Centennial homeowners, facing hundreds of thousands of dollars in repairs to their aging affordable housing units, are once again calling on local government to help them financially.
In a three-page letter sent to Aspen City Council in May, the Centennial homeowners association requested a meeting with elected officials to discuss using public funds dedicated to affordable housing to sustain what already exists, rather than building more subsidized units.
The Board of Pitkin County Commissioners (BOCC) met behind closed doors earlier this month to discuss the HOA’s request, county attorney John Ely confirmed. He said the commissioners have questions for the HOA board, which will be aired at a joint meeting between the BOCC and City Council scheduled for Aug. 7.
Engineers who have studied Centennial, an affordable housing development designed and built in the early ’80s, say that the original construction suffered from faulty design and implementation related to the flashing, which are metal strips that guide runoff water away from problem areas. With inadequate flashing in critical areas of the building, water has seeped into the siding. In 2009, structural repairs done on one of the ownership units revealed moldy and rotten beams and two-by-fours, although it’s unknown whether the problems found in that unit are indicative of all the ownership units.
Over the last three years, Centennial homeowners and the local government have commissioned various studies of the problem. While the studies have been in basic agreement on the causes of the issue — water infiltration — they have come to different conclusions on the cost and extent of a full repair.
The HOA hired engineers, architects, mold experts, building contractors and other consultants to assess the situation, who concluded that millions of dollars in repairs were needed. Estimates go as high as $90,000 to $100,000 per unit for special assessments to fix the buildings. However, when this information was presented to the city, the government commissioned a study that puts the estimated cost of repairs around $7,000 per unit.
The HOA’s letter characterized the lower-cost city-recommended repairs as a “band-aid” approach. City officials say the higher amounts estimated by the HOA would fund more extensive repairs than what is necessary.
Centennial’s HOA has not requested a specific dollar amount in aid from the government, but would like there to be more consideration of using housing funds for upkeep of exiting units.
Centennial was built in 1984 by a private developer, but is subject to deed restrictions under the Aspen/Pitkin County Affordable Housing program, which put income limits on owners and require a full-time work schedule in Pitkin County.
There are 93 owner-occupied condos, which are managed separately from the 142 rental units at Centennial, located at the base of Smuggler Mountain.
“It has come to our attention that design flaws and ‘value engineering’ have left us with serious structural damage, water leaks and mold issues,” the HOA letter states.
The HOA board argues that because Centennial was one of the first projects built under the affordable housing program, it didn’t receive the six-figure subsidies that current developments receive from the government.
“Had Centennial been granted a fraction of the subsidies of current projects, there is no telling how much sturdier, more durable, quieter and more energy efficient it could have been,” the HOA letter states.
HOA representatives are asking for some of the government’s housing funds to be spent on maintaining existing supply, instead of exclusively acquiring land and building more units.
Chris Council/Aspen Daily News
The south-facing side of a portion of the 300 building located at Teal Court in the Centennial affordable housing complex has recently had its siding replaced.
“Instead of asking for a check or a hand-out, we’re suggesting that for the greater good of the program we want to sustain what we’ve got,” said Centennial HOA board member Jason Closic.
The issues at Centennial have been discussed among elected officials for more than a year, with the city taking the position in April 2011 that they are owner-occupied units and shouldn’t require public assistance.
“Our view is you own this building and it’s your responsibility,” said Assistant City Manager Barry Crook, adding that he expects the HOA to request either a grant or a loan from local governments. “It’s not government’s responsibility. ... We don’t want to start that precedent.”
The city will have spent about $65,000 in hiring consultants to assess the Centennial problems, including a mold expert and a building and engineering firm, Crook said. The city plans to soon embark on a more detailed construction estimate for all of the owner-occupied buildings at Centennial, which will cost about $10,000. Pitkin County has agreed to pick up half the tab related to the city’s Centennial efforts, Crook said. The HOA also will contribute to the analysis, he added.
Crook said the city will assist in other ways, including possibly helping the HOA amend its declarations so that for any unit that is sold, a portion of the closing cost would go into a capital reserve fund dedicated to major repairs on the buildings.
Some buildings have been repaired, including replacing the siding, framing and windows, while also addressing the roof design that allows water to run down the side of the structure, causing damage from within.
Closic said the HOA hasn’t neglected its capital reserve fund, and has drawn significantly from it to address urgent repairs — but there isn’t enough to fix what the association has characterized as units designed and built cheaply and incorrectly. Capital reserves should be used for things like repairing roofs, not fixing flawed construction.
“There are major design flaws,” he said. “Now we have tens of thousands of dollars in repairs. ... We’re kind of stuck with it.”
Closic and the HOA board want to work with council and the commissioners on a mutually-agreed-upon solution, which hopefully will be worked out at next week’s meeting.
“Until that meeting happens, we don’t know where we stand,” he said. “We are asking for possibilities. ... We need options and we are saying ‘let’s work together on a solution.’”
Closic said based on conversations with other owners in the affordable housing program, preserving their units for the future is a concern and they aren’t certain that their capital reserve funds will cover all of the costs.
Centennial appears to be the poster child in the APCHA program for an aging inventory that was questionably built and is now in need of major repairs. It’s also shaping up as a test case for questions of what government’s role is in helping homeowners, who under the rules, are subject to deed restrictions and capped sales prices.
“When any of our neighbors are forced to sell because the financial burden of re-constructing the buildings has become too much, they will not recoup one dime of the money they put in to keep this place standing,” reads the HOA letter, which also points out that would-be buyers might not be interested in purchasing a unit because of financial burdens, mold and structural problems.
The HOA letter asks government to allocate some housing funds for sustainability.
“Please let’s utilize that money to repair Centennial and not have it be a blotch on APCHA’s and the Aspen community’s record,” the letter reads. “We have agreed to the rules, restrictions and limitations that allow us to live at this APCHA project. ... Please do not turn your backs on this community asset. Please help us keep our homes standing and safe now and into the future.”