. There are several dozen appreciation-capped homes in the program that sell for more than $1 million each. Locals pay these prices because $2.2 million is affordable in a place where the average home sells for $7.6 million.
“It’s not like you have real ownership,” said Andy Popinchalk, who recently retired after 32 years teaching at Aspen High School and lives in the affordable home where he raised two sons. “It’s a very different life for people who live in free-market homes and those who live in employee housing. When you leave, you don’t necessarily get the same benefits to pass on to your kids or anything like that.”
Popinchalk and his wife, who taught for more than 40 years in Aspen before retiring, live in a modest, deed-restricted home with a rich garden across from the high school. Since buying in 2000, the home has appreciated less than $100,000. If the home were free-market, Popinchalk would have paid much more, but it would have appreciated at a much greater rate.
While the housing authority’s rules allow them to retire in their subsidized home, Popinchalk and his wife, Carolyn Fields, are hardly idle. Fields volunteers with a program at her church that offers adventures to kids with cancer. He tutors and helps students craft applications for colleges and volunteers with the experiential education program he fostered at Aspen High. And he’s irked by the tone of the conversation about settling down in affordable housing.
“Yes, clearly the rules may have to change and the people going in may have to know what they are getting into by taking on public housing like this,” Popinchalk said. “But I don’t think that after the fact, you can change the rules for everybody.”
The conversation about retirees in Aspen’s affordable homes easily devolves into young versus old.
As younger residents float ideas for tweaking the housing program, older residents feel threatened — understandably so. They’ve been paying income-based, appreciation-capped mortgages for decades. They don’t have a pile of equity to cash out, since annual appreciation is limited.
“You made an agreement with me. We have a contract. The agreement was ‘I pay this and I own the house.’ Not ‘I pay this and I own the house until someone decides I don’t need it anymore because I’m too old,’ ” said Mick Ireland, Aspen’s former mayor and three-term Pitkin County commissioner, who, at age 68, is running for county assessor. “Do you really want to raise a family in a community that says we are done with you (and) now you need to move somewhere else?”
What’s happening in Aspen mirrors the nation’s struggles to adjust entitlement programs, whether it’s Social Security, Medicare or unemployment benefits. Changing the rules while people are banking on those rules is never easy.
“How do you even start without worrying people in the program and making this us vs. them?” said Skippy Mesirow, a 31-year-old Aspen resident who serves on the city’s Next Generation Advisory Committee, which has taken on the task of enlisting more 18- to 40-year-old residents in the city’s vibrant, yet somewhat gray, political scene.
“I’m starting with coffee. I’m meeting with anyone who’s been here longer than me and telling them I live in the best place in the world because of what they’ve built. But I ask them, ‘Do you want that to die? Do you want to make it better or do you want to let the best example of Aspen’s inclusivity die?’ Am I asking them to move? No,” he said. “But we are all going to have to give something — or it will die. There is no perfect solution here.”
Mesirow is in the small kitchen of his rented home in Aspen’s East End, prepping a chicken-curry dinner for more than a dozen friends leading an effort to shift Aspen elections to March from May, the off season, when many residents are out of town. The measure stems from the NextGen committee.
Last October, the committee of young leaders penned an open letter urging the community to start a conversation about developing senior-specific housing and exploring financial incentives that encourage aging locals in multi-unit affordable housing to downsize into smaller homes.
If nothing is done, reads the letter, “we are essentially subsidizing a retirement community.”
The fiery backlash bummed out Mesirow and committee chairwoman Christine Benedetti, a longtime resident of the Roaring Fork Valley who commutes from Carbondale to her editing job in Aspen. Benedetti, the mother of a 3-month-old, sees Aspen’s housing crisis as an existential threat.
“The housing issue is an economic issue,” she said. “If you can’t find people to work all these jobs, the tourist experience will suffer and the lifestyle experience here will suffer and some of the amenities that people are used to aren’t going to be here anymore.”
Once Popinchalk met with Mesirow and Benedetti, his fears waned. There is no wave of young workers lobbying for his home.
“They are being their own kind of forward-thinking individuals,” Popinchalk said. “But they are going to run into the problems we are facing now when they get older. This isn’t going to go away.”
