Aspen City Council Considers more Demo Allotments in 2024

Aspen City Council voted in December to continue conversations around adding additional units to demolition allotments in 2024. At the time of this writing, a vote to determine if more units will be offered and what that number could be / will be made at the council’s next regular meeting on Tuesday, Dec. 12.

Typically, since the Demolition Allotment Application Process’ inception in August of 2022, six units have been granted demo allotments per year to stay in line with various concerns. This includes modestly older homes being replaced with much larger and more complex new homes; demolition and construction waste impacts at the landfill; neighbor noise and other impacts from intense residential construction activity; and carbon impacts related to construction and long-term operations of redeveloped single-family and duplex homes.

However, in City Council’s action in response to appeals made by applicants who were denied allotments in prior years, it pulled four allotments from 2024 to appease appeals made from prior years, leaving only two left to begin the January 2024 application process. Though the Land Use Code permits the council to exercise such options, these additional units being considered for next year would not be pulled from future years but instead would be added as new units – in essence, breaking the six unit per year agreement.

While much of the language from first reading will remain the same onto second reading, Council member Bill Guth did request additional information regarding what the implied lifespan of an Aspen home is based on six demo allotments per year. In addition to his request for more information, he further expressed his continued disapproval for the program in its entirety – reminding that feelings were “very split on this program” among council members – and would not be supportive of anything outside a “full reversal and elimination of the program.”

“I don’t think this accomplishes anything beneficial for our community; it exposes the city to liability, we’ve been sued very recently as a result of council action on an allotment appeal,” he said. “That type of exposure will continue unless and until we get rid of this program that accomplishes nothing for our community.”

Council member Sam Rose echoed Guth’s comments about the program being “fundamentally flawed” and said that waste diversion should be the issue focused on rather than the limit of permits or limiting value on homes of longtime locals. Rose, while still expressing his desire to see the program removed entirely, asked that should the program continue, that the lottery be designed in such a way that future considerations are guaranteed to anyone denied permits who qualify.

Mayor Torre ultimately expressed his support with the information presented in Tuesday’s first reading but agreed that the process of getting demo permits issued in January needs to take place first before making improvements to the program are considered, along with possibly making more applications in the second half of the year.

NAR Weighs in With Supreme Court to Protect Private Property Rights

On November 20, 2023, NAR filed amicus briefs with the Supreme Court of the United States in two different cases in support of property owners facing unconstitutional violations of the Takings Clause under the Fifth Amendment. Costly and burdensome requirements imposed on property owners, such as obtaining land-use permits as a condition of using or developing their property that may be unrelated to the externalities of the development, may artificially increase the cost of real estate. Damage resulting from government action, such as the imposition of highway barriers that cause flooding of properties, but the injury goes uncompensated, also impacts fundamental property rights and potential development opportunities. At a time when many buyers are struggling to afford or find properties, government action must create certainty and stability in the housing market to promote development, support homeownership, and protect private property rights, which is why NAR is engaged in these various challenges.

In Sheetz v. County of El Dorado, California, a property owner applied for a building permit to construct a single-family residence on property that he owns, and the County required a land use exaction of over $23,000 in exchange for the building permit, which helped the County finance road improvements. The homeowner paid the fee and challenged the exaction as unconstitutional under the Takings Clause and the unconstitutional conditions doctrine which, as applied here, would prohibit the government from conditioning the approval of a land use permit on the owner’s conveyance of real property or money unless there is an essential nexus and rough proportionality between the government’s demand and the effects of the proposed land use. The Supreme Court agreed to hear the case and NAR submitted an amicus brief urging the Court to adopt a robust reading of the Fifth Amendment’s Takings Clause to protect private property rights from unjust government regulation. NAR was joined on the amicus brief (link is external) by the American Property Owners Alliance, the REALTORS® Land Institute, the California Association of REALTORS®, and Californians for Homeownership. Oral arguments in the case will be in January, with a decision expected by the end of June.

In Devillier v. Texas, a Texas highway project caused widespread flooding, but individual property owners were foreclosed from bringing an unconstitutional takings lawsuit against the state for compensation for the damage caused. The Constitution’s Eleventh Amendment grants states immunity from federal lawsuits brought by its own citizens, so the property owners filed their case in Texas state court, where Texas waived its immunity by removing the case to federal court. Once in federal court, Texas argued the inverse condemnation lawsuit should be dismissed because takings claims under the Fifth Amendment as applied to the states through the Fourteenth Amendment can only be brought against a “person” (under 42 U.S.C. 1983), which does not include a state. The Supreme Court will determine whether a person whose property is taken without compensation may seek redress under the self-executing takings clause of the Fifth Amendment, even if the legislature has not affirmatively provided them with a cause of action. NAR filed an amicus brief (link is external) in this case alongside the American Property Owners Alliance and the Texas REALTORS®. The Supreme Court will hold oral arguments in January and a decision expected by the end of June.

FinCEN Extends the Beneficial Ownership Rule Reporting Deadline for Certain Entities

On November 30, 2023, The Financial Crimes Enforcement Network (FinCEN) issued a final rule(link is external) amending the beneficial ownership information reporting rule to extend the filing deadline for newly formed entities formed in 2024 to file an initial report. The amended final rule provides newly formed entities 90 days instead of 30 days to file initial beneficial ownership information reports. The amendment only applies to entities formed beginning January 1, 2024 and before January 1, 2025. FinCEN issued a notice of proposed rulemaking in September 2023 seeking comments on the proposed extension. In issuing the final rule, FinCEN acknowledged that it received many comments on the beneficial ownership rule requirements and deadline but focused exclusively on newly formed companies and the reporting obligations for those companies. FinCEN explained that it will provide additional guidance and updates on other aspects of the rule in the future.

