Housing

The Smuggler Mountain Apartments, shown here, are available for rent through APCHA to low-income workers. Proposed guideline changes would require residents seeking to rent to earn at least minimum wage, while those looking to buy could earn no less than $25,000.

Following the most recent Aspen Pitkin County Housing Authority board meeting, one member took to social media to express his concern about proposed changes to the program. Skippy Mesirow, the appointed city council representative on the APCHA board, posted a series of videos critiquing a new minimum earnings requirement to participate in the affordable housing program.

“Should everyone who works in Aspen have the opportunity to live in Aspen?” wrote Mesirow in the opening to his roughly two-minute video.  

The proposed rule change goes hand in hand with APCHA’s initiative to create a definition of what “affordable” means, in terms of the authority’s mission to provide affordable housing. Executive Director Mike Kosdrosky said APCHA is the only housing program that he knows of that does not have a standard of affordability.

“The intent of the program is that it’s a workforce housing program and there is this expectation that it’s meant to be affordable, but what’s affordable and how do we define that?” Kosdrosky said.

In June, Kosdrosky wrote a memo to city council that the go-to standard for affordability nationwide is that a rent or mortgage cost should be about 30 percent of a resident’s annual salary. Anything more than that is considered “cost burdened.” 

“Cost burdened households, particularly those in lower income groups, may be forced to make tradeoffs to meet other necessary household expenses, such as food, healthcare, and transportation, or in the safety, quality, and location of their housing,” Kosdrosky said.

A newly constituted APCHA board with policy-making authority has since been formed, and is conducting a comprehensive review of the housing program’s guiding documents.

Currently there are no minimum earnings a tenant or owner needs to meet to be in the affordable housing program, but there are minimum work requirements. Residents need to prove that they work in Pitkin County at least 1,500 hours a year in order to qualify for an APCHA unit. If someone was working those minimum requirements, and being paid Colorado’s minimum hourly wage of $11.20, their annual earnings would be $16,650. 

Under the proposed changes to the APCHA guidelines, a new provision now states, “to be eligible for APCHA rental or ownership properties, a yearly minimum earned income must be proved … . Ownership minimum earned income is $25,000 for 2019 and will be updated on a yearly basis.” The floor for rental units would be minimum wage times 1,500 hours.

“It’s morally bankrupt,” said Mesirow. “If you don’t make [1.5] times higher than minimum wage, we are telling you to pack your shit and go to Silt.”

Kosdrosky points out that someone making the 2019 minimum wage at APCHA’s minimum hours would earn $16,650 a year. For that individual to remain above the cost-burdened threshold, they could not spend any more than $5,550 annually on their housing, leaving them with $11,100 for all other expenses.

“Are we doing that person any favors by allowing them to live here?” Kosdrosky asked. “I would argue no, because the cost of living is just so high. So there needs to be some sort of minimum threshold to enter into the program to make sure we are not hurting people.”

But Mesirow doesn’t think the answer to Aspen’s high cost of living is to cut out those on the lowest end of the economic spectrum. 

“The whole point of the housing program is to have an inclusive community,” Mesirow said.

He worries that the minimum earnings requirement would have a rolling effect, keeping those most in need from moving up within the community. 

“Let’s be clear, the primary reason why African Americans, Native Americans, Hispanic Americans, have orders of magnitude less wealth and opportunity in this country is because they’ve never been able to buy a house, because they were redlined out of neighborhoods and they were unable to build generational wealth. And guess what, if this passes, redlining just came to Aspen.”

Kosdroksy said the measure is not about being exclusionary.

“There is compassion but then there is common sense,” he said. “It’s about worrying about the people we are trying to help. And making sure the program is affordable for every person that gets into the system regardless of category.”

Another provision that APCHA has suggested would be to limit residents from bidding to buy homes that are priced for those who earn incomes in higher categories. 

The restriction is explained in a memo for tonight’s APCHA board meeting. “A household will only be allowed to bid one category up. For example, a Category 2 household could bid on a Category 2 or Category 3 unit but not a Category 4 unit.”

