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Home My WebLink Aboutagenda.council.worksession.202104261 AGENDA CITY COUNCIL WORK SESSION April 26, 2021 4:00 PM, City Council Chambers 130 S Galena Street, Aspen WEBEX www.webex.com Enter Meeting Number 182 578 5132 Password provided 81611 Click "Join Meeting" OR Join by phone Call: 1-408-418-9388 Meeting number (access code): 182 578 5132# I.WORK SESSION I.A.Community Office for Resource Efficiency (CORE) Update I.B.GMQS and Affordable Housing Update 1 MEMORANDUM TO:Mayor and City Council FROM:Mona Newton, CORE Executive Director THROUGH:Ashley Perl, Climate Action Manager MEMO DATE:April 19, 2021 MEETING DATE:April 26, 2021 RE:REMP Accomplishments and Future Funding Request REQUEST OF COUNCIL: The Community Office for Resource Efficiency (CORE) is before Council to provide an overview of recent accomplishments, share our near-term goals, and provide highlights of our focus into the future. CORE is requesting support from Council to develop a budget in the amount of $1.2 million from the REMP fund to support our programs and grants for 2022. A detailed budget request will be provided in fall 2021. Our mission is: Leading the Roaring Fork Valley to a carbon-free, net-zero energy future. By working with community partners from the inception of their ideas to completion, we share our passion and expertise in tackling the global climate crisis with solutions tailored to Roaring Fork Valley communities. We are working to achieve the CORE vision of a decarbonized Roaring Fork Valley, exceeding the state timetable by achieving 100% carbon-free for the city and county by 2040. CORE’s Value: ●CORE is a non-governmental member organization, working with our three utilities, eight communities, and community members to achieve carbon reduction goals. ●CORE can nimbly administer grants, partner with organizations, administer contracts, and provide innovative nonregulatory solutions. ●Our 12 directors are elected officials, utility representatives, community members and lead city and county staff that can support and influence policy on climate action. ●CORE connects with homeowners, including the most vulnerable in our valley, business owners and public building owners to facilitate changes in the building environment. ●Staff can be accessed to provide assistance and technical knowledge early in project development for affordable housing, private sector projects or others that will accelerate achieving local, and state goals. ●Working regionally on new building code adoption, CORE is helping to ensure new buildings achieve greatest reduction possible. ●CORE has proven success in leveraging Renewable Energy Mitigation Program (REMP) dollars through our partnerships, which translate to more than six times each REMP dollar spent. REMP funds are foundational for project success, but are not used to fund more than 50% of the cost of a project, ensuring that program recipients’ and other funds are leveraged. ●Despite the challenges of the ongoing pandemic, CORE has been working on its financial and organizational transition, securing new partnerships, preparing for new and different staff capacity, and starting strategic conversations about our future. 2 CORE’S IMPACT: With over 27 years of helping residents and businesses save energy, and supporting communities to set and achieve their climate action goals, CORE has demonstrated effective and transformative use of REMP funds, delivering 3x the carbon savings over the goal. Our staff use REMP funding for developing, delivering and tracking programs and grants, guiding community partnerships, and providing technical expertise. CORE’s on-the-ground impacts include: ●Exceeding targets: As of March 8, 2021, more than 6,936 residents, businesses and public entities have participated in CORE programs since 2010, making energy efficiency and renewable energy upgrades in their buildings, 30,487 MTe CO2e have been eliminated and $4,213,806 annual savings in utility bills. We have exceeded carbon reduction targets that we set for the past two years. ●Guiding and transforming our community: CORE helped transform the market for renewable energy in its early days, initiating one of the first solar rebate programs and wind programs in partnership with Holy Cross Energy. CORE’s success also lies in our ability to catalyze and implement high-exposure projects and our communities to adopt aggressive climate action goals. ●Ensuring building performance: CORE helps innovative projects go beyond municipal and county goals and codes, with advising and incentives. ●Expanding climate action: CORE provides a knowledge base for local communities that do not have the technical resources or staff capacity in our areas of expertise. The success and applicability of our programs and approach to assistance is evidenced by planned replication in Lakewood, CO and Summit County, and providing the initial grant that led to the formation of Clean Energy Economy for the Region (CLEER) in Garfield County in 2009. CORE continues to serve a key role in Energy Smart Colorado, which began in 2010 and continues with 10 partners. ●Fiscal responsibility: Throughout the years, CORE has judiciously managed its funds, enlisting third-party oversight by Reese Henry. A finance committee of two board members and the Executive Director has been set up to provide expertise and oversight for the financial activities of the organization, including budget development and financial statement review. This committee provides financial updates to the board and provides recommendations for board consideration. CURRENT STATUS:Despite the challenges of the pandemic in 2020, CORE advanced its strategic priority of carbon reduction by eliminating 3,569 metric tons of carbon dioxide equivalent (MTe CO2e) in the Roaring Fork Valley, through project design optimization assistance, carbon- free cultural awareness, and organizational flexibility. CORE’s success in providing programs, grants, and assistance demonstrates ability to both plan for the future and adapt to unforeseen events. Advancing Innovation through Beneficial Electrification ●The Arts Center at Willits (TACAW): CORE staff began conversations with TACAW Director and Architect at the outset guiding them to setting net-zero as their goal for the design of the first net-zero all-electric solar powered performing arts center in the state. CORE provided energy advising and a Randy Udall Grant for $60K. ●Basalt Vista (BV): CORE began working with BV in 2018 with our key role incenting Habitat for Humanity to eliminate bringing natural gas to the project and making it the first net-zero affordable housing project. CORE’s key 2020 contribution to the project was ongoing advising support to help ensure the project’s long-term success, including 3 help finding a sensible solution for heat pumps that were not properly installed in two of the units. ●Aspen Skiing Company (Ski Co) Affordable Housing: CORE provided $100K of Innovation Funds and more than 30 advising hours ($2400) to design and implement zero carbon housing at Willits. This new 150-bedroom housing project is a high-visibility electrification model for the RFV, powered by solar and 100% electric energy. ●CORE’s Path to Zero Program: CORE developed the Path to Zero, working with homeowners and business owners to achieve net-zero buildings in existing buildings, eliminating incentives for gas retrofits in 2019. ●Small Lodge Energy Efficiency Program (SLEEP): Provided $31,500 from REMP funds (the City matched those funds) and more than 100 technical assistance hours ($8,000) to over a dozen historic small lodges in the City of Aspen. Critical technology updates and consultations support these small businesses in achieving important efficiency goals and staying competitive in the hospitality sector. HOW CORE WOULD INVEST 2022 REMP FUNDING: CORE would continue to advance the City of Aspen Climate Action Plan through the following: ●100% beneficial electrification (eliminating fossil fuels) of more buildings through incentives, grants, and technical advising to residential and commercial building owners from project conception through implementation and refinement. ●Large commercial building efficiency projects – benchmarking, advising, grants. Support Colorado goals to benchmark buildings. ●Equitable affordable housing improvements - reach those who are most vulnerable, reducing their energy costs while contributing to Aspen’s climate and equity goals. ●Augment regional partnerships with Eagle County, Pitkin County, and the communities and