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Original article URL: http://bridgemi.com/2015/02/how-posh-aspen-and-jackson-hole-made-housing-affordable-for-year-round-workers/

Economy & competitive position

How posh Aspen and Jackson Hole make housing affordable for year-round workers

If it doesn’t look like Section 8, it’s because it isn’t. But this condo complex in Aspen, Colo., subsidized by the Aspen-Pitkin County Housing Authority, provides affordable housing for year-round, middle-class residents. (Photo courtesy of APCHA)

If it doesn’t look like Section 8, it’s because it isn’t. But this condo complex in Aspen, Colo., subsidized by the Aspen-Pitkin County Housing Authority, provides affordable housing for year-round, middle-class residents. (Photo courtesy of APCHA)

Downhill skiing has been going on in Aspen, Colo., since the end of World War II, but it wasn’t until a generation later that people from well beyond the state’s borders started visiting and seeing for themselves what they’d been missing.

The charms of Aspen, where the Roaring Fork Valley emerges from a national forest and four ski areas offer world-class slopes and conditions, about 200 miles southwest of Denver, stole the hearts of wealthy second-home buyers, and the market responded accordingly.

The town was being transformed by growth and its accompanying problems, including skyrocketing housing costs. It was a time of high inflation in the national economy, and new officeholders in the region “wanted to put the brakes on in an aggressive way,” recalled Michael Kinsley, who was elected a Pitkin County commissioner in 1975.

That same year, the Aspen-Pitkin County Housing Authority was founded, charged with creating a program to provide affordable housing for year-round residents and seasonal workers who were unable to afford to buy at market rates in this vacation destination.

The authority set up a second housing market, separate and insulated from spiking housing costs, to be made available only to local residents employed in the county. And not just poor ones, either – depending on assets, the type of housing desired and other factors, individuals can qualify these days with incomes of up to around $250,000.

Today, nearly 3,000 units, from studio apartments to single-family houses, offering seasonal and year-round occupancy, are in the pool controlled by the authority. Teachers live in subsidized housing. Waiters, bartenders and ski instructors do, too. And Kinsley, who now works for the Rocky Mountain Institute, a think tank in Snowmass, Aspen’s neighbor, has his own home through the program. He bought it in 1992 for $140,000, a 1,300-square-foot house that belongs to him, but with deed restrictions imposed by the housing authority.

It can’t appreciate more than 3 percent in value a year. If he sold it today, Kinsley said, it would go for a little under $300,000. On the open market, the price would be “at least a couple million, and it would be immediately torn down.”

It sounds audacious today, given the political divide over what role government can or should play in the housing market. But it’s hard to find anyone who lives in Aspen year-round who would like to abolish the authority, because they know what the result would be.

“Without affordable housing, I don’t know how we’d survive,” Kinsley said.

Aspen, he and other housing authority supporters claim, would become a ghost town of the very wealthy’s second, third or fourth homes, standing empty for most of the year. There’d be no need for public schools, grocery or hardware stores. Ski-resort workers, wait staff and others who support the tourist economy – as well as even some doctors who set ankles broken on the slopes – would have to commute long distances from more affordable communities down-valley. That’s a scenario that sounds pretty familiar to residents in the resort hub of Charlevoix and Emmet counties, where workers already find themselves pushed back from shoreline communities, where similar market forces are driving rents and prices out of reach.

That’s one reason the Aspen business community is among the authority’s biggest fans, Kinsley said: “If the program went away, they’d be screwed.”

Not poor, not rich

Here’s how the Aspen program works: Individuals may apply for what’s known locally as “employee housing” if they work a minimum of 1,500 hours per year in Pitkin County, own no other property in the Roaring Fork Valley (which encompasses Aspen and nearby communities), and maintain their employee home as their sole residence. Income eligibility is on a sliding scale and takes into consideration assets and the type of home each individual is seeking.

A typical listing on the authority’s website might be for an 840-square-foot, two-bedroom apartment in a complex, renting for $1,234 a month, heat and water included. Occupancy is limited to four, with an income limit of $56,100 for two adults, $63,120 for three adults and $70,080 for four.

Housing may be purchased outright by year-round residents, with deed restrictions imposed by the authority. Recent listings range from studios to condos to free-standing houses, at prices from $112,537 for a studio condo to $449,000 for a two-bedroom condo.

In the early days of the program, housing stock was added by requiring developers to set aside a certain number of units in new projects, or provide cash in lieu of units, which is used to purchase housing elsewhere, said Cindy Christensen, the authority’s operations manager.

In 1990, the county passed a real-estate transfer tax of 1 percent on all land sales. Today it provides a source of revenue for the authority to purchase and maintain properties. Last fiscal year, the tax generated approximately $8.4 million in revenue, Christensen said, which was used to buy and renovate additional units.

