In November 2012, at the request of City of Aspen staff, Centennial HOA agreed to have a construction estimate completed which would reconcile the greatly varying previous repair estimates ($7000-$100,000 per unit). The HOA requested that Athen Builders, who had spent the past 8 years repairing both the Centennial rental and owners units, be contracted rather than an outside company of the City’s choosing. City staff agreed. Athen stated that because of their extensive experience with the buildings and records, they would need about 3 weeks to complete a comprehensive construction estimate and plan. Their work was postponed due to a delay in receiving payment from the City of Aspen. In May of 2013, Athen completed their estimate and plan; $3.24 million and 6 years of repair work minimum for all 7 buildings. City staff, skeptical of the results, requested numerous revisions and additional details. The final report was released in July 2013.
A meeting between City staff and the HOA was convened to discuss the results. City staff claimed that while this estimate was 5 times greater than what they had anticipated, the affordable housing owners of Centennial were more than capable of funding these repairs through loans, special assessments, or refinancing without any adjustment in property values. HOA representatives began formulating numerous options for funding this project and requested meetings with City staff to realistically discuss viable solutions. Bank loans of this magnitude are not possible for a property of this type and value. (The deed restriction suppresses property values.) What they encountered was City staff lowering the repair estimate to $2.1 million claiming that the owners could fund the remaining $1.1 million at their convenience. HOA representatives were told that the amount of total appreciation of Centennial condos since they were built would cover the repair costs, but the amount of equity in each unit was unknown. (To recover the total appreciation, every owner would have to be the original owner, have not paid any interest on their mortgage, and would have to sell their unit negating the need to repair it.) In addition, City staff estimated that every owner at Centennial made at least $90,000 in annual income making an additional loan of $35,000 (avg.) per owner affordable so long as we raised the national standard of housing affordability from its current 30% of an owner’s income to 50%. And, with a 3% appreciation cap, affordable housing owners have a real advantage over the free market fluctuations despite the 10% limit on Capital Improvements and numerous other limitations of APCHA deed restrictions.**
As the current impasse seemed no different from the previous impasses, City Council and County Commissioners offered a joint work session of the elected officials, City staff, and Centennial Homeowners Association in order to reach some realistic understanding and solution. That meeting took place on March 4, 2014. City staff recommended that no affordable housing be offered any financial assistance for any reason EVER. And that Centennial owners were especially undeserving as they had been wholly negligent in maintaining their buildings and financially irresponsible in their budgeting. HOA legal counsel and Board members presented information which ran counter to City staff’s. Elected officials, acknowledging that perhaps there were aspects to the Centennial situation of which they were unaware or misinformed, called for “creative” solutions to sustaining current affordable housing inventory which were not specific to Centennial, but could be applied universally. City staff were directed to collaborate with Centennial representatives on new policies.
In the months following the joint work session, City staff, once again, submitted a proposal in which only the current 92 Centennial owners fund the entire repair project with no increase in equity or resale value. But this time, they offered, that, as a last resort, the City could lend some money to individual homeowners who could not get loans or refinance their homes and in return that homeowner would forfeit some or all of their unit’s appreciation. Centennial submitted a proposal which acknowledged the extensive efforts of the HOA during the previous 29 years and shared responsibility between all parties including the future owners who would be receiving a much improved product and the governmental entities who profit from and benefit from Centennial’s existence in their housing program. In addition, a framework for a policy for sustaining current affordable housing while protecting housing funds from abuse was presented in order to assuage governments’ fears that their housing funds would be abused by negligent homeowners.
This proposal was rejected outright and in its entirety by City staff. It is uncertain whether or not the proposal was ever presented to our elected officials who expressed interest in viable, comprehensive solutions.
**The national affordability index states that housing costs should be 30% of a person’s income. Mr. Crook felt that number could be raised to 50% for our affordable housing owners.
Since Centennial condos are considered Category 4 by APCHA guidelines, all owners there must earn at least $87,000 to purchase. Actually, APCHA guidelines set caps on incomes, not minimums.
Census information for Colorado places the average income for Pitkin County at $64,000. County Manager Jon Peacock states that County residents typically earn an average wage per job that’s 24 percent below the state average $58,000. (4/11/14 Aspen Daily News)
APCHA deed restrictions regulate owners’ incomes, where they can work and the number of hours, other property and assets they can posses, leaves of absence, subletting, and more. e.g. a unit cannot be passed on to an owner’s children through a will or otherwise unless their children qualify for it.