organizations within the Roaring Fork Valley to leverage emissions reduction opportunities. ●Grants for innovative projects in affordable housing, and the commercial sectors. ●Target other major carbon sources – such as the airport, methane, etc. TRANSFORMING CORE’S FUNDING STREAM:All climate solutions require capacity - staffing and funding. As a 501(c)(3) third-party organization, CORE is in the best position to distribute REMP funds most effectively. However, we also recognize that as community goals are met and drive a decline in REMP funds, diversification of our funding is critical to future successes. CORE staff and board members have already begun to reevaluate funding channels, clarify financial needs, and target additional funding and development sources in addition to REMP. 2020 and early 2021 highlights of our financial transition include: ●New funding of $225,000-$250,000 ●Eagle County has joined as a new funding partner in 2021 ●Secured Colorado Energy Office financial support for trainings ●Secured most of the Imagine Climate funding from outside sources ●Offering consulting (fee-for-service) programs in the building industry to drive faster adoption of net-zero carbon-free buildings ●Hiring a grant specialist to provide dedicated efforts in diversifying our partnerships and funding sources 4 CORE is working to develop new funding sources including: ●Business sponsorships that support programs ●Individual donations ●Grants – federal, state, and foundations ●CORE Design & Consulting including Home Energy Rating Services (HERS) ratings, design services, and project analysis FINANCIAL IMPACTS: CORE is requesting $1.2 million from the City of Aspen REMP for 2022. REMP funds are collected by the City of Aspen and Pitkin County for projects when on-site mitigation with renewable energy is not an option when installing snowmelt, hot tubs and spas on both commercial and residential projects. ENVIRONMENTAL IMPACTS: The environmental impact will be a decrease in carbon emissions in the Roaring Fork Valley, exceeding CORE’s annual goal of 1,000 MtCo2e. RECOMMENDATIONS: Provide support and general feedback to CORE to develop their 2022 REMP request in the amount of $1.2 million. Attachments: Attachment A: 2021 Budget Attachment B: 2019-impact-report Grants and Incentives, $512,000 New Initiatives, 100,000Energy Smart Program, $425,000 Small Lodge Program, $50,000 Engagement & Marketing, $100,000 Program Administratio n, $100,000 Program Delivery, $885,000 2021 Budgeted Expenditures $2,172,000 5 Grants and Incentives, $450,000 New Initiatives, $100,000Energy Smart Program, $325,000 Engagement & Marketing $100,000 Program Administration, $100,000 Program Delivery, $850,000 2022 Budgeted Expenditures $1,925,000 6 aspencore.org | 970.925.9775 IMPACT REPORTPC : Daniel Bayer PRINTED ON PCW PRODUCT Cover: Cozy, carbon-free energy stands up to Old Man Winter, thanks to a tight building envelope, deep insulation, solar power, and a Net Zero Grant from CORE. 7 SMART ENERGY = LESS CARBON = MORE LIVING. In good health, Mona Newton EXECUTIVE DIRECTOR As long as there is carbon in the air, CORE will have work to do. Everyday our team is hard at work stemming climate change by offering programs with a singular goal: to reduce carbon emissions. Our focus is primarily on buildings — the largest contributor of greenhouse gases in our valley — while keeping your comfort and safety in mind. Together we’re making progress. In 2019, 500 of you took action in your spaces, getting on the Path to Zero by transforming existing buildings into energy superstars. You’ve signed up for energy assessments, installed solar- electric systems, and switched to electric cars, among many steps. Others are building new net-zero homes, bringing neighborhoods into a carbon-free future we can all enjoy. We’re also working with partners supporting game-changing tech on a larger scale, like a greener grid and large renewable energy projects. In the not too distant future, I hope to bicycle along the Rio Grande by the new 5 MW solar project, which CORE and others worked hard for approval. I’ll sleep easier knowing that we have more clean electrons powering our buses, cars, homes and businesses. In the year ahead we are committed to help reach the emissions reductions needed by 2030, and more than ever to diversify how we engage with you. My hope is to inspire everyone and to make it possible for anyone to participate in the collective action we need for our shared health and environment. As Helen Keller said: “Alone we can do so little; together we can do so much.” This page: Building their own 1,200-sf dream green home in Aspen’s Smuggler Park, Desi and Sam Barney prove that net zero can be affordable, with a little elbow grease and smart design. “Working with CORE helped us get on the path to carbon-free living!” PC: Daniel Bayer Impact at a glance LETTER FROM THE DIRECTOR Customers Served 6,438 To date Annual Carbon Savings 27,662 To date Annual Utility Bill Savings $3,879,233 To date Home Energy Assessments 275 2019 Energy Projects 163 2019 Business Site Visits 13 2019 Facility Retrofits 61 2019 YEAR IN REVIEW 8 SMART ENERGY = LESS CARBON = MORE LIVING. In good health, Mona Newton EXECUTIVE DIRECTOR As long as there is carbon in the air, CORE will have work to do. Everyday our team is hard at work stemming climate change by offering programs with a singular goal: to reduce carbon emissions. Our focus is primarily on buildings — the largest contributor of greenhouse gases in our valley — while keeping your comfort and safety in mind. Together we’re making progress. In 2019, 500 of you took action in your spaces, getting on the Path to Zero by transforming existing buildings into energy superstars. You’ve signed up for energy assessments, installed solar- electric systems, and switched to electric cars, among many steps. Others are building new net-zero homes, bringing neighborhoods into a carbon-free future we can all enjoy. We’re also working with partners supporting game-changing tech on a larger scale, like a greener grid and large renewable energy projects. In the not too distant future, I hope to bicycle along the Rio Grande by the new 5 MW solar project, which CORE and others worked hard for approval. I’ll sleep easier knowing that we have more clean electrons powering our buses, cars, homes and businesses. In the year ahead we are committed to help reach the emissions reductions needed by 2030, and more than ever to diversify how we engage with you. My hope is to inspire everyone and to make it possible for anyone to participate in the collective action we need for our shared health and environment. As Helen Keller said: “Alone we can do so little; together we can do so much.” This page: Building their own 1,200-sf dream green home in Aspen’s Smuggler Park, Desi and Sam Barney prove that net zero can be affordable, with a little elbow grease and smart design. “Working with CORE helped us get on the path to carbon-free living!” PC: Daniel Bayer Impact at a glance LETTER FROM THE DIRECTOR Customers Served 6,438 To date Annual Carbon Savings 27,662 To date Annual Utility Bill Savings $3,879,233 To date Home Energy Assessments 275 2019 Energy Projects 163 2019 Business Site Visits 13 2019 Facility Retrofits 61 2019 YEAR IN REVIEW 9 SMART ENERGY. Aspen Skiing Company’s in-house snow and energy experts in the heart of the snowmaking beast — the primary pump house — on Snowmass Mountain. “With climate change, expanded snowmaking is going to happen one way or another for us to remain viable [as a business],” said Ryland French, Aspen Skiing Company Energy Manager (second from right). “Then let’s stay as efficient as possible. It’s about smart growth. CORE helps us do that.” As snow enthusiasts, one of our favorite projects of the year was a profile of Aspen Skiing Company’s snowmaking team at Snowmass. More than any other crew in the Roaring Fork Valley, they are tasked with delivering the snow that fuels the community, and doing so on a deadline. So it might come as a surprise to learn that their #1 priority is to use less electricity — and still deliver more snow. With energy advising and a custom rebate from CORE, they’re making it happen. Read more at aspencore.org/snow Project Total Cost: $223,000 | CORE Grant: $10,000 PC: Michele Cardamone commercial spotlight: conscious snowmaking Using less energy and using it wisely means we can reduce fossil fuels and cut carbon emissions. SAVINGS EACH YEAR Carbon 170 MtC02e Utility Bills $12,124 Energy 827 MBtu Free Energy Advising Custom Rebate 37 cars off the road 20 