“I can think of 14 (real estate) brokers I know who live in employee housing,” said Tory Thomas, president of the Aspen Board of Realtors. Employee housing is so widespread among year-round residents that it isn’t even remarkable anymore.

Thomas said even the transfer tax isn’t an issue at closings.

“The wealthy don’t pay attention to it,” she said. “The ones who are a little more community-minded, who hire the instructors, who pay attention to their wait staff, they like it.”

Red state, red-hot market

But this is liberal Aspen. It has to be an outlier, right? Head northwest, to more politically diverse Jackson, Wyo., home of Dick Cheney’s clan and a Walmart heiress. Teton County has a similar housing program, for similar reasons: Median home prices are relentlessly marching toward the $1 million mark, said Stacy A. Stoker, interim director of the Teton County Housing Authority. Without some sort of help, middle-class workers who make the good life possible in Jackson Hole wouldn’t be able to live there.

“It drives the economy,” Stoker said. “It’s not a handout or entitlement. It’s win-win for business and community. Without workers, business can’t provide the services people are wanting.”

Teton County has similar restrictions on income and assets to qualify, but far less housing stock – over 400 rental units, another 500 available to buy (as in Aspen, with deed restrictions). Stoker admits she’s envious of the revenue raised by Aspen’s transfer tax; in Jackson, units are added mainly as set-asides, under agreement with developers building market-rate projects. The authority has been able to buy some land, but “there’s not an abundant source of money.”

Prices aren’t quite as extreme in Jackson as they are in Aspen, but they’re moving in that direction, Stoker said. Housing is more affordable in adjacent counties, but both carry 35-mile one-way commutes, one along the Snake River Canyon Road, another over an 8,500-foot mountain pass, both of which can be hazardous in winter.

The biggest need now is for more housing for service workers.

“Last season, 12 percent of the (seasonal) workforce was camping. All summer long,” Stoker said. “Those are dire straits. We have some major storms here in the summer.”

Meanwhile, in Michigan

Michigan’s northern resort country isn’t precisely equivalent to either of these western examples. There’s more land here, less constrained by mountain faces, and prices are lower. But the problem shapes up in a similar way. Networks Northwest, formerly the Northwest Michigan Council of Governments, published a report on the subject last year.

The report noted problems with shortages of affordable housing in northwest Michigan, deteriorating housing, high energy and commuting costs and “a focus on large-lot single-family home development has limited the types of homes available, which results in fewer housing choices for small households, the growing number of seniors in the region, and those with disabilities.”

Denny Brya, general manager of the Bay Harbor Company, which oversees the luxurious mixed-use development outside Petoskey, said housing is a chronic problem for the resort’s seasonal workers.

“It’s either a dump, or unaffordable,” he said.

The Networks Northwest report found that a minimum wage worker would need to work 57 hours a week in Cheboygan County to afford an average rental in the county, 60 hours in Charlevoix County and 70 hours in Emmet County.

Sarah Lucas, regional planning department manager at Networks Northwest, said the need for rental housing is particularly acute, with the state’s foreclosure crisis pushing many people out of home ownership, young people waiting longer to buy, and stagnant incomes. The result: workers are pushed farther from vacation communities where they work to find affordable housing, raising costs for service workers.

Lucas sees the problem as one that will require widespread cooperation: The nonprofit community can attract grants and subsidies, government can address zoning and land-use issues, and developers can build or renovate units for affordable housing.

Whether there might be the political will to institute a program like Aspen’s or Jackson Hole’s is another matter, however. Grand Traverse County has a land bank and an affordable-housing trust fund, established in 2011 and funded through sales of tax-foreclosed properties. The fund is mainly distributed through groups like Habitat for Humanity and used to subsidize low- to moderate-income housing needs. Creating more affordable housing was a strong component of The Grand Vision, a 50-year strategic growth plan for the county.

“It’s a promising model,” Lucas said. “But it’s the only one we know of in this area.”

Business needs help, too

Dream big, encouraged Kinsley, the former county commissioner from Aspen.

The main flaw with the Aspen program, 40 years down the road, he said, is “we didn’t do enough. We focused all our attention on residential, didn’t think of affordability in the broader sense, with commercial property, so that working people can become business people.

“The fact we did this in Aspen isn’t just about a ski resort trying to maintain employees, but what’s happening anywhere property values are high,” he said. “We can either say to hell with it, or try to maintain community. That’s the fundamental social value involved here. Is there economic value in community? I think there is.”

Staff Writer Nancy Derringer has been a writer, editor and teacher in Metro Detroit since 2005.

6 comments from Bridge readers.Add mine!