The price ranges can vary wildly within each of APCHA’s ownership categories. Some homes rated for higher-income workers may be priced lower than those in the lower income categories, because a major determinant of a home’s price is the number of times it’s been sold.

Regardless of the subsidy on the sale price though, all other aspects of home ownership come at free market rates.

“It’s easy to sell someone a cheap Category 1 or 2 unit but then we unintentionally burden them because we are not helping them pay for the cost of ownership,” Kosdrosky said. “There is not a subsidy to pay for the cost of ongoing maintenance and we all know that cost is at free market rates, so they are competing with the billionaire households for the same labor.”

For that reason, there has been talk of eliminating sales in Category 1 or 2 households altogether as the program moves forward. Maximum earnings for Category 2 are $61,550 for a single person or $87,900 for a family of four. 

A regional housing study completed this year showed that the greatest need for housing in the valley comes from those earning between 60 and 80 percent of area median income. An APCHA study also showed that the rental rates by category give advantage to those earning higher incomes, while those in the lower categories are more frequently cost burdened. 

“We under-subsidized the lower income households in this program and we arguably over subsidize middle and higher income households. We need to turn affordable housing on its head,” Kosdrosky said.

But he said fundamental concerns like the affordability standard need to be defined first. Kosdrosky said that the lower category stock is not easy to fill, because there is less demand. He said many earning under $25,000 would prefer to live outside of Aspen anyway. When an applicant turns in a packet to APCHA, they only have to list the earnings reported to the federal government, which may not include cash tips, other under-the-table payments, or financial help from their families. Another provision that APCHA is working on to address affordable housing requirements is how to handle a resident who has a fund set aside for them in trust.

Mesirow was voted on to city council in his second bid for the position this spring. He ran on a platform that prioritized affordable housing and bringing the community together to form what he called a social contract. He said the work the APCHA board has been doing is starting to get on that path.

“The effort to actually understand and set expectations around incomes is really healthy,” Mesirow said. 

And he also worries about servers or other residents who are underreporting their earnings in order to score a spot in the housing system.

“We need to reinstitute the social contract around housing. People should be ashamed if they are taking housing away from someone who else needs it,” Mesirow said. “Right now that’s not the case, right? We don’t really have cultural expectations.”

But, he said, anyone who is working a job that benefits the community should get a shot at living in the community.

“I want to live in a community that has a housing program that says whether you are a busboy or a lawyer … if my meal depends on you and you want to be here, then you should have an equal opportunity through the lottery to do so,” Mesirow said. 

As proposed, the guidelines already have an inherent floor, because there is a minimum work requirement of 1,500 hours. For anyone working 40 hours a week, this means working about nine and a half months a year. Because it is a resort community, many of the hourly positions in retail and service are located within companies that close during the off-season months, so workers cannot put in hours for a full 12 months. The changes would keep the rental restrictions as they are — the state minimum wage multiplied by 1,500 hours. But those seeking to bid to buy a house would need to make $25,000 a year in order to throw their name into the lottery. A resident working a full 40-hour week with no breaks over the course of a year would only earn $23,088 at minimum wage.

The minimum earnings and bidding-up provisions are part of the APCHA board’s comprehensive line-by-line examination of the current regulations. The proposals would all be passed concurrently under an adoption of the new guidelines by a majority vote.

Other provisions the board will discuss during their review are the work requirements before residents are allowed to remain in their homes upon retirement, transferring employee housing stock among family members, qualifying tenants based on criminal records, and compliance regarding those who report themselves as self employed.

The board meets tonight at 5 p.m. to continue the discussions. Kosdrosky points out that they are sifting through almost 40 years of ad-hoc regulations that will take some time to get smoothed out.

“It’s a hodgepodge, it’s a patchwork, a quilt,” Kosdrosky said. “And it’s not a very pretty quilt.”

Alycin Bektesh is a reporter for the Aspen Daily News. She can be reached at Alycin@aspendailynews.com or on Twitter @alycinwonder.