homes powered ENERGY EQUIVALENTS EACH YEAR 10 SMART ENERGY. Aspen Skiing Company’s in-house snow and energy experts in the heart of the snowmaking beast — the primary pump house — on Snowmass Mountain. “With climate change, expanded snowmaking is going to happen one way or another for us to remain viable [as a business],” said Ryland French, Aspen Skiing Company Energy Manager (second from right). “Then let’s stay as efficient as possible. It’s about smart growth. CORE helps us do that.” As snow enthusiasts, one of our favorite projects of the year was a profile of Aspen Skiing Company’s snowmaking team at Snowmass. More than any other crew in the Roaring Fork Valley, they are tasked with delivering the snow that fuels the community, and doing so on a deadline. So it might come as a surprise to learn that their #1 priority is to use less electricity — and still deliver more snow. With energy advising and a custom rebate from CORE, they’re making it happen. Read more at aspencore.org/snow Project Total Cost: $223,000 | CORE Grant: $10,000 PC: Michele Cardamone commercial spotlight: conscious snowmaking Using less energy and using it wisely means we can reduce fossil fuels and cut carbon emissions. SAVINGS EACH YEAR Carbon 170 MtC02e Utility Bills $12,124 Energy 827 MBtu Free Energy Advising Custom Rebate 37 cars off the road 20 homes powered ENERGY EQUIVALENTS EACH YEAR 11 LESS CARBON. Eden Vardy is on a green mission, not just to reduce carbon, but to reverse it. “We want to revolutionize our food system and shift how we relate to food,” says the trailblazer. “It may be one of our most impactful ways to turn around climate change.” One of our biggest innovation stories of 2019 explored this provocative question: Can carbon be put back into the ground? Thanks in part to a grant from CORE, Eden Vardy, Executive Director for the Farm Collaborative, and his team set out to do just that with carbon farming. These regenerative agriculture pioneers are preparing the planet for the future, with innovations like alley cropping and green building that can be replicated on the land, at home and at work. Read more at aspencore.org/farm Let your building take care of you — and the environment. By powering efficiently and renewably, smart energy is an across-the-board win. Project Details Capital Campaign: $5,585,000 | CORE Grant: $30,000 PC: Michele Cardamone nonprofit spotlight: regenerative agriculture SAVINGS EACH YEAR Carbon 66 MtC02e Utility Bills $9,406 Energy 321 MBtu Free Energy Advising TRUE Grant 14 cars off the road 7 homes powered ENERGY EQUIVALENTS EACH YEAR 12 LESS CARBON. Eden Vardy is on a green mission, not just to reduce carbon, but to reverse it. “We want to revolutionize our food system and shift how we relate to food,” says the trailblazer. “It may be one of our most impactful ways to turn around climate change.” One of our biggest innovation stories of 2019 explored this provocative question: Can carbon be put back into the ground? Thanks in part to a grant from CORE, Eden Vardy, Executive Director for the Farm Collaborative, and his team set out to do just that with carbon farming. These regenerative agriculture pioneers are preparing the planet for the future, with innovations like alley cropping and green building that can be replicated on the land, at home and at work. Read more at aspencore.org/farm Let your building take care of you — and the environment. By powering efficiently and renewably, smart energy is an across-the-board win. Project Details Capital Campaign: $5,585,000 | CORE Grant: $30,000 PC: Michele Cardamone nonprofit spotlight: regenerative agriculture SAVINGS EACH YEAR Carbon 66 MtC02e Utility Bills $9,406 Energy 321 MBtu Free Energy Advising TRUE Grant 14 cars off the road 7 homes powered ENERGY EQUIVALENTS EACH YEAR 13 MORE LIVING. “I went through the process as a customer and it penciled out for me, thanks to incentives and a RENU loan,” said CORE’s Program Director, Marty Treadway (at right). “I’m the perfect example of someone who wanted to do more than their means could allow. Now I want to share that and help the CORE community plug into these strategies and savings.” 2019 was the year that laid the groundwork for our Path to Zero program, empowering the community to create spaces that generate more energy than they use. That meant demonstrating what retrofitting a building to net-zero energy really entails. Our own Marty Treadway led the way in the energy remodel of a 1968 house in Carbondale. After taking care of his family’s home, it’s now taking care of them, paying big-time financial and lifestyle dividends. Read more at aspencore.org/living Project Total Cost: $90,000 | Total Incentives: $10,500 PC: Daniel Bayer residential spotlight: net-zero retrofit Smart energy makes better buildings. And better buildings make for better living. Healthier. Cozier. Safer. More affordable to operate. More time for you. SAVINGS EACH YEAR Carbon 19 MtC02e Utility Bills $1,813 Energy 128 MBtu Net-zero Grant Solar Rebates 4 cars off the road 3 homes powered ENERGY EQUIVALENTS EACH YEAR 14 MORE LIVING. “I went through the process as a customer and it penciled out for me, thanks to incentives and a RENU loan,” said CORE’s Program Director, Marty Treadway (at right). “I’m the perfect example of someone who wanted to do more than their means could allow. Now I want to share that and help the CORE community plug into these strategies and savings.” 2019 was the year that laid the groundwork for our Path to Zero program, empowering the community to create spaces that generate more energy than they use. That meant demonstrating what retrofitting a building to net-zero energy really entails. Our own Marty Treadway led the way in the energy remodel of a 1968 house in Carbondale. After taking care of his family’s home, it’s now taking care of them, paying big-time financial and lifestyle dividends. Read more at aspencore.org/living Project Total Cost: $90,000 | Total Incentives: $10,500 PC: Daniel Bayer residential spotlight: net-zero retrofit Smart energy makes better buildings. And better buildings make for better living. Healthier. Cozier. Safer. More affordable to operate. More time for you. SAVINGS EACH YEAR Carbon 19 MtC02e Utility Bills $1,813 Energy 128 MBtu Net-zero Grant Solar Rebates 4 cars off the road 3 homes powered ENERGY EQUIVALENTS EACH YEAR 15 COMMUNITY 2019 REMP: $1,910,000 Restricted Revenues (TRUE Grants): $750,000 Grants & Sponsorships: $26,811 Membership: $100,000 Contracted Services: $74,017 Other: $7,777 TOTAL: $2,868,605 Revenue 2019 COMMUNITY PARTNERS Anderson Ranch Arts Center The Arts Center at Willits Aspen Center for Environmental Studies Aspen Center for Physics Aspen Daily News Aspen Global Change Institute Aspen Public Radio Aspen Skiing Company Environment Foundation The Aspen Times Basalt Bike & Ski Capitol Creek Brewery Colorado Audio Visual & Design KDNK Community Radio Marble Distilling Co Snowmass Arts Advisory Board Writ Large FUNDING PARTNERS MEMBERS BOARD OF DIRECTORS Tom Goode: Town of Snowmass Village Ward Hauenstein: City of Aspen Cindy Houben: Pitkin County David Munk: Holy Cross Energy George Newman: Pitkin County, Chair Mona Newton: CORE, Secretary Ashley Perl: City of Aspen Katie Schwoerer: ACES, Treasurer Bill Stirling: Citizen Representative Administration: $181,925 Program Expenses: $791,753 Community, Green Design & Income Qualified: $104,881 Technical Services: $132,436 Rebates: $447,360 Restricted Expenditures (TRUE Grants): $ 363,029 TOTAL: $2,021,383 Expenses <1% 1% 67% 26% 4% 3% 9% 39% 5%7% 22% 18% Financials Community members step up for climate action at the 2019 Roaring Stories, an annual live story series at Rock Bottom Ranch, in partnership with ACES, Writ Large and KDNK. PC: Daniel Bayer 2019 GRANT RECIPIENTS 1201 CO Ave Holdings, LLC Aspen Center for Environmental Studies The Arts Campus at Willits Aspen Pitkin Employee Housing, Inc Aspen Skiing Company Barney residence Biospaces, Inc Burlingame Housing Inc Carbondale Arts Central Rocky Mountain Permaculture Institute Cherney residence Colorado Rocky Mountain School Custom Works Danneker residence The Farm Collaborative Garfield County Senior Housing Corp Habitat For Humanity – RFV Holy Cross Energy McCabe Properties LLC mountainFLOW eco-wax Pitkin County The Product Launch Company Resource Engineering Group Solar Rollers Suplizio residence Sustainable Settings Third Street Center Town of Snowmass Village Treadway residence Winfield Arms HOA As a non-profit 501(c) 3, CORE recognizes the 2020 City of Aspen and Pitkin County grants when awarded in 2019. $1.4 million of these grant funds are committed for 2020 to support community and individual energy efficiency projects in the Roaring Fork Valley. 