Letters from Centennial HOA to Government Officials Pleading for a Reasonable Policy for Sustaining our Affordable Housing Inventory
May 17, 2012
Dear Aspen City Council,
The homeowners of Centennial wish to congratulate you on your stewardship of our Housing Program. We are pleased to hear that the program is flush with funds especially after the economic downturn of the last few years.
We are sending this letter to express our interest in the sustainability of the Housing Program. While there may be other options for the future of the Housing Program under consideration, we feel that the community’s best interests may be served in preserving the assets we currently have.
As you may be aware, Centennial is facing some difficult challenges as we move beyond our first quarter century. It has come to our attention that design flaws and “value engineering” have left us with serious structural damage, water leaks, and mold issues. As these problems arose, we took it upon ourselves to hire experts to investigate these issues so that a thorough assessment could be made. After consulting with engineers, architects, mold experts, building contractors among others, it is apparent that our buildings are in need of major repairs in order to be a reliable, habitable, safe and healthy environment for ourselves, our children, and pets. The estimates we received from these independent professionals were well beyond what the Housing Program would deem as affordable. This information was brought to the attention of City staffers who then hired their own experts. The City’s estimates for our repairs were less than one-tenth of the estimates that we were given.
The Housing Program is important for many reasons. Not only does it maintain a sense of community, but it is the reason that many of us still live and are able to live in this valley. The Housing Program has allowed many of us to put down roots and establish ourselves as citizens of Aspen and Pitkin County. Whereas much of our community is transient we have become the backbone of a resort area that people come to visit time and again because they feel a connection to the people that are its foundation. We provide the labor that keeps local businesses running year after year. Centennial, being one of the first projects, was built without the 6 figure subsidies that the current projects, such as Burlingame, enjoy. It was also built before any environmental initiatives were in place. Centennial enjoys a favored location in Aspen not in the heart of the city but easily accessible by foot, bike, or bus. We have common areas where neighbors can congregate. We are a high density development housing well over 300 employees and their dependents if we include the rental units. All these people serve the community in various ways and none of them contribute to the growing traffic jam that plagues the Highway and Main Street in the mornings and afternoons. Centennial is nearly an ideal project that would most likely never be built today. The land would be too expensive. The construction would require enormous subsidies. And most likely the area would be unavailable having been occupied by multi-million dollar second homes that would sit empty most of the time. Centennial is a community asset that while occupied by a few hundred people at a time does have turnover and opportunity for others in the area to utilize it.
In our current situation, we are collecting and spending significant capital reserves to address the severe and urgent damage to the buildings. We have engaged the City to assess our situation and provide some assistance so that Centennial is not lost to the community due to the current owners financial limitations. While we often meet with resistance when talking to City staff about our situation, we have complied with all their requests for further study. We live under the rules and guidelines of APCHA, but are considered to be fully independent, free market homeowners when it comes to addressing the original construction flaws that are now coming to light. Mayor Ireland has confirmed that Centennial was built as cheaply as possible using plans purchased from a development in Israel. We are plagued with buildings designed for a desert region with very little rain and no snow. There is almost no insulation and no vapor barriers behind our walls and what is there is water-drenched. The roof allows water to run down the sides of the building across siding that, for aesthetic reasons, does not overlap allowing water to leak in. The walkways and outer areas of the buildings draw water towards the buildings instead of funneling it away. Mold is growing at elevated levels creating a health hazard and compromising the integrity of the structure that keeps these units standing. Further compounding problems are our unpredictable and expensive insurance options due to the known issues with the building. We are required to carry insurance but will never be able to submit a claim to cover the current damage. The experts have said that this project is nowhere near today’s building codes and was barely up to code when it was built.
Recent newspaper articles have indicated that demand for new employee housing has slowed especially in the higher income categories. In fact, downvalley free market housing is now competitively priced with what APCHA can offer as deed-restricted. We agree that this situation may be temporary and the need for worker housing may again rise. Employee housing that has been developed recently requires subsidies of $200,000 – $400,000 in order to be offered at affordable prices and even then interest is soft. The BOCC seems to be suggesting that further subsidies are required, as well. Centennial received no financial aid in its construction and has the benefit of a highly desirable location. Had Centennial been granted a fraction of the subsidies of current projects, there is no telling how much sturdier, more durable, quieter, and more energy efficient it could have been. We have the opportunity now to correct these oversights. In fact, it is imperative since we have limited time to repair the damage or risk losing the integrity of the building and suffering safety and health risks.
