Magazine March 9, 2020, Issue

In Aspen, Billionaires and Baristas

(Roman Genn)
Where millionaires need affordable housing

Aspen, Colo.

Tim Foster won the lottery. He was, he says, “pleasantly surprised.”

On the second-to-last day of 2019, Foster got the news that he had won the Aspen housing lottery, meaning that he will be able to buy a subsidized home in the famous resort town, which has for years been either at or near the top of the list of most expensive residential-real-estate markets in the United States. “Winning the lottery” here means the chance to buy a condo that is still pretty expensive, but not as expensive as it might be without Aspen’s robustly interventionist local housing authority. Aspen maintains two separate residential real-estate markets. In one, the free market prevails and prices are bananas; in the other, deed restrictions cap property appreciation at 3 percent per year (vs. the 12 percent annual appreciation typical of recent years in Aspen) and limit the sale of homes to people who hold regular employment in Aspen or elsewhere in Pitkin County. Some of those deed-restricted properties sell for upwards of $1 million, but they are, by local standards, a bargain.

Foster, a former Peace Corps volunteer who now serves as CEO of a tourism-related business with employees in resort towns around the country, believes that Aspen has one of the better affordable-housing programs he has seen. 

“It’s nice that some people can live here who aren’t millionaires,” he says. 

Millionaires? Please. 

Mere measly millionaires of the one-or-two-million-dollar variety need not even bother looking too hard in Aspen. This is a town of billionaires and baristas, a place where rich progressives (the county went 70 percent for Mrs. Clinton in 2016) have got together and, despite their best intentions, created the greenback-caste dystopia of their own worst nightmares: an economy with Silicon Valley kingpins and Wall Street douche-rockets at the top, relatively low-wage service workers at the bottom, and not a hell of a lot in the middle. And this isn’t Houston or Las Vegas or some other place with a more or less unlimited capacity for suburban sprawl: In the high season, there is one road in and out of Aspen. Commuting is complicated. And so Aspen’s housing authorities aim to put half of the workers who are locally employed into subsidized housing of one kind or another. 

Half. Teachers and police officers and hotel staff—but also CEOs, lawyers, and business owners. 

Aspen is expensive. It is shockingly expensive. Maybe you’ve heard that. But it is even more shockingly, outlandishly, punitively expensive than you might guess watching the fit and burnished beautiful people of the world meandering through downtown streets in which Dior and Loro Piana boutiques snuggle up against outposts of Moncler and other traditional winter-sports brands, cutting bellas figuras Alpine-style, which means sipping a turmeric latte in tailored skiwear that doesn’t take up too much space in the close quarters of the local cafés, sunglasses perched just so, or enjoying a $1,700 bottle of Le Chemin vers l’Hérésie and foie gras at Cache Cache, or jamming their skis into the racks mounted on the outside of city buses here and making their way to Steeplechase or Thunder when they’ve had enough of Ajax. 

The bus stops in front of a house that is for sale—not a time-share or a condo but an honest-to-goodness free-standing house, albeit a two-bedroom, one-bath affair that is less than 1,000 square feet. It is listed at . . . $3 million, making it one of the cheapest houses on the market in Aspen. The houses for sale within a few blocks range from $6 million to $31.5 million. One-bedroom condos commonly command a million bucks.

And that is why a family earning nearly $300,000 a year with just under $1 million in assets—enough to put it well into the nation’s 98th income percentile—is, in this absurd and absurdly beautiful place, eligible for housing assistance. 

Aspen is a city that needs more affordable housing for millionaires. 

But if a mere millionaire can’t quite afford a place in Aspen, the big kahunas—the “Aspen 50”—often own more than one. The late David Koch owned two homes in Aspen; brother Bill has four. (Frugal brother Charles owns only one.) Roman Abramovich has two. Leonard Lauder has four, as does Ann Walton Kroenke, the Walmart heiress who met her billionaire husband, Stanley Kroenke, in Aspen. (“It’s a small world when you’re rich and white,” says one Aspen regular.) Stanley Kroenke’s Aspen portfolio is described as including “adjoining Red Mountain properties, an Aspen Mountain townhome, and a commercial building on Galena Street,” worth about $30 million in 2014. His 2011 house purchase was Aspen’s most expensive residential transaction that year. Jeff Bezos and Michael Dell have homes for their parents in Aspen but none for themselves. 