16 COMMUNITY 2019 REMP: $1,910,000 Restricted Revenues (TRUE Grants): $750,000 Grants & Sponsorships: $26,811 Membership: $100,000 Contracted Services: $74,017 Other: $7,777 TOTAL: $2,868,605 Revenue 2019 COMMUNITY PARTNERS Anderson Ranch Arts Center The Arts Center at Willits Aspen Center for Environmental Studies Aspen Center for Physics Aspen Daily News Aspen Global Change Institute Aspen Public Radio Aspen Skiing Company Environment Foundation The Aspen Times Basalt Bike & Ski Capitol Creek Brewery Colorado Audio Visual & Design KDNK Community Radio Marble Distilling Co Snowmass Arts Advisory Board Writ Large FUNDING PARTNERS MEMBERS BOARD OF DIRECTORS Tom Goode: Town of Snowmass Village Ward Hauenstein: City of Aspen Cindy Houben: Pitkin County David Munk: Holy Cross Energy George Newman: Pitkin County, Chair Mona Newton: CORE, Secretary Ashley Perl: City of Aspen Katie Schwoerer: ACES, Treasurer Bill Stirling: Citizen Representative Administration: $181,925 Program Expenses: $791,753 Community, Green Design & Income Qualified: $104,881 Technical Services: $132,436 Rebates: $447,360 Restricted Expenditures (TRUE Grants): $ 363,029 TOTAL: $2,021,383 Expenses <1% 1% 67% 26% 4% 3% 9% 39% 5%7% 22% 18% Financials Community members step up for climate action at the 2019 Roaring Stories, an annual live story series at Rock Bottom Ranch, in partnership with ACES, Writ Large and KDNK. PC: Daniel Bayer 2019 GRANT RECIPIENTS 1201 CO Ave Holdings, LLC Aspen Center for Environmental Studies The Arts Campus at Willits Aspen Pitkin Employee Housing, Inc Aspen Skiing Company Barney residence Biospaces, Inc Burlingame Housing Inc Carbondale Arts Central Rocky Mountain Permaculture Institute Cherney residence Colorado Rocky Mountain School Custom Works Danneker residence The Farm Collaborative Garfield County Senior Housing Corp Habitat For Humanity – RFV Holy Cross Energy McCabe Properties LLC mountainFLOW eco-wax Pitkin County The Product Launch Company Resource Engineering Group Solar Rollers Suplizio residence Sustainable Settings Third Street Center Town of Snowmass Village Treadway residence Winfield Arms HOA As a non-profit 501(c) 3, CORE recognizes the 2020 City of Aspen and Pitkin County grants when awarded in 2019. $1.4 million of these grant funds are committed for 2020 to support community and individual energy efficiency projects in the Roaring Fork Valley. 17 aspencore.org | 970.925.9775 IMPACT REPORTPC : Daniel Bayer PRINTED ON PCW PRODUCT Cover: Cozy, carbon-free energy stands up to Old Man Winter, thanks to a tight building envelope, deep insulation, solar power, and a Net Zero Grant from CORE. 18 MEMORANDUM TO: Mayor Torre and Aspen City Council FROM: Ben Anderson, Principal Long-Range Planner Phillip Supino, Community Development Director MEMO DATE: April 23, 2021 MEETING DATE: April 26, 2021 RE: Work Session Discussion – GMQS Development Allotment System (continued from February 22, 2021) REQUEST OF COUNCIL: This Work Session continues a discussion that was begun with Council on February 22, 2021. The full staff memo from the previous work session is attached as Exhibit A. The conversation in February was cut short by the necessity of other agenda items and Council provided direction that there was interest to find time at a later date to pick up the conversation where it was left off. At the conclusion of this evening’s work session, staff requests Council direction on the following questions: 1) Do you share staff’s assessment of the current conditions within Aspen’s development context and the relationship to our existing growth management system? 2) Are there other issues that staff should consider, that have not been identified in either the 2/22 or 4/26 Work Sessions? 3) Is there additional information that Council feels is needed in making a more complete assessment and providing direction to possible responses? 4) What actions would Council deem appropriate for staff to pursue – in light of the importance of this issue and in relationship to other priorities? SUMMARY AND BACKGROUND: The Work Session on 2/22/21 was a follow-up on previous Council direction to facilitate a discussion on the current system of development allotments within the Growth Management Quota System (GMQS). Council’s desire to hold this discussion emerged from earlier Council direction around affordable housing goals and the consideration of the annual action item for Council to consider rolling-over unused GMQS allotments. 19 Page 2 of 5 This memo and staff’s introductory presentation at the work session provided a high-level discussion of the following: 1. A brief history of the GMQS system and of the use of development allotments within this system 2. Trends in the recent utilization of development allotments and impacts within the GMQS system 3. Other trends in the development landscape that manifest as “growth” but are not captured in the GMQS system 4. Identification of range of possible responses to the current condition One of the findings in staff’s research that was identified in February – were common themes that have been present since the beginning of Aspen’s response to growth management issues since the 1970s: 1. Similar questions across time: • What do we mean when we use the term “growth”? • What impacts of growth are we trying to reduce or mitigate? • What are the best tools to most effectively mitigate these impacts? 2. Intensive studies to get at the right number of GMQS quotas or allotments. 3. Fixed allotments for Free Market Residential, Commercial, and Lodging development. 4. The constant presence of affordable housing goals and policy in GMQS study and evaluation. 5. Increasing relationships between growth management policies and affordable housing mitigation requirements. As staff and Council observe the pressures and outcomes within the current development context and compare with the trend of underutilized allotments within GMQS, it seems clear that a disconnect has emerged – the capacity for the GMQS system to manage growth as intended is limited by the types of development activity not accounted for in the system and which drive current development pressures. STAFF DISCUSSION: Staff previously identified the following questions and responses in describing the sources of an emerging disconnect: If GMQS Allotments are not being utilized and population is growing at a rate lower than anticipated by the GMQS, what is the community seeing and feeling today related to growth? 20 Page 3 of 5 1) Development Activity that does not utilize allotments. Development types that do not utilize GMQS allotments: • scrape and replace redevelopment of single-family and duplex residential units. • addition of floor area and significant remodels to existing residential units. • addition of subgrade floor area to residential units. • redevelopment of existing lodge units. • redevelopment of existing commercial net leasable area. • renovations that do not alter number of units or floor area. 2) Emergence of the short-term rental market – beyond the traditional lodge room base. Short-term vacation rentals have shifted lodging impacts into residential neighborhoods – both in terms of redevelopment pressure and demands of visitor services and accommodation. Figure 1. Open Building permits and project valuation. Each blue dot identifies a project with a valuation of greater than $200K. In total, the projects depicted combine for a valuation of $455M. On average each dot represents $3.3M of labor and materials. Map depicts permits as of 2/15/21. 21 Page 4 of 5 3) Duration between allotments being granted and initiation of construction. Several factors merge in creating a extended time period – often years between the initial approval of development allotments and the impacts felt by the community during construction. Is the disconnect between the GMQS allotments and the real and perceived impacts of development activity a problem? 1) We no longer have the right growth management tools. • The current allotment system is not capturing the vast majority of permit activity or valuation. 2) The impact to affordable housing mitigation. • If GMQS does not capture and assess appropriate mitigation requirements on development activity driving actual employee generation, over time the program mail fail to deliver needed affordable housing units or the revenue to construct and maintain them. What are the potential responses to this disconnect in the GMQS? A range of choices: 1) Continue with the status quo. 2) Targeted policy and code responses to manage development types that are not currently captured in GMQS. 3) Modifying the current allotments to reflect current development realities and community interest related to growth. 