Aspen once set a goal to house 60 percent of its workforce. It didn’t last long. The most recent estimates show that less than 40 percent of Aspen workers live in the city. So more than 60 percent of the people who work in Aspen are commuting into work. That inextricably links transportation struggles — which are daunting and plentiful in end-of-the-road resort towns such as Aspen — with housing.
“We are pretty far off the goal of housing even half our workers,” Benedetti said.
There’s no single approach to getting more workers living in Aspen.
Solutions might involve older residents renting rooms to young workers. They may include a trade-down program that allows older residents to move into smaller units as children leave the nest. Maybe there is a way to infuse free-market opportunities in the housing program to incentivize people to move. Maybe the program could develop housing for older locals. Or the city could change building regulations to allow more density and create more rooms with taller buildings and smaller yards.
“That’s a four-letter word around here, but we need to discuss density,” Mesirow said. “It’s just building smarter.”
Ireland moved into his affordable home in 1997, a decade before he began his three-term run as mayor. The attorney and self-described “tax jock” crunches numbers. He has pored over voter rolls and property-tax collections in Aspen that show a growing number of second homes owned by corporations is contributing more to his hometown’s housing crisis than retirees are.
Here’s his report:
- In 2003, the average sales price for an Aspen single-family home was $2.7 million and locals owned about 55 percent of Aspen’s roughly 1,100 free-market, single-family homes and condos. The rest were second homes, about 25 percent of which were owned by corporations or legal entities.
- In 2013, locals owned about 42 percent of Aspen’s homes and more than 50 percent of the second homes were owned by corporations.
- In 2017, when the average sales price reached $7.6 million, Ireland estimates locals owned 34 percent of Aspen’s homes. He says the number of corporate owners of second homes is larger than ever.
“The free-market housing stock is being converted to second homes owned by companies. Then add the VRBO phenomenon, and that adds even more pressure on our dwindling rental market,” Ireland said. “Used to be you could move here and you could get five guys together and stuff them in a house and everyone was paying $400, $500 a month in rent. That house is no longer available for that opportunity.”
Ireland rejects the idea that locals stop contributing when they reach their late 60s. “The notion that we are all going to clog up the system like so much cholesterol as we get old, that’s really not true,” he said.
Again, he has done the research, geocoding voters to units and comparing them to past voter rolls to see how long people remain in particular units in Aspen.
“The tendency of people in affordable housing is not different than free-market units. People turn over. They get tired of being cold. They don’t ski as much, if at all,” Ireland said. “And they leave.”
Or they rent their home to a young worker. That’s against the rules, but the overworked, understaffed housing authority struggles with enforcement, relying on an outdated system to track residents in units.
“We have a vibrant black market in our housing network. People own a unit with a mortgage geared toward 30 percent of their income and they turn around and rent it to some desperate young person at twice the allowable rate,” Ireland said. “It’s happening all over.”
Kosdrosky is all over that. He’s cracking down on residents who violate the program’s rules about employment, occupancy and earnings. And he’s directing a $1.4 million computerized upgrade to improve the paper-based operation. The Housing Information Management System will better enable his team to enforce strict rules.
To be very clear, no one — not Kosdrosky, Mesirow, Benedetti or the NextGen committee — supports removing anyone from their homes.
Kosdrosky said it is “morally, legally and ethically untenable” to force retirees to move.
So his board is considering how it can offer incentives for retirees to maybe move into smaller homes. There’s a plan to increase the number of years of full-time work required before a resident can retire in affordable housing. Currently, that’s four years. A new proposal would raise that to 10 years and perhaps twice that depending on the age of the buyer.
“Our housing is a privilege. It’s not a right. I’m sorry, but it’s just not a right. That’s not me saying that. That’s the community,” said Kosdrosky, quoting the 2012 Aspen Area Community Plan plan, which reads: “Living in affordable housing is not a right or a guarantee, but a privilege, carrying with it responsibilities to future generations, such as long-term maintenance and regulatory compliance.”
The computerized system and new ideas will help 10 to 20 years down the road, Kosdrosky said. But it’s not going to help with more retirees on the horizon.
