Make Aspen Hotels Pay Their Way With Employee Housing
Elizabeth Milias, CEO of the San Marino-based Milias Foundation, wrote an excellent commentary on the predicament with Aspen’s subsidized housing program. According to his calculations, 3,000 more units are needed (“Subsidized Housing – 3,000 more units is 12 Centennials”, columns, February 13, The Aspen Times).
Milias traces the history of the town’s development and rightly notes that the scheme essentially consists of “buying out” existing properties and then reselling them at a discount to locals.
Milias’ essay is a useful test question for young economists, especially when she asks, “How did we get here?” The correct answer is that the city failed to internalize the economic externalities imposed on Aspen residents when it allowed new hotel construction without requiring hotels and some businesses to build housing for their employees.
This problem is not new. Resort developers in remote areas have had to build employee housing for years. You can see such installations today in most of our national parks.
Recently, Aspen Skiing Co. recognized the externality it created and built housing for some of its employees in Willits. The other hotels should have done the same.
However, developers will not voluntarily build such facilities as it is a cost they cannot recoup.
The city should look for ways to get the hotels that caused the problem to fix it. Such action will reduce, but not eliminate the need for employee housing. Subsidized housing is needed for teachers, police, hospital staff and even doctors, if the community wants trained professionals to live in the city.
For example, I know of an excellent dermatologist who chose to stay in Denver because he couldn’t afford housing in Aspen where his children could attend Aspen public schools. He found good schools in Denver. This is the price to pay for doing nothing.