Last month the city of Aspen disclosed it was in negotiations with the Centennial housing complex to make that project’s deed restrictions on its 148 affordable housing rental units permanent. The city is currently in the midst of a due diligence period to spend $10 million to preserve those deed restrictions, which don’t expire until 21 years after the death of 72- year-old Michael Kinsley, the last surviving member of the Pitkin County Board of Commissioners that approved the development.
This arbitrary and oddly macabre “county commissioner clause,” negotiated between the BOCC and Centennial’s developers in 1984, means that the current Centennial deed restrictions have at least 21 more years to run, and hopefully will run much longer than that. Here’s to your good health, Michael Kinsley, for every reason imaginable.
What remained undisclosed — or more accurately, hiding in plain sight until this week, in the form of a Monday morning Aspen Times story on the matter — was that Centennial is merely one of 22 affordable housing developments comprising 502 individual units, of both the ownership and rental type, with deed restrictions that expire at some future date. That’s fully one sixth of APCHA’s approximately 3,000-unit inventory. One hundred seventy eight of the units are of the ownership type and 324 units (inclusive of Centennial’s 148) are of the rental type.
To further complicate matters, these deed restriction expirations come in two flavors. As described in Monday’s article, the aforementioned “county commission clause” impacts 234 total units — the 148 Centennial rental units and 86 units in individual ownership. The other 268 units (92 ownership and 176 rental) carry a less macabre, but still arbitrary 50-year deed restriction expiration timeline. The first deed restrictions, applied to the Castle Ridge project in 1982, expire in just over 12 years, in August of 2032. All 268 of the “50-year” deed restrictions sunset by 2040, making them, not Centennial, the most urgent ones meriting efforts at preservation. The earliest Centennial’s deed restrictions could sunset under the “county commissioner clause” is 2041.
Make no mistake, this is a huge public policy issue, and not merely a housing issue. Assuming an average of two people live in each unit, about one of every seven Aspen residents is set to be directly impacted as these deed restrictions roll off. And when such a large percentage of a community’s population is directly impacted, you can bet that the ripple effect of indirect impact will flow to every corner of the Aspen/Pitkin County community.
City staff put the estimated current replacement cost of Centennial’s 148 units at $85 million, or $574,000 per unit (148 units divided into $85 million equals $574,324). Extending this estimated per-unit cost as a proxy for the replacement of all 502 deed-restricted units results in a total potential replacement cost of $288 million ($574,324 times 502 units equals $288.3 million) were all such units to convert to free market status. That $288 million constitutes just under three decades of housing development real estate transfer tax and sales tax revenue, at its current run rate of about $10 million per year, give or take. Three decades, not three years. That is a long time to tread water on affordable housing development.
It seems like the kind of policy issue that should be front and center in a forward-thinking community’s planning efforts, yet the most recent iteration of the Aspen Area Community Plan – which is Aspen and Pitkin County’s central strategic planning document, published in 2012 — makes no mention of this issue. Perhaps this is because no one central to the effort knew this issue even existed, or because it was considered so far in the future it wasn’t worth mentioning. How either explanation is possible boggles the mind.
But in any case, it’s an issue that can no longer be ignored. So, in that sense, kudos to city of Aspen staff for bringing it forward in the form of the proposed Centennial project transaction. But in another sense, the manner of its elevation is, in my mind, a far more serious matter.
That far more serious matter is that the city council is effectively setting the price of replacing one sixth of the community’s affordable housing stock in a public policy vacuum. By negotiating the proposed Centennial transaction, $10 million to perpetually preserve deed restrictions that don’t expire for at least 21 and probably more like 40 years, outside of the larger context of what is clearly a generational issue, the council is acting in isolation of Aspen’s and Pitkin County’s larger public policy landscape (remember it was the county commission that originally agreed to these deed restrictions). From density, to transportation, to government and utility service delivery capacity, to the environment, to the potential need for even higher taxes to support the hundreds of replacement units likely needed, this is an issue that merits a full community wide vetting before a course of action should be established.
With respect to the Centennial proposal, to pay $10 million today to preserve in perpetuity deed restrictions that may not expire for 50 years (if Michael Kinsley lives to be 101) may very well be a good idea when considered alone, believe it or not. But it’s not alone. It’s only one part of a much larger issue set to play out over the coming decades and impact every aspect of life in Aspen and Pitkin County. To engage in trying to solve such matters without first hearing from your constituents and comprehensively evaluating its impacts is to turn public policy-making upside down.