And there are a great many less famous names attached to fortunes in the mere hundreds of millions. People who buy $40 million homes in general do not want affordable apartments built next door—or in the line of sight from their balconies. Aspen’s politics may be progressive, but its real-estate ethos is profoundly conservative. These people are happy with Aspen the way it is, and they have good reason to be. 

“If it’s Aspen, Crested Butte, or the South Side of Chicago—if it’s next door to you, it’s next door to you,” says newly elected city councilman Skippy Mesirow, a young man with a mid-period-Morrissey hairdo and eight or so silver rings on his fingers. “People in this community are very active and engaged, and that’s an awesome thing.” He chooses his next words carefully. “In some limited instances, people are so resourced”—he means gobsmackingly wealthy—“that they are able to influence things in a way that other people couldn’t. That happens. It’s not the norm, but every couple of years, there’s some project that has that issue.” 

If Councilman Mesirow is circumspect, there’s a good reason for that. He’s just been at the center of what passes for a political hurricane in this quiet little town, for an offense that is very much of our time: a profane Instagram rant, one in which he declared Aspen’s traffic situation to be “a f***ing disaster,” with “goddamned people and things and accidents everywhere,” and suggesting that Aspen might be better off with fewer visitors. 

Most of the “Aspen 50” billionaires don’t keep homes in Aspen proper but in Pitkin County, outside the city limits, particularly around Red Mountain, a.k.a. “Billionaires’ Mountain,” a place where, as Forbes anachronistically put it, the “phone book reads like a Davos VIP list.” But they and members of the adjacent class of slightly less splendiferously super-rich exercise an outsize influence on the town, the county, local politics, and the local culture. 

And as in a hundred similar resort communities, the locals’ seething resentment of the moneyed visitors and part-time residents—those people—is always there, simmering just short of a boil. “I think it’s time we have the conversation about it’s too many people in town at peak season,” Mesirow wrote in his jeremiad, “and they are not the right people.” The right people: That got up the noses of a few Aspen taxpayers—and some Aspen residents who are there only a few weeks a year are substantial taxpayers—and more than a few local business owners, too, who didn’t appreciate the snooty attitude toward the people whose spending pays the bills. Mesirow apologized for his outburst in the now-familiar neo-Maoist fashion (“Thank you to the community members who reached out to me and criticized me”) and blamed his irritable mood on the conclusion of a two-month stint of cleansing veganism that he broke with “a steak, compound butter, creamed spinach, and bread,” as the Aspen Times dutifully reports. 

Councilman Mesirow may be exactly the kind of meretricious preening weenie thrown up by the Alexandria Ocasio-Cortez generation of progressive activists, but his take on Aspen’s housing scene is more or less spot-on. “We’re a town that likes its open space, that doesn’t like development, and that wants more housing—these are competing interests,” he says. “That’s the challenge.” Hiring is a problem. “I was talking to a business owner the other day who told me that when he put out an ad for an open position, he used to get 60, 70 applications—now he’s lucky if he gets two. If you are hiring from outside of Aspen, you can assume a 50 percent attrition rate just because of cost of living, and housing in particular.” 

This is partly a question of—as Mesirow and others put it in the grating argot of skiers and surfers everywhere—“vibe.” Aspen is not supposed to be Beverly Hills on ice. Its secret sauce comes from the same recipe that once made San Francisco and New York City such desirable and interesting cities: the mix of high and low, money and culture, old and young, capital and labor. Aspen still has its young ski bums sleeping five or six to an apartment meant for two or three, and the Aspen Ideas Festival and the area’s other summer offerings have made it less of a single-purpose ski town and more of a year-round destination. But a year-round destination for whom? Partly for the Cannes-and-Davos gang, but also for a decidedly less glamorous old, rich, and boring set. And the full-time locals are getting richer and older, too. 