4) Rethink the direct tie between growth and affordable housing mitigation / development. 5) A whole cloth rethinking of growth management. QUESTIONS FOR COUNCIL: 1) Do you share staff’s assessment of the current conditions within Aspen’s development context and the relationship to our existing growth management system? 2) Are there other issues that staff should consider, that have not been identified in either the 2/22 or 4/26 Work Sessions? 3) Is there additional information that Council feels is needed in making a more complete assessment and in providing direction to possible responses? 4) What actions would Council deem appropriate for staff to pursue – in light of the importance of this issue and in relationship to other priorities? 22 Page 5 of 5 FINANCIAL IMPACTS: At this time, N/A. ENVIRONMENTAL IMPACTS: N/A ALTERNATIVES: N/A RECOMMENDATIONS: N/A CITY MANAGER COMMENTS: EXHIBITS: A. Full staff memo from 2/22/21 Work Session B. Slide deck from 2/22/21 Work Session 23 MEMORANDUM TO: Mayor Torre and Aspen City Council FROM: Ben Anderson, Principal Long-Range Planner Phillip Supino, Community Development Director MEMO DATE: February 18, 2021 MEETING DATE: February 22, 2021 RE: Work Session Discussion – GMQS Development Allotment System REQUEST OF COUNCIL: This work session’s purpose is to follow-up on previous Council direction to facilitate a discussion on the current system of development allotments within the Growth Management Quota System (GMQS). Council’s desire to hold this discussion emerged from earlier Council direction around affordable housing goals and the consideration of the annual action item for Council to consider rolling-over unused GMQS allotments. This memo and staff’s introductory presentation at the work session will provide a high- level discussion of the following: 1. A brief history of the GMQS system and of the use of development allotments within this system 2. Trends in the recent utilization of development allotments and impacts within the GMQS system 3. Other trends in the development landscape that manifest as “growth” but are not captured in the GMQS system 4. Identification of range of possible responses to the current condition At the conclusion of the discussion, staff will request direction from Council as to the desire to pursue further study and evaluation of the development environment and possible responses within the GMQS. Depending on this response, follow-up questions related to prioritization in ComDev’s workplan and support for budget authorization may be necessary. SUMMARY AND BACKGROUND: History Affordable housing in Aspen dates to the 1977 adoption of the Growth Management Quota System (GMQS). Since then, inclusionary zoning, affordable housing mitigation requirements, and the assessment of impact fees on development for the provisions of affordable housing have become keystones of Aspen’s approach to maintaining community character, social equity, and a functional in-town economy – and regulating “growth”. 24 Page 2 of 11 Affordable Housing/Land Use Code Coordination The initial response to growth in the Aspen area was based on a description of things that residents were seeing and feeling in the late 60s and early 70s. Traffic was increasing, new homes were being built, new businesses were coming to town, skier visits were increasing, population was growing. Conversations about infrastructure’s capacity to serve these developments were being held as were calculations made about how to pay for necessary expansions of infrastructure to meet increasing demands. Following innovative approaches from communities like Petaluma, CA and Ramapo, NY, Aspen and Pitkin County established a series of policies to define and limit growth. Many types of policies emerged from this effort, but most central to our current discussion, the 1977 Plan recommended annual quotas for the City of Aspen based on the phasing of development types: • Permanent residential development 39 units • Tourist residential development 18 units • Commercial building potential 24,385 square feet These numbers were arrived at by examining building potential based on zoning at the time and allocating 80% of this potential over a period of 15 years. It is also important to note that at the time “growth”, like today, was viewed as a complex idea – of which not a single element “can be singled out to explain the total growth phenomenon” (pg. 3 of 1977 Plan). It was understood that the recommended growth allotments would help to realize this ideal 3.47% “growth rate” identified by the plan. Significant efforts to study growth and craft fine-tuned responses continued through the 80s and 90s. In 1994, a major re-write of the GMQS chapter of the land Use Code was undertaken and codified in response to the 1993 AACP. An important change reduced the desired growth rate from 3.47% to 2%. Interestingly, this is also the AACP that Figures 1&2. Cover and image from the 1977 Aspen / Pitkin County Growth Management Policy Plan. This document set the basis for Aspen’s current GMQS system. Responding to the growth rates at the time for population and housing starts exceeding 10%, this document established a goal for limiting growth across factors at 3.47% annually. This number served as the foundation for the initial establishment of growth management allotments. 25 Page 3 of 11 Affordable Housing/Land Use Code Coordination established the affordable housing goal of housing 60% of Aspen’s workforce. A new, more complex allotment system was established in response: • Tourist Accommodations 11 units • Free Market Residential 4 units • Free Market Residential AH associated 8 units • Resident Occupied 8 units • Affordable Housing 43 units • Commercial (allocated by zone district) 20,000 square feet This new system gave further definition to a system for development to compete and qualify for these allotments. Categories of “exempt” and “non-exempt” developments were established. There was a Growth Management Commission that reviewed development proposals against these criteria in being granted allotments. It was a much more involved system than currently exists today. In 2007, Ordinance No.14 codified the next significant change to GMQS. Continuing to use the 2% growth rate, a new study and analysis established the number of annual allotments that remain in place today: • Residential – Free Market 18 units • Commercial 33,300 square feet • Lodging 112 pillows • Residential Affordable Housing No limit • Essential Public Facility No limit Requests/applications for allotments were reviewed twice annually. A scoring/ranking system was still utilized, but it was simplified from previous systems and not required for all projects. Unused allotments could be carried forward with Council approval Today, the same allotment number for each development type remains. However, the ranking/scoring/competition process has been removed by subsequent code amendments and projects receive allotments on a first come, first serve basis – and are confirmed at the issuance of a development order following land use approval. While significant aspects of the GMQS system have changed over the years, a few constants emerge: 1) Similar questions across time: • What do we mean when we use the term “growth”? • What impacts of growth are we trying to reduce or mitigate? • What are the best tools to most effectively mitigate these impacts? 2) Intensive studies to get at the right number of GMQS quotas or allotments. 26 Page 4 of 11 Affordable Housing/Land Use Code Coordination 3) Fixed allotments for Free Market Residential, Commercial, and Lodging development. 4) The constant presence of affordable housing goals and policy in GMQS study and evaluation. 