While we debate the merits of building more housing downvalley possibly adding to the traffic congestion or further subsidizing projects that are unaffordable or not in demand even after significant subsidies, there are committed, loyal, long-term members of our community who are forced to rebuild their homes in the present so that Centennial will be there for future generations. When any of our neighbors are forced to sell because the financial burden of re-constructing the buildings has become too much, they will not re-coop one dime of the money they put in to keep this place standing. Will Centennial even be desirable to those now seeking housing considering the financial burden, mold, and structural problems they will encounter as homeowners?
We have been advised by City staff to “band-aid” our problems so that they can live with the fact that each homeowner only spent a few thousand instead of tens of thousands to keep their home standing. This is how the problem was created in the first place, by not thinking long-term. Centennial needs to be repaired so that the same problems do not re-occur in years or months. We should be energy efficient and environmentally friendly in keeping with the initiatives of the City and County. Centennial has a huge footprint in Aspen and should be a model, shining example of the effectiveness of the Housing Program. It should not be a mistake that we sweep under the rug while moving on to new construction that we can do right this time. We are winners of the Housing lottery. That winning bid is turning into a loser very quickly as we move from affordable condos into units with possible $90,000 – $100,000 assessments and no added value.
While much more care is taken into the construction of new projects yet with enormous price tags associated in subsidies and asking price, we ask that some of the funds generated for the Housing Program be allocated for sustainability. Please let’s utilize that money to repair Centennial and not have it be a blotch on APCHA’s and the Aspen community’s record. The current unit owners, not the previous ones and not the future ones, are being asked to bear the entire burden of Centennial’s repair. Either that or move back into the questionable, unstable world of Aspen’s rental market or move downvalley further splintering our community and adding to the line of cars that stretches to Buttermilk in the morning and well down Main Street in the afternoon. We have agreed to the rules, restrictions, and limitations that allow us to live at this APCHA project. Please do not turn your backs on this community asset. Please help us to keep our homes standing and safe now and in to the future.
We have complied with the requests of City staff in using our funds to rebuild another set of units. Considerable capital reserves were spent to rebuild a section in 2009 and to hire experts to assess the damage. The data regarding the status of these buildings and how they got this way is readily available for them to see. The experts have looked at the problems and made recommendations. There is no mystery. This was not neglect. Previous HOA Boards have followed a standard maintenance schedule. These buildings would have needed re-construction from Day One in order to have avoided these problems. As an HOA Board we are not tasked with recognizing major design flaws. We are there to administer the bylaws and make decisions representing the interests of our neighbors. Right now it is everyone’s best interest that these buildings be repaired and made safe and sustainable. We respectfully ask for assistance in keeping the current affordable housing affordable and not bankrupting those individuals who happen to live at Centennial at this point in time and whose only desire was for a reliable place to live.
We respectfully request a public or private discussion with the City Council on these matters. Please contact the Centennial Homeowners Association board members so that we may schedule a meeting time. Thank you for your time and consideration.
Centennial Homeowners Association
July 30, 2012
Dear Mr. Peacock,
Per your request, the Centennial Homeowners Association wishes to work with the BOCC and City Council on the following goals:
- review data gathered from completed construction repair projects as requested by
BOCC and Council members
- find long-term solutions for keeping Centennial and other APCHA housing safe,
structurally-sound, desirable and affordable
- discuss a program of sustainability for the affordable housing program
- obtain the professional estimate for a complete repair and reconstruction of
Centennial through the process agreed upon by the BOCC and City Council
As stated in the letter we submitted in May, we believe that a program of sustainability for our
affordable housing program has become necessary at this time. Homeowners are being forced
into steep assessments and depleting capital reserves to maintain their properties’ basic
habitability. As APCHA appears to be well-funded with $10 million even after the downturn in
the housing market, now would be the perfect time to discuss a means to keep our current
housing “desirable and affordable” while continuing to buy and build for the future.
In our specific situation, it has been verified by numerous sources that Centennial was “value constructed.”
The buildings were put up barely to code at the time. Insulation, vapor barriers,
flashing were just some of the items that were minimized or left out altogether. Design flaws
have accelerated aging and exacerbated structural, health and safety issues. Contractors who
worked on the original construction in 1984 and those who have made repairs over the years
have remarked that the buildings were made to last 25 years. In addition, Centennial was built
without the large subsidies that current affordable housing projects require.