  1. John S.

    The wealthy prefer to live and vacation around other wealthy people (perhaps in part because they can afford to do so, are more comfortable around people like themselves, and like to signal to other wealthy people how well they are doing). Vacation home towns like Charlevoix, Petosky and a few others are more successful in attracting very wealthy people than other towns. The affordable housing problem would be less of a problem if the wealthy spread their wealth around a bit more. Most of those who are wealthy didn’t become wealthy by accident. They pay attention to what they are paying in property taxes. Perhaps the state, in order to attract wealthy people and developers to towns that are not quite as attractive as Charlevoix and Petosky should consider letting owners of vacation properties in those towns pay homestead rather than non-homestead taxes as an inducement to buy and build there. Giving yet another tax break to the wealthy isn’t popular policy, but it might work to spread the wealth around.

    1. Gerald Wilgus

      So more arguments promoting a trickle-down economy. That sure has worked out well for us these years as our infrastructure goes to hell and the monetization of life leads us on a race to the bottom.

      Hell – the wealthy love trickle down because they can piss on us and tell us its raining.

  2. don grimes

    It is totally unrealistic to compare any place in Michigan with Jackson Hole or Aspen. Average Personal Income Per Capita in 2013 in Teton County (Jackson Hole) is $105,821, in Pitkin County (Aspen) it is $83,425.

    The value for Michigan is $39,055, highest income county in the state (Oakland) is $57,035; Charlevoix $41,004; Cheboygan $32,573; Emmet $42,653. In the U.S. overall it is $44,765.

    Average Annual Wage in Accommodations & Food Services Industry (NAICS 72) in 2013 are also much higher in the “rich” communities.

    Pitkin $31,424
    Teton $25,770
    Charlevoix $19,102
    Cheboygan $15,093
    Emmet $17,596

    U.S. $18,174

    Having rich people around does raise the wages of lower-wage service industries, and having lots of rich people around does generate more resources to provide higher levels of social services. Unfortunately you have misjudged the amount of money in Michigan’s resort communities.

    1. Mr. Reality

      Don,

      Please don’t start bringing any logic or reason to this “Paradise” stories. The fact is what the writers of these stories want is for the world to work in a way that fits their preconceived ideas. They want high paying jobs in areas where there are the people to support them and for “young” people to be tied to a geographic region for no other reason than it fits the writer’s preferred narrative.

      Why is so wrong that people make rational choices based on their individual circumstances. I want more (fill in the blank) so I move to where more (fill in the blank) is, pretty simple. I want to be a cutting edge cancer researcher, I move to where they do cancer research. I want to be a teacher, I move to where teaching jobs are. I want to go places where there are more young people, I go there.

      This series of articles is inane and has nothing to do with making people’s lives better, just about romanticizing a fallacy that has never existed, that somehow we stop change and make the world dance to our tune.

      1. don grimes

        Personally I like the people I know who work for Bridge, but I do fear that they have let their “convictions” that we need to do something to help lower income residents obscure what the data are really saying. The data clearly show that communities with lots of higher paying jobs, like Manhattan or Boston or San Francisco or Seattle helps to increase the wages in lower wage industries, although much if not all of these income gains are consumed by a higher cost of living, especially housing. Less well documented is that communities with lots of well off retirees also tend to raise the wages in lower wage industries, but once again much of these gains disappear when you adjust for the cost of living. The communities with disproportionately large shares of higher income residents also tend to have more social services for the less well off. Thus, places with the greatest income inequality tend to be the most liberal. Which leads to the politically incorrect conclusion that you should want more inequality if you want to help the less well-off, at least in an absolute sense.

        The primary data problem I have here is that the author seems to think that these resort communities in Michigan fall within the “well-off” category. Including Cheboygan county is way off the mark (dividend, interest and rent income per capita in 2013 of $7,984 ranking 1,003 of 3,112 BEA counties), but even Charlevoix (DIRPC of $11,931 for a ranking of 246) and Emmet (DIRPC of $11,457 ranking of 294) are not in the same category as as Pitkin (DIRPC of $35,466 ranking of 3) and Teton (DIRPC of $55,725, ranking of 1). Of course any skier would have reached that conclusion without bothering to collect the data.

        Michigan’s resort counties are never going to attract large numbers of high wage knowledge industry jobs. I don’t even know why that is part of the discussion. The relevant question is how can they attract even more wealthy retirees? And how can the Lake Huron communities catch up to the Lake Michigan communities in attracting even some well-off retirees. I don’t see how worrying about the cost of housing for lower wage workers addresses that question.

  3. Sue

    Those swell accommodations subsidized by the benevolent authorities in Pitkin County aren’t a drop in the bucket. Teachers, waiters, bartenders and ski instructors are the upper class service workers. How about the maids and busboys, etc.? The great majority of service workers in Aspen live down the valley in towns like Basalt and ElJebel. They commute to work on public transportation. It’s a long trip at the end of a long tiring day at work.

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