The Aspen-Pitkin County Housing Authority board of directors voted unanimously Wednesday that Julie Vernier is out of compliance with the deed restriction on her home because her husband owns other residential property in Aspen.
Vernier owns an employee housing unit located at 501 Williams Way, a three-bedroom, two-bath, 1,200-square-foot home on on Aspen’s north side. Last summer she married James Berger, who subsequently bought a home located at 100 North Eighth Street for $2.44 million. According to a letter from the couple’s lawyer, Kenneth Citron, “her husband (purchased) his own home, in order to spend more time close to Julie and her family.”
No homeowner within the APCHA program is allowed to own additional property locally. After receiving a complaint from a neighbor that Vernier was not living in her home at 501 Williams Way, APCHA sent her a notice of investigation regarding her residency. An initial compliance check corroborated the claim that Vernier was not occupying the home, a requirement of owning within the employee-housing program. Additionally, the office was told at that time that Berger had purchased a home within the exclusionary zone.
On Aug. 6, APCHA sent Vernier a notice of violation, informing her that, per her deed restrictions, she must sell one home or another. Initially Vernier, through Citron, notified APCHA that she would like to transfer the deed of 501 Williams Way to her 22-year-old son, Joseph.
Joseph Vernier filled out an incomplete application to APCHA, showing a work history in Aspen’s service industry, listing Cache Cache and Tatanka as his current employers, along with previous experience at Pinions, Pyramid Bistro and Big Wrap.
However, in order to qualify for employee housing, residents must work within the county for 1,500 hours annually. Joseph Vernier’s tax returns from the last two years show that he did not meet this requirement, having also reported income from California, and checking the box marked “not a resident” in Pitkin County.
At Wednesday night’s compliance hearing, Citron clarified that they only wanted to focus their appeal on the initial ruling regarding the ownership exclusion zone purchase.
Citron said that Berger purchased the free market house independent of Vernier, and the two had even signed a prenuptial agreement clarifying that she would not be privy to the house if the marriage were to end.
He said that Berger does not live or work in the valley, and instead uses the home to vacation with his two sons from a previous relationship and as an investment property.
“He uses it from time to time as a vacation property for him and his sons to enjoy. He also utilizes it as an income-producing property. It is not a primary residence by any stretch of that term,” Citron said.
He argued that APCHA’s definition of what constitutes a household is too vague, but that Berger should not be considered part of Vernier’s household because he does not live in the valley.
“The violation is that, because Jim is allegedly a member of the household, his purchase of this part-time, income-producing residence renders her ineligible. We do not believe that that is what is contemplated by the guidelines,” he said.
APCHA lawyer Tom Smith argued that the guidelines are written to prohibit exactly the situation as Citron described.
“It’s pretty crystal clear that if a married couple … owns more than one property, they are in violation of the prohibition against owning other property in the ownership exclusion zone,” Smith said.
He acknowledged that a denial by the APCHA board could be followed up by an appeal in court. He said a judge would review the case by looking at the purpose of the ownership exclusionary zone rule.
“It’s quite clear that the whole purpose of the housing program is to provide housing for qualified employees who, in the absence of subsidized affordable housing paid for by the community, have no other options for living in the valley,” Smith said. “If you have other housing options you don’t belong in the program. Period.”
Vernier remained quiet through the majority of the hearing. She was asked if she knew her husband’s purchase of the free-market home would put her employee housing unit in jeopardy.
“Sadly, I did not,” she answered.
While board members acknowledged the difficulty of the situation, they agreed with Smith’s assertion that the APCHA guidelines were expressly written to prevent a couple from owning free-market housing on top of owning a deed-restricted home.
Board alternate Rachel Richards said that, like Vernier, she has lived in APCHA housing for the last 30 years, and for the last 16 years has had a partner that doesn’t live with her in part because he would not meet the local workforce qualifications.
“We all live with the rules that we bought in to,” Richards said. “He married into APCHA when he married you.”
The board has ruled similarly in previous cases in which one spouse owns local free-market housing. Board member Rick Head said it was prudent for the decision-making to be consistent with past actions, and warned of the precedent that allowing Vernier and Berger to own separate homes could cause.
“If we approve this appeal, it would completely undermine what we are trying to do in this program,” Head said.
Citron said the board was setting a separate precedent in discouraging marriage to those who are in the housing program. He claimed Berger was being faulted for being a smart businessman.
“To deny the appeal in this case would essentially be sending the message that APCHA believes that people shouldn’t get married. Or, if they get married, that they shouldn’t get married to someone who has the wherewithal to purchase an Aspen property for reasons other than their own primary residence,” Citron said.
The board voted 5-0 to deny the appeal.
“The spirit of APCHA is not in dispute,” said George Newman, who represents Pitkin County commissioners on the board of directors. “Someone who has the wherewithal to go out and buy a free-market unit… does not qualify.”