Aspen boasts an inventory of 3,000 deed-restricted units, mostly workforce housing that is available only to those who work 1,500 hours a year or more in Pitkin County. But one of Aspen’s problems is that much of the affordable worker housing that came onto the market 20 or 30 years ago is in effect slowly turning into retiree housing. “We have a demographic shift under way,” Mesirow says. “We have a commitment to care for the people who built that housing and created this town, but we still need to house our workforce. And we need to do all of that in an environment that is constrained by dramatically increasingly free-market values.” One way Aspen regulates its affordable housing is by limiting the sale of certain properties to people who work a minimum number of hours a year. But in a town with a highly seasonal ski economy, that can get complicated. “How do we count work?” Mesirow asks. “Where do you have to be? What are minimum-income requirements? If we want to have elder care in unit, is that allowed?”

Aspen is an extreme example—maybe the most extreme example the United States has to offer—but the phenomenon is pretty much the same from coast to coast. Like the Bay Area and New York City, Aspen has some natural geographic limits on growth, but those are less important than you might imagine: While the densest parts of Manhattan are unlike anything you’ll see in Southern California, the New York City metro is in fact a little less dense than the sprawling Los Angeles metro, with 5,239 people per square mile compared with 7,009 in greater Los Angeles. And even the very dense sections of New York City, which sits on three islands and the tip of one peninsula, are less dense than comparable areas in less geographically constrained world capitals such as Paris. Of course history and geography play a role, but the factors that most severely constrain housing are in the main political

For generations in the United States (and in the United Kingdom and many other parts of the world), rising home prices have been treated as an unadulterated good—by the politicians, at least. There is a pretty straightforward political-economy reason for that: Homeowners are on average older and wealthier than non-homeowners, more likely to have children, and less likely to be contemplating a move to a new city in the near future—which is to say, they are much more likely to be politically engaged and politically powerful, especially at the local level, where the most important housing-policy decisions are made. But their power is felt at the federal level, too: The U.S. government has for years worked to keep housing prices moving in one direction—up—while at the same time trying to mitigate the unpleasant economic consequences for homebuyers by subsidizing debt, making it easier and cheaper to borrow enough money to pay for those more expensive houses. 

Houses do not break down and wear out as quickly or completely as automobiles, but they do break down and wear out—and there is no good economic reason to expect a 30-year-old house to be worth more than a new one, or to expect a house to appreciate in real (inflation-adjusted) terms at all, much less to appreciate in real terms more than business stock or other kinds of investments. From a basic supply-and-demand perspective, houses might be expected to increase dramatically in value if the population is growing quickly or if supply cannot keep up with demand. But the U.S. population is not growing nearly as fast today as it did in the past—our growth rate today is half of what it was in the early 1990s and less than half of what it was in the early 1960s. 

But housing demand is not evenly distributed across the country: Metro Austin grew by 37 percent from 2000 to 2010 and then by 26 percent from 2010 to 2018. Metro San Francisco has added about 1 million people since 1990. The populations of economically vibrant smaller cities such as Saint George, Utah, and Midland, Texas, are booming. The United States is becoming more urban as economically stagnant rural areas lose population, and the most desirable urban areas offer a textbook case of the rich getting richer: High-income newcomers reshape the economies and the cultures of those areas, which is why cities such as San Francisco and Austin offer so many interesting new ways to make money and so many delightful new ways to spend it. 

There are little Aspens all over the place. 

“The nationwide housing crunch has been noticeable here in Aspen for a long time,” says Chris Everson, the City of Aspen’s affordable-housing project manager. The underlying economics of Aspen may be more radical, but they are in many ways similar. “The forces that are at work on this small community are more intense than they are on average in the rest of the U.S., and they’ve been at work here since at least the mid 1980s.” In fact, Aspen’s newspapers contain columns about the local housing crunch going back to the 1960s. “Fundamentally, you’ve got ultra-wealthy folks driving up the price of land, and so folks who work in the community have less opportunity to live in the community where they work. Aspen used to have the goal of housing 60 percent of the local workforce in Pitkin County. That goal has been dropped for a number of reasons. One is that it’s not achievable. We can’t build our way out of this crisis.”

