City hall

Aspen City Council on Tuesday discussed the next steps the city should take when it comes to developing affordable housing.

Aspen City Council held a wide-ranging discussion Tuesday about the future of the city’s affordable housing efforts.

There was little in the way of concrete direction, but the council and city staff began putting a frame around some big questions related to completing Burlingame, potentially redeveloping Truscott, getting a conceptual plan going for the BMC West parcel and raising the affordable housing commitment the city requires from developers.

The city is looking to chart its next housing steps now that construction is soon to start on 45 new rental units that are planned for three city-owned parcels. The units are being built by a private partner — Aspen Housing Partners — hired by the city, but will require over $25 million in cash from the city’s sales tax- and real estate transfer tax-supported housing fund.

The next logical step is to complete Burlingame. The city has plans and entitlements for 79 more units on the site where more than 160 units have been built in the last 12 years. Construction costs for those units are estimated at $44 million, according to a memo written for the council in advance of the work session.

The city also has $12 million budgeted to repair multiple buildings at Truscott, an affordable rental project near the golf course. The 30-year-old units are in need of energy efficiency upgrades and site work to fix drainage issues.

At Tuesday’s council work session, Councilman Ward Hauenstein said he would like to have a discussion about potentially scraping and replacing some of the buildings with higher-density structures.  

When that work eventually happens, the city is planning to provide temporary housing to displaced Truscott residents. One idea is to place those people in the newly-built Burlingame Phase III units, but that would require an extensive process as existing approvals only allow for owner-occupied housing at Burlingame. Converting that to allow temporary rental tenants would require a new approval involving the city and existing residents.

City staff noted that they could also use the newly built 45 units from Aspen Housing Partners as a temporary landing for Truscott residents, once those come online.

The city’s current five-year plan does not include any work on outreach and conceptual planning for housing on the BMC West lumberyard site, which the city purchased for $18.25 million in 2007.

Some council members said they would like to potentially move that up in priority to get something going on the site — which could support up to 150 units — sooner rather than later.

Councilman Adam Frisch said that “my heart says yes,” in response to a question on accelerating BMC West planning, “but my head says we need to be thinking about a capacity issue.”

“This is a really big, moving, exciting opportunity and I would love for some discussions to start but we have to be careful,” he said. “It seems like the next five years we have our hands full managing some version of a Truscott remodel or rebuild, as well as Burlingame.”

Financially, there also may not be enough cash on hand for the city to build anything at BMC in the near term, unless the city issues new debt. Councilman Hauenstein said he would like to see the notion of floating a bond explored to fund an accelerated BMC build out, as he observed that existing interest rates are less than construction inflation costs.

Assistant City Manager Sara Ott said she will return to council with some more information on any debt financing options, as well as what it would take from a staff work program perspective to get the ball rolling on BMC.

“We have some homework to bring back to you for you to be able to have a thoughtful conversation on how [BMC West] fits into your priorities,” she said.

Digging the housing hole

The council also asked city planning office staff to come back with more information on options for increasing affordable housing mitigation rates.

Much of the direction on mitigation rates appears to be a result of discussions surrounding the Lift One Lodge and Gorsuch Haus, the two hotels anchoring the Lift One corridor project which includes a new chairlift that voters will decide on March 5. Both projects benefit from breaks on affordable housing mitigation enshrined in city code for lodges with smaller average room sizes, such that the total affordable housing mitigation for the combined projects is around 30 percent, instead of the 65 percent that is normally required for new commercial development.

“I want to decrease the incentive for lodges,” Hauenstein said, lamenting the amount of housing given away on the project.

Councilman Bert Myrin wants to up the mitigation rate all developers must provide to 100 percent, he said on Tuesday.

Every time job generating development happens, just 65 percent of new employees are covered by existing housing policies. That needs to change, Myrin said.

“My suggestion is we phase out the 35 percent discount that we currently have,” he said.

It would take a while, perhaps upping the rate 1 or 2 percent per year until 100 percent is achieved, but that should be the city’s policy, Myrin said.

“When you are digging a hole and you find you are too deep in the hole, you stop digging — or some people do,” he said.

Mayor Steve Skadron told Myrin that he raised a “really good comment whose time may have come.”

The city looked at increasing the housing mitigation rate during the 2017 land use moratorium, but stopped at 65 percent (it was previously at 60 percent).  

Community development director Jessica Garrow said that during the moratorium, the planning office ran some scenarios on how much various levels of additional housing mitigation would cost developers and be passed on to tenants. There is an impact to the types of businesses that can be able to pay the rent if the mitigation rate gets too much higher beyond existing levels, Garrow said.

Skadron noted that “the principle is a good one” but “comes with consequences.”

“If housing is the No. 1 priority, are we willing to bear the consequences of 100 percent mitigation?” Skadron asked.

Any answer is expected to come in a series of future work sessions while this council is still in place and with the new city council that will be elected in March, but not seated until June.

Curtis Wackerle is the editor of Aspen Daily News. He can be reached at curtis@aspendailynews.com or on Twitter @CurtisWackerle.

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