Policy Developments and the impact on Aspen’s real estate environment
This week we saw two developments in policies that will have lasting impacts on the Aspen real estate market.
Less than one year ago the county commissioners tasked a ten person citizen board, named the Community Growth Advisory Committee, with the goal of finding ways to reduce the county’s greenhouse gas emissions through the county’s land use code. Their findings revealed that buildings are responsible for 70% of the county’s emissions. They also concluded that homes over 5,750 square feet, which make up only 15% of single family home inventory, were responsible for more than 43% of those energy use emissions.
This week Pitkin County commissioners approved a rule to reduce the total square footage of new homes from 15,000 total square feet down to 9,250 square feet. Transferable Development Rights, commonly referred to as TDR’s, which can trade for as much as $2,000,000 and are a tool for home owners to essentially purchase the right to build additional square footage, were also incorporated in the new rules. A few specific pockets of Pitkin County, specifically Brush Creek, Capitol Creek, Snowmass Creek, Emma and Basalt’s urban boundary received restrictions below 9,250 total square feet.
Colorado’s legislature introduced a bill that would more than quadruple property taxes for properties used significantly for short term rentals. In its proposed form, the bill states that homes rented for more than 90 days per year would be considered akin to lodging properties and hotels which are subject to a 27.9% property tax. Residential property is currently subject to a 6.765% property tax.
While Aspen and many other communities throughout Colorado have already imposed increased taxes on rental income, a bill of this magnitude would have an even more powerful impact on property owners who rent their homes for significant portions of the year.
We all know that real estate and markets are always changing and in flux, but these two recent developments have the potential to reshape Aspen’s real estate environment. Rental property taxes would likely spur sales of homes where rental income is a significant factor. While the aim for restrictions on total square footage in Pitkin County is to reduce emissions, I could anticipate this driving prices per square foot higher as well as increasing the value of existing homes above 9,250 square feet.
If you or someone you know is interested in talking more about real estate, buying or renting in the Aspen area, or the impacts of these two recent developments in regulations, get in touch with me today.