“This community was very innovative 40 years ago. They were trying to address immediate needs and probably thought future generations would have to figure out the retirement issue, and we are at those crossroads,” Kosdrosky said. “We are the future generation that has to figure this out.”
Kosdrosky says he hears from many residents who tell him the affordable-housing program was built to establish community. He counters that, saying the program was actually designed to house workers.
“If you focus on community housing versus workforce housing, that’s a slippery slope because you are saying, ‘Well, the workers don’t come first,’ and this program was predicated on providing workforce, employee and employer housing for the community,” Kosdrosky said. “So, it is your No. 1 economic-development program.”
Rachel Richards has worked nearly 30 years serving Aspen and Pitkin County as mayor, councilwoman and county commissioner. She helped refine the affordable-housing program that has become a national model, funded by a real estate transfer tax that was approved by voters.
Richards, who helped sculpt Aspen community plans in 1993, 2000 and 2012, is one of the people who tell Kosdrosky that the affordable-housing program is about building neighborhoods and creating a community that doesn’t ebb and flow with the seasons.
“Our community plan has always called for trying to maintain a real community here for all generations,” said Richards, who moved into an affordable home in the late 1980s.
The housing shortage in Aspen has “pushed everyone to the point where they are trying to take a slice of everyone else’s pie,” Richards said.
Families ask for larger homes. Singles want a larger selection of smaller units. Others now are urging more retirement homes, which do not exist in the housing authority’s offerings.
Richards wants the retiree conversation to lean toward building a lasting community, but she agrees that housing is a critical need for employers seeking to lure workers — and not just those workers floating Aspen’s tourism economy, but a diverse collection of workers, young and old.
Lawyers, doctors, dentists and skilled trade workers require housing assistance in Aspen. And they won’t come if they are told at, say, age 45 that they will have to move before they pay off the 30-year mortgage on their home.
“A policy of ‘Move out upon retirement’ is the definition of a community in permanent transition and says that you want a temporary workforce at all times,” Richards said. “That’s not the community we want. We would be building only dormitories if we did.”
Richards said the younger folks urging change in housing policies to make room for the next generation should be careful what they wish for. They should think about what their community will look like if older residents are shuffled along, Richards said.
“They are making a terrible bargain for themselves,” she said. “They are saying it’s OK for us to have a community that is transient and no one should plan on sticking around that long.”
Communities around Colorado are watching how Aspen manages the looming wave of retirees who have anchored the resort economy. The affordable-housing programs in Vail, Crested Butte, Breckenridge, Telluride and Steamboat Springs are not as old as Aspen’s. Their housed workers are not as close to retirement as Aspen’s. But it’s on the horizon.
Eagle County estimates it will need 1,655 new units by 2025 for workers replacing people who are retiring. The county’s 2016 housing-needs study shows there will be a little more than 18,000 residents in the county between ages 50 and 84 in the five-year span before 2025. About 2,400 of them will be retiring by 2025, creating the need for 1,655 new units for workers who will be replacing them.
“Our demographics are catching up to us in a big way in the next 10 years,” said Chris Romer, the president of the Vail Valley Partnership. “It hasn’t reached fever-pitch here, but it is on our radar due to our demographics and aging population. We’re going to be faced with a similar situation here in the next 10 years for sure.”
Vail is transitioning away from the notion that affordable housing means short-term housing for the wintertime wave of resort workers who swarm Vail Mountain.
“That’s what we were about in the infancy of the program. Seasonal homes for seasonal workers running a seasonal resort. That fills a niche, but it leaves a pretty large void around the notion of community,” said George Ruther, who this year transitioned from directing Vail’s community development to guiding the town’s newly formed housing department, which oversees 800 deed-restricted homes for sale or rent. “Lately, there’s been much more attention on creating and sustaining community.”
Vail has a goal to acquire another thousand deed-restricted units by 2027, giving the town more options as residents age in their subsidized homes.
“Vail is not experiencing it to the magnitude of Aspen, yet. But it’s definitely something we know will occur,” Ruther said. “We are definitely watching them.”
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