NAR will continue to provide additional updates and information regarding beneficial ownership information reporting rule.

Pitkin County Reduces Maximum New House Size to 9250 sq ft

This article first appeared in the Aspen Daily News on Nov 16^th:

The Pitkin County commissioners finalized a new rule Wednesday to reduce the maximum house size from 15,000 to 9,250 square feet, but there are a lot of “ifs” and “buts” attached to the move.

The big but is that the downzoning to 9,250 square feet is only an interim move. The board anticipates considering a broader range of land use code revisions in 2024 that would include reducing the maximum house size further, to 8,750 square feet.

“It will be back,” said Commissioner Patti Clapper. “We knew this was a way to get us moving forward.”

A citizen board appointed by the commissioners met for 10 months earlier this year to discuss how the land use code could be revised to help the county government achieve its goals of reducing its greenhouse gas emissions. The Community Growth Advisory Committee ultimately landed on a house-size cap of 8,750 square feet. However, leadership of the committee advised going with the higher figure of 9,250 square feet in this interim step to avoid a political slugfest. An interim step was recommended because it could take up to 18 months to adopt all the changes recommended by the committee.

“This was a hard-fought compromise to get to the committee’s recommendations,” County Manager Jon Peacock said.

But Cliff Weiss, a member of the growth committee, urged the commissioners to go with the lower figure right off the bat.

“I want you to all be a little bolder and take the lower number, which had the consensus of the advisory board,” Weiss said.

The commissioners were unwilling to go there, for now. They voted 4-1 to approve the 9,250-square-foot cap for most areas of unincorporated Pitkin County. They also approved more restrictive pockets within the county. The Brush Creek area, Capitol Creek and lower Snowmass Creek, and the Basalt urban growth boundary have a house-size cap of 5,750 square feet while the Emma area’s cap is 8,250 square feet.

Clapper cast the lone vote of dissent. “It’s not because I don’t agree with the house-size issue,” she said.

Instead, she couldn’t support the rest of the board’s decision to remove one of four exemptions from the cap. As proposed, the new rules would have allowed use of transferable development rights in some cases to exceed the 9,250-square-foot cap. Commissioners Kelly McNicholas Kury and Greg Poschman were solidly opposed to that. Commissioners Francie Jacober and Steve Child were convinced by their colleagues to eliminate that exemption for now and discuss it in greater detail later. Clapper said removing the exemption would be “unfair” to a handful of landowners.

Poschman countered that anytime there is a mass downzoning, some people will feel it is unfair.

“I feel when we make a change, those things happen,” Poschman said. “If we’re going to commit to 9,250, that’s what we’re going to do.”

The board bogged down at times during the roughly 2.5-hour meeting on exemptions and what chairwoman Jacober called “minutiae.” She urged her colleagues to keep the big picture in mind.

Jacober said scientific evidence shows that homes larger than 8,500 square feet generate greenhouse gasses and create other “environmental havoc” in an exponential way. That’s why the county wanted to reduce house sizes from 15,000 square feet.

“It’s not just because some of us take offense at really big houses,” Jacober said. “It’s really about responding to our climate action plan and trying to be responsible stewards of our county.”

The climate action plan identified buildings as the source of about 70% of the county’s greenhouse gas emissions. The growth committee’s report states that the largest homes are the most energy-intensive. Homes larger than 5,750 square feet comprised only 15% of the single-family home inventory in unincorporated Pitkin County in 2019, but emissions from large-home energy use accounted for 43.4% of the total residential energy use emission that year, according to a study conducted for the county that reviewed energy-use data for nearly 900 homes.

The reduced house-size cap to 9,250 square feet was effective immediately.

State News: Special Session Called to Address Property Tax Hikes

Gov. Jared Polis announced a special session of the Colorado Legislature after Prop HH failed. While he didn't announce a backup for the ballot measure, Democrats — who control both chambers of the state legislature — plan to introduce bills that would provide the same amount of property tax relief for homeowners that HH did, but they won't backfill all the lost revenue to local governments and special districts.

They would use $200 million already set aside from the general fund to fully backfill schools, and whatever is left would go to local governments and special districts that saw property values grow by less than 13%.

The plan from Republican lawmakers calls for more significant property tax relief — nearly $1.4 billion — and uses money from the general fund and state reserve to backfill lost revenue to local governments, schools and special districts.

State Senate President Steve Fenberg, a Democrat, called the Republican plan irresponsible, "If and when we hit a downturn, we're going to need those reserves. And if we don't jave them because we've used it all for backfill, then we are essentially just creating more problems for ourselves as a state," the state congressman said during a virtual meeting.

State Rep. Rose Pugliese, a Republican, insists relief from skyrocketing property taxes is a good use of the reserve fund, and the Democrats' plan, she says, doesn't go far enough, "While we believe in having a healthy reserve, it's also really important that we give real and clean property tax relief to the people of Colorado. $1.37 billion will really help our struggling families all throughout Colorado, and now is not the time for the government to be sitting on that money," the state congresswoman told CBS Colorado.