5) Increasing relationships between growth management policies and affordable housing mitigation requirements. Current Conditions While the GMQS system has changed in multiple ways since 2007, the number of allotments has remained fixed. As required by code, staff provides a yearly audit of the available allotments utilized and requests Council direction on whether to roll-over unutilized allotments into the next year. Year FM Residential Units Commercial square feet Lodging Pillows Affordable Housing Units Essential Public Facility square feet GMQS Allotments allowed per year *established in 2007 18 33,300 112 No limit No limit Utilized GMQS Allotments 2015 11 28,701 32 11 20,070 2016 8 28,045 112 42 47,640 2017 0 231 90 60 9,194 2018 1 4,471 20 9 13,000 2019 1 1,760 0 0 5,372 2020 2 3,056 0 7 8,319 Total GMQS Allotments and Percentage Utilized 2015-2020 23 of 108 21.2% 66,264 of 199,800 33.2% 254 of 672 37.8% 129 N/A 103,595 N/A Total GMQS Allotments and Percentage Utilized 2018-2020 4 of 54 7.4% 9,297 of 99,900 9.3% 20 of 336 5.9% 16 N/A 26,691 N/A Table 1. GMQS allotment utilization, 2015 – 2020 27 Page 5 of 11 Affordable Housing/Land Use Code Coordination As Table 1 identifies, over the last six years, annual utilization of allotments has been minimal, using roughly a third of the available allotments. In the last three years utilization has diminished further, with less than 10% of allotments being utilized. It is important to note that while allotments for Affordable Housing units and Essential Public Facility square footage is tracked year to year, there are not current limits for these development types. Table 2 below, describes recent changes in Aspen’s population. Population has been growing by roughly 2% over the last 5 years or so – consistent with the 2% “growth” rate identified as a goal in the 1993 re-write of GMQS. It is unclear the role that GMQS system plays in controlling population growth with other barriers to entry in Aspen, including median home price, availability of workforce housing, geographical and political constraints on development and other factors. In the context of Council discussions on affordable housing goals, real and perceived development pressures, and yearly reports that show minimal utilization of the allotments at the foundation of Aspen’s growth management system, Council is right to ask for an understanding of the situation. Furthermore, given the age of the system relative to the rapidly changing dynamics in real estate markets, federal economic policy, and consumer preferences for Aspen, staff believes it is important to periodically assess the effectiveness of central regulatory controls and policies, like GMQS. STAFF DISCUSSION: If GMQS Allotments are not being utilized and population is growing at a moderate rate, what is the community seeing and feeling today related to growth? 1) Development Activity that does not utilize allotments Figure 3 (on the next page) is a map that identifies the 138 issued, currently open building permits for projects with a valuation of greater than $200,000 (Note: $200K was identified Year Aspen’s Population (U.S. Census Bureau) % Growth from Previous Year 2015 6,740 0.5% 2016 6,788 0.7% 2017 7,097 4.6% 2018 7,234 2% 2019 7,431 2.7% Total change 2015-2019 +691 +10.3% Average Annual Growth Rate 2015-2019 +2.1% Source: American Community Survey (ACS) 5-year Table 2. Population growth, 2015 – 2019. While variation across years exists, over the last five years, population has increased by an average annual rate of roughly 2%. 28 Page 6 of 11 Affordable Housing/Land Use Code Coordination to filter out projects with a more limited impact). This map and data does not include recently completed projects, or projects that are in the land use or building permit review process. Combined, the open permits depicted in the map represent nearly a half of a billion dollars in project valuation. If averaged. each blue dot represents $3.3 million dollars of labor and materials value. While a few of these projects (commercial projects primarily) did receive allotments in years past at the time of land use approval, most of the development depicted in this map is entirely exempt from the allotment process – and did not utilize any GMQS allotments for residential, commercial or lodge development. Development types that do not utilize GMQS allotments: • scrape and replace redevelopment of residential units; • addition of floor area to existing residential units; • addition of subgrade floor area to residential units; • redevelopment of existing Lodge units; • redevelopment of existing commercial net leasable area; and • renovations that do not alter number of units or floor area Figure 3. Open Building permits and project valuation. Each blue dot identifies a project with a valuation of greater than $200K. In total, the projects depicted combine for a valuation of $455M. On average each dot represents $3.3M of labor and materials. 29 Page 7 of 11 Affordable Housing/Land Use Code Coordination In staff’s view, this situation is the primary contributor to what the community is witnessing and perceiving related to development pressures. Evaluated one way, each of these dots represents a booming design and construction economy, well-paying jobs, and fees and taxes that support essential community functions. In another view, each dot represents noise, construction fencing, cranes, increased traffic, parking issues in neighborhoods, disruption of adjacent right-of-way, and impacts to the landfill. There is also the matter of “community character” – a subjective term which carries a lot of weight for community members. To some, a rapidly changing built environment defines Aspen and makes way for new architecture, design and neighborhood character. To others, perceived changes translate into feelings of loss of context, loss of a sense of place, and departure from the city’s history. With the recent unprecedented activity in Aspen’s real estate market, staff anticipates a continuation, if not an acceleration of this condition. 2) Emergence of the short-term rental market – beyond the traditional lodge room base Recent changes to business license and vacation rental permit requirements for short- term rentals will soon provide much better data on the scale of this phenomena, but at a high level, it is clear that the emergence of AirBnB, VRBO, and other mechanisms to connect visitors to residential “lodging” accommodation have ushered in new dynamics to the lodging, real estate, and development markets. There are many implications to this new trend, but most important to GMQS – is that growth and limitation on lodging and tourist accommodations have been defined by the allotment system since the very beginning of efforts to manage growth. This is and has been in recognition of the fact that tourist visitation drives many of the “growth” related impacts previous Councils and community members sought to control: traffic, demand for goods and services, strains on city infrastructure Currently, GMQS has no mechanism to evaluate or limit the number of short-term rentals in otherwise residential uses. It is clear, however, that visitors staying in private, short- term rentals still create many of the same impacts as with traditional lodging. Additionally, private homes used intermittently as lodging require maintenance and services separate from those required for traditional lodging properties. With better data, the issue will be better understood, but at present, the Land Use Code has minimal tools to mitigate the impacts of the growth pressures caused by this industry. 3) Duration between allotments being granted and initiation of construction activity Even when allotments are required, there is a time disconnect between the approval of development allotments and when the impacts of those allotments are felt by the community. For example, the Lift One Lodge and Gorsuch Haus projects, when built, will represent one of the largest development projects in Aspen’s history. Lift One Lodge’s approval of development allotments span across several land use approvals going back to 2007. Gorsuch Haus was granted development allotments over two years in 2015 and 2016. If the projects have building permits issued in 2022/2023, the duration between the first allotment issuance related to the project and first signs of construction will be 15 30 Page 8 of 11 Affordable Housing/Land Use Code Coordination years or more. While the Lift One Corridor project is perhaps an extreme case, even a typical duration between GMQS review and the felt impacts of development to the community contributes to the perception of a problem in the system. There are commercial projects currently under construction that received GMQS allotments as far back as 2012. Is the disconnect between the GMQS allotments and the real and perceived impacts of development activity a problem? While reasonable people can honestly debate the costs, benefits, and trade-offs within Aspen’s current development context, staff has identified two tangible concerns. 