The current homeowners of Centennial, not the past or future ones, will be solely responsible for
the financial burden of re-constructing these buildings which a professional team has estimated
to be well beyond what would be expected of a typical HOA’s capital reserves and replacement
funds. We have just finished repairing another section of units at our own expense as previously
requested by our City and County officials so that we can generate an accurate estimate of future
repair costs and understand what these buildings require to remain safe and habitable. We wish
to develop a long-term plan and understanding of the costs involved as agreed upon at our last
Joint meeting with the City and County.
An opportunity for a development like Centennial will most likely never come again. We are in an ideal location within the City on a valuable piece of property. APCHA’s stated purpose is “To assure the existence of a supply of desirable and affordable housing…” With the numerous structural problems, water leakage, mold, age, high HOA dues, and expensive repairs, Centennial is less than desirable and increasingly unaffordable. We wish to discuss the possibilities and opportunities for our housing program to truly serve the needs of its current and future residents. While it is understood that this one meeting will not accomplish all our goals, we feel it is vital for the government entities that direct our affordable, employee housing program to consider its evolution while sustaining and improving its existing stock. We hope that the upcoming housing summit will also benefit from this discussion.
Centennial Homeowners Association
August 15, 2012
Dear Mr. Peacock,
Please express our appreciation to the members of the City Council and County Commissioners who were able to give consideration to our situation and that of our Housing Program last Tuesday.
The homeowners of Centennial are great supporters of the housing program and wish to see its continued success. Our understanding of some basic tenets of our Housing Program are:
1. APCHA places limits on the income and assets of affordable housing owners. It qualifies owners based on their limited abilities to earn a living and own real estate in Pitkin County. It caps the value of capital improvements and resale value of each unit among other restrictions. Yet, there is no limit to expenditures unit owners will need to make to keep their buildings from falling into disrepair.
2. Unit owners facing major repairs beyond normal and regular maintenance are solely responsible for funding those repairs. Previous unit owners are hoped to have contributed adequately to capital reserves. Future owners need only pay the sales price set by APCHA for the unit. Capital improvements made to improve the safety, livability and longevity of units are disallowed.
3. Homeowners who may be forced to sell when HOA dues or assessments for repairs become unwieldy may be stuck with their units. A unit in disrepair with high monthly dues or assessments will be undesirable or too expensive for most housing lottery applicants.
4. Even as APCHA re-buys and re-sells ownership units and regulates the conduct of the unit owners, APCHA expects that the unit owners and their HOAs will take full responsibility for preserving those units.
5. The APCHA mission statement of “assuring the existence of desirable and affordable housing…”, may be an empty promise as both older and newer developments experience significant safety, reliability, and functionality issues and large bills to correct those issues.
As you suggested, these topics are fodder for the Housing Summit. It was expressed at the Joint meeting that the Summit already has a huge agenda. These issues affect current owners and anyone who is or will ever be interested in owning affordable housing in Aspen. Hopefully, these issues will be given the attention they deserve so that our Housing Program will continue to serve the needs of the community.
In Centennial’s specific case, our integrity has been publicly thrown into question by various officials. According to our bookkeeper, our records demonstrate our financial responsibility over the years. Our record may not be perfect, but we have been solvent through our existence with appropriate capital reserves and account balances in the hundreds of thousands. Normal and regular maintenance have been and continue to be tended to. In 1992, dues were raised to pay for major repairs 8 years after Centennial was built. Dues returned to a normal level after those repairs were paid for. Even as we have spent tens of thousands in recent years, our account balance remains well into 6 figures. The current Centennial homeowners wish to improve and update the 28-year old units they have purchased, but must also manage a formidable reconstruction project.
We have significant evidence that Centennial was built inexpensively and hastily.
- lack of proper flashing
- little or no insulation
- no venting in attic or crawl spaces
- no vapor barrier to prevent intrusion an interior vapor barrier placed to retain moisture
- roof design that creates ice dams and causes water intrusion
- exterior areas designed to draw water towards the building
- venting of bathroom moisture into the building interior
- the use of unqualified labor during construction
- last minute change from a modular building plan to stick building without a proper blueprint or project manager
- no government subsidies
Oddly, it has been argued that when the HOA became aware of water intrusion in 1992 instead of taking the mitigation steps and building repairs they did which cost about $50,000, they should have started a major reconstruction project. Yet, in 2012 as we face major reconstruction, we are told our professional estimates are overblown and we need to do the minimum to prevent water intrusion and correct the “negligible” damage.
We wish to keep lines of communication open and work cooperatively towards solutions for Centennial’s situation, other troubled projects, and the Housing Program as a whole. Policies need to be revised and options for funding need to be secured in order for “affordable housing “ to remain affordable and desirable.
Thank you for your consideration.