For one thing, it isn’t only a housing issue, even though soaring land prices are the top economic constraint on building affordable housing in Aspen. The housing problem is also a parking problem, a traffic problem, and a road-and-bridge-capacity problem, a general infrastructure problem. Local business owners speak highly of the bus service that shuttles many Aspen workers to work from their homes down valley, but there remains a great demand for parking and for the ability to drive—people may take the bus to work, but they want to be able to have a car of their own, and maybe more than one, for other transportation needs. Everson tells the story of one affordable-housing development that was built with 1.6 parking spaces per unit and then given a whole range of transportation support—a dedicated bus route, an additional shuttle service, and even vouchers for ride-share services. A few years later, when the city was engaged in negotiations with the housing association over building on some adjacent land, the residents told them they could keep their vouchers and their shuttle—what they really wanted was a couple dozen new parking spaces. “They had the opportunity to get whatever they wanted, really,” Everson says, “and what they wanted was—more parking.”

People want what they want—just as though they had minds of their own. The central planners may envision soaring apartment towers sitting atop rail-based transit hubs in densely packed urban cores, but the American taste for four walls and a quarter acre of one’s own, and maybe a big V-8 engine, is not going to be revoked via plebiscite. 

Back at the Jerome Hotel, at the bar where longtime Pitkin County resident Hunter S. Thompson used to do a lot of his drinking, Councilman Mesirow’s wrong men—the Wrongest Men, really—are out in Bro!-Bro!-ing force, trying to figure out which overproof rum in what precise quantity will allow them to most effectively set a mug of hot chocolate on fire. Mission accomplished, a little volcano of very expensive lava flows over the edges onto the saucer. The valets out front wear cowboy hats with horsehair braids, but the theme here is less Old West than New Money. 

It’s cold here in January, but I am thinking of a warm place farther west: In Malibu, right there on Pacific Coast Highway, sits a Jack in the Box restaurant. It opens at 6 a.m. and stays open until midnight. Somebody is the manager of that Jack in the Box, and somebody is the assistant manager. Somebody gets there before 6 a.m. to prepare those Extreme Sausage Sandwiches, and somebody stays after midnight cleaning up after the last rich hippie in Malibu has finished the last Spicy Nacho Chicken Sandwich Munchie Meal of the evening. Where do they live? How do they get there? Not long ago, I saw a mobile home for sale near there—for $1.5 million. Location really is everything—the mobile homes around Malibu are pretty nice, but you’re really paying that $1.5 million for the right to rent for a few thousand dollars a month the lot the mobile home sits on. As the investors’ proverb has it: They aren’t making new land, especially not on the beach in California. Not in Aspen, either. 

At the same time, there are cities and small towns in this country jam-packed with houses that you couldn’t give away, and a great many more that can be had for the price of a modest automobile. There is a Great Sorting under way—if not quite into Aspen’s world of billionaires and baristas, nonetheless into one of real-estate haves and have-nots, some of them climbing the ladder of real-estate-based wealth and some of them finding it increasingly difficult to get a firm and stable foothold on the first rung of it. Winning the housing lottery may be a solution for a few families every year in Aspen, but winning the lottery is not really much of a plan for those Americans who want to go where the jobs and the wealth are but whose housing budgets are more suited to the places where the despair and the stagnation are—people who, perversely, simply can’t afford a higher-paying job elsewhere. Los Angeles, Orlando, Austin, Chicago, Boston—none of these may have Aspen’s vibe, but they do have a version of its housing problems. Those problems may seem less dramatic to the beautiful people meandering from the Little Nell lobby to the Ajax Tavern in this shining city on a hill, but they are the stuff of very heavy drama indeed for families at the very edges of economic viability in many of our other shining cities on hills, on bays, on rivers, on the coasts . . . 

Funny thing about Aspen: The dizzying heights of its mountain peaks and the dizzying heights of its real-estate market provoke the same queasy understanding: The view from the top is spectacular, but it is an awfully long way to fall.

This article appears as “Billionaires and Baristas” in the March 9, 2020, print edition of National Review.

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