1) We no longer have the right tools The purpose of Aspen’s entire system of growth management, since its first inception, was to make sure that “growth” could be accommodated by existing and planned infrastructure, that new development was appropriately funding these infrastructure needs, and that “growth” was proceeding at a rate that was sustainable in preserving identified elements of community character. Identification and analysis of the factors that contributed to “growth” were carried out through complex studies. Those factors were then strategically limited to align infrastructure capacity and financing – and to provide direction to some degree of growth and change that was acceptable to the community. The types of development pressure in Aspen have clearly changed over time – and this change seems to be accelerating in recent years. As a consequence, it is staff’s view that the once direct nexus between the factors that cause “growth” and the tools that the LUC offers to mitigate “growth” is now less defined. The primary outcome is that the community does not have the right tools to mitigate the pressures or any negative impacts of development types that have come to define Aspen’s recent real estate and development context. 2) The impact to affordable housing mitigation As previously stated, affordable housing mitigation requirements have increasingly become a central component of the GMQS. Through careful study, employee generation rates and mitigation requirements have been crafted in direct relationship to the development types limited by the allotment system. Today, because of the trends identified above, staff utilizes the GMQS chapter of the LUC to more frequently identify affordable housing mitigation requirements for a project than to use the allotment system or other components of GMQS. Within this intricate relationship, over the years, various credits and incentives have been included to encourage or discourage different types of development (example – the lodge unit size incentive in reducing mitigation requirements). Three important outcomes have resulted. First, development uses these credits and incentives. Commercial, residential, and lodge development and redevelopment are evaluated in their pro forma through the lens of these incentives and disincentives and then designed accordingly to minimize mitigation requirements. This is not a surprise, but 31 Page 9 of 11 Affordable Housing/Land Use Code Coordination what it means is that the community experiences these projects as “growth” – but does not realize the anticipated proportion of related affordable housing. This was very much a part of the community conversation around the Lift One Corridor project. Per Council direction, staff is currently working on potential code amendments to refine existing incentives and credits within AH mitigation requirements Second, and more importantly, is the impact of development types that have been discussed above that do not require GMQS allotments. It is also true that these development types are largely exempt from affordable housing mitigation requirements. As these types of projects have become a prominent part of the development landscape, the implications to the affordable housing mitigation system is becoming clearer: There is significant development activity that is not appropriately mitigating for its observed employee generation impacts. Lastly (and really an extension of the previous point), the GMQS / affordable housing mitigation relationship is built on an assumed premise – that if growth occurs within the allotment system, it will have mitigation requirements that will provide a proportional amount of affordable housing. For all of the reasons described above, this presumed relationship no longer functions as designed. There is clearly extensive development activity ($286M in building permit valuation in 2020 alone). However, the number of new FTEs created requiring mitigation does not seem to be driving the development of new affordable housing at scale with this development activity. This has implications to the 150 Fund and to the health and sustainability of the Affordable Housing Credits program. If allotment related AH mitigation is no longer as prevalent, what mechanisms or funding sources will take the place in meeting affordable housing goals? What are the potential responses to this disconnect in the GMQS? The creation of the GMQS placed Aspen and Pitkin County on the forefront of planning innovation in defining and managing the impacts of growth. While the basic goals and pursuits remain valid today more than ever, it is staff’s view that the changing development context in Aspen has shifted some of the fundamentals of the “growth” that the community feels – away from the tools designed in GMQS to mitigate these impacts. Is it time to change these tools – or add new tools to the toolbelt? A range of choices 1) Continue with the status quo. While staff acknowledges that there are gaps in the system that could and probably should be corrected, is this time during a global pandemic that has translated into unprecedented local real estate activity – an appropriate time to begin making significant changes to a system that has been in place since 1977? Ultimately, this response asks a question: Is this issue a sufficient enough priority for Council to initiate what could be a significant policy and regulatory analysis given Council’s other high priority goals? 32 Page 10 of 11 Affordable Housing/Land Use Code Coordination 2) Targeted policy and code responses to prevalent development types that are not currently captured in GMQS. Per Council direction, staff is already working on potential code amendments that would re-evaluate some of the existing credits and incentives that preclude development types from being captured in the allotment system and reduce affordable housing mitigation requirements. But other areas for targeted responses could be appropriate. Examples of this may include the following: rethinking how the code handles “demolition”; creating new categories in the allotment system that would capture re-development scenarios; or including short-term rentals as a development type within the GMQS. (Staff believes that any approach related to the latter should be included in a more comprehensive regulatory response to short-term rental uses.) 3) Reducing the current allotments to reflect current development realities. In staff’s view, while this would create consistency between the code and current development reality, this tactic would not address many of the issues identified the current development context. It may be appropriate to utilize this tool in combination with other responses. One issue with this choice is that development allotments have been crafted in response to previous technical studies. Any change to allotments, even in reduction, should also be in response to a new study of current and future conditions. 4) Rethink the direct tie between growth and affordable housing mitigation / development. As discussed above, affordable housing has been placed in a direct supply and demand relationship with free-market commercial and residential development. In essence – growth happens, mitigation is provided, and affordable housing is developed to meet the needs of an expanding workforce. If “growth” is not happening in the way that GMQS currently defines growth, this causes a significant problem in meeting current and future affordable housing needs. Staff is not providing a recommendation on specific policy or code changes on this topic at this time. However, staff does believe that this dilemma is significant and will ultimately need to be studied and addressed – in potentially transformative ways. 5) A whole cloth rethinking of growth management. It is staff’s view that there are important fundamentals in the GMQS that no longer apply today as they did in 1977. Some of this is a consequence of this system working exactly as it was designed. Without question though, “growth” as the community experiences today, is not the same “growth” that was felt in 1977. The impacts may feel the same, but the underlying factors are very different. Is this a reason to redesign the foundation of Aspen’s Land Use Code? Perhaps, but while there are compelling reasons to do so, it should be noted that this would be a major undertaking for the community. It might also be appropriate that any such change would instead follow a community conversation on “growth” that could define the next update of the AACP. 33 Page 11 of 11 Affordable Housing/Land Use Code Coordination QUESTIONS FOR COUNCIL: 1)To what degree is a response to this issue a priority for Council? 2) If it is identified as a priority, where is the appropriate response within the range of choices discussed above? 3)If priorities for a response are identified, how should staff prioritize this work relative to other Council goals, ComDev work program items, and the demands of responding to community needs resulting from the pandemic? Note that, should Council seek to prioritize work on this topic, additional resources to support ComDev staff may be required. FINANCIAL IMPACTS: At this time, N/A. ENVIRONMENTAL IMPACTS: N/A ALTERNATIVES: N/A RECOMMENDATIONS: N/A CITY MANAGER COMMENTS: EXHIBITS: A. Full-size map identifying open building permits 34 EXHIBIT A - Location and Valuation of Open Building Permits 35 GMQS –Development Allotments City Council Work Session February 22, 2021 36 37 Purpose of the Work Session Discuss current status of GMQS allotment system in relationship to Council affordable housing goals and concerns about development impacts. Source: Aspen 3D Base Map City of Aspen GIS 38 Agenda 1) A brief history of the Growth Management Quota System (GMQS) 2) Trends in recent utilization of development allotments 3) Development types that are not captured in allotment system 4) Issues when allotment system does not capture “growth” 5) A range of potential responses 6) Council direction on whether a policy / code response is desired 39 Agenda 1) A brief history of the Growth Management Quota System (GMQS) 2) Trends in recent utilization of development allotments 3) Development types that are not captured in allotment system 4) Issues when allotment system does not capture “growth” 5) A range of potential responses 6) Council direction on whether a policy / code response is desired 40 Agenda 1) A brief history of the Growth Management Quota System (GMQS) 2) Trends in recent utilization of development allotments 3) Development types that are not captured in allotment system 4) Issues when allotment system does not capture “growth” 5) A range of potential responses 6) Council direction on whether a policy / code response is desired 41 Agenda 1) A brief history of the Growth Management Quota System (GMQS) 2) Trends in recent utilization of development allotments 3) Development types that are not captured in allotment system 4) Issues when allotment system does not capture “growth” 5) A range of potential responses 6) Council direction on whether a policy / code response is desired 42 Agenda 1) A brief history of the Growth Management Quota System (GMQS) 2) Trends in recent utilization of development allotments 3) Development types that are not captured in allotment system 4) Issues when allotment system does not capture “growth” 5) A range of potential responses 6) Council direction on whether a policy / code response is desired 43 Agenda 1) A brief history of the Growth Management Quota System (GMQS) 2) Trends in recent utilization of development allotments 3) Development types that are not captured in allotment system 4) Issues when allotment system does not capture “growth” 5) A range of potential responses 6) Council direction on whether a policy / code response is desired 44 Brief History of GMQS 1976-1977 The Aspen / Pitkin County Growth Management Plan and first codified growth management tools –a 3.47% “growth rate” that applied quotas or allotments to the following development types: •Permanent residential development •Tourist residential development •Commercial building potential Figure from 1977 Growth Management Policy Plan, Page 6 45 Brief History of GMQS 1980’s •Extensive and detailed studies about how to better understand and manage growth. •Competition system –scoring and ranking •Further differentiation of development types •Increasing requirements for employee housing mitigation 46 Brief History of GMQS 1994 •Major rewrite of GMQS chapter in LUC in response to the 1993 Aspen Area Community Plan (AACP) •Growth Rate reduced to 2% and applied to allotment system •Competition System continues –“Exempt” and “Non- Exempt” development becomes a focus 47 Brief History of GMQS 2007 •Response to a new study –establishes new allotments •Continues to use the 2% growth rate •Scoring and ranking system continues 48 Brief History of GMQS Today •Allotment numbers from 2007 remain in place •Competition system has been replaced with a first come, first serve model 49 Brief History of GMQS Constants Across Time 1)Similar Questions: What do we mean by “growth”? What impacts of growth are we trying to mitigate? What are the best tools? 50 Brief History of GMQS Constants Across Time 2) Intensive studies and analysis to get at the right number of GMQS allotments 3) Fixed allotments for: •Free -Market Residential •Commercial •Lodging Development 51 Brief History of GMQS Constants Across Time 4) Constant presence of affordable housing goals and policy within GMQS. 5) Increasing relationship between growth management polices and AH mitigation requirements 52 Current status of GMQS allotments Annual allotments: FM Residential 18 units Commercial 33,300 square feet Lodging 112 pillows *Affordable Housing and Essential Public Facilities are tracked, but do not have limits on annual allotments Utilization:2015-2020 2018-2020 FM Residential 21%7% Commercial 33%9% Lodging 38%6% 53 Current status of GMQS allotments Annual allotments: FM Residential 18 units Commercial 33,300 square feet Lodging 112 pillows *Affordable Housing and Essential Public Facilities are tracked, but do not have limits on annual allotments Utilization:2015-2020 2018-2020 FM Residential 21%7% Commercial 33%9% Lodging 38%6% 54 Is Aspen’s population growing? Year Aspen’s Population (U.S. Census Bureau) % Growth from Previous Year 2015 6,740 0.5% 2016 6,788 0.7% 2017 7,097 4.6% 2018 7,234 2% 2019 7,431 2.7% Total change 2015-2019 +691 +10.3% Average Annual Growth Rate 2015-2019 +2.1% Source: American Community Survey (ACS) 5-year 55 So, what is the community feeling? Source: City of Aspen GIS56 A disconnect between GMQS and development? Development types that do not utilize allotments: •scrape and replace redevelopment of residential units •addition of floor area to existing residential units •addition of subgrade floor area to residential units •redevelopment of existing lodge units •redevelopment of existing commercial net leasable area •renovations that do not alter number of units or floor area 57 A disconnect between GMQS and development? Other trends that the community may experience as “growth” •The Short-Term Rental Market •Duration of time between a project receiving allotments and beginning construction 58 A disconnect between GMQS and development? Other trends that the community may experience as “growth” •The Short-Term Rental Market •Duration of time between a project receiving allotments and beginning construction 59 Is this a disconnect that needs resolution? 1)Do we have the right tools to respond? While the pressures of growth likely feel the same, the types of development have changed over time. If allotments are not being utilized –and the community is feeling “growth” – what tools do we use to respond? 60 Is this a disconnect that needs resolution? 2) The impact to affordable housing mitigation GROWTH as measured by ALLOTMENTS = EMPLOYEE GENERATION = EMPLOYEE / AFFORDABLE HOUSING 61 Is this a disconnect that needs resolution? 2) The impact to affordable housing mitigation •New development is shaped by mitigation requirements (and credits and incentives). •Significant development (and redevelopment) activities do not use allotments –or require AH mitigation proportionate to observed employee generation. 62 Is this a disconnect that needs resolution? 2) The impact to affordable housing mitigation •“Supply and Demand” issues within the AH Certificates Program •Reduced likelihood of provision of on-site or off-site AH units by development / redevelopment •Reduced revenue from mitigation requirements to 150 Fund 63 Potential Responses •Continue with the status quo •Reduce current allotments to reflect reality •Targeted policy and code responses to prevalent development types •Rethink direct tie between growth and AH mitigation / development •A whole cloth rethinking of growth management 64 Direction from Council 1)To what degree is a response to this issue a priority for Council? 2)If it is identified as a priority, where is the appropriate response within the range of choices discussed? 3)If priorities for a response are identified, how should staff prioritize this work relative to other Council goals, work program items, etc.? Source: Cover of 1977 Growth Management Plan 65