When a region experiences soaring property values, it’s well known to be good for sellers and not-so-good for buyers. But it can be a nightmare for longtime middle-income residents who can be priced right out of their homes by ballooning rent or mortgage bills. Most often, the ones most challenged are those who support the local infrastructure and service industries.
For employers, including FBOs such as Atlantic Aviation at Aspen-Pitkin County Airport in the chic Colorado ski resort, the challenges of booming real estate include ensuring their employees have enough compensation to afford to stay in town and keep showing up for work.
Atlantic, with a staff that fluctuates between 45 to 60, meets that challenge, in part, with a monthly $1,000 housing allowance for all full-time employees. General manager Jonathan Jones said, “One of the biggest things we’ve seen in the last two years is rent going up. I’ve heard stories about rent being $1,600 and now it’s $2,600.”
His aim is to “help people stay where they are instead of moving away, and it can help as a down payment on a house or for somebody who qualifies for employee housing.”
While the housing stipend ultimately serves the long-term best interests of maintaining an ongoing business by retaining an experienced workforce, Jones told a local Aspen newspaper, “I think it goes back to the simple principle that we’re for them [the employees] and not against them. You look at ways to better their lives, and when they see that, it secures the culture that you want and it secures the belief that what we’re working for is not just about the bottom line.”
We have a vacation home in a much less desirable resort town, and similar problems are arising. Airbnb is catching most of the blame, but I think the reality is that Airbnb is exposing a fundamental problem in the economy. The effects of regulation and government on housing are now starting to look a bit like we have seen in aviation.
We have a whole lot of laws, regulations, and habits based on circumstances that no longer prevail. The rate of change now outpaces the ability of our institutions to react in ways we’ve just not seen before. In fact, the laws and regulations are getting exploited to create profits sometimes without really creating value.
It’s past time we re-examine all the rules and regulations with an eye for what they are supposed to achieve and whether they should be changed or scrapped. We need to watch out for the laws of unintended consequences while we are at it.
I agree. I hate the idea of more regulations limiting property rights but at the same time you can’t allow a free for all.
The before and after of the housing market may be heavily regulated. Zoning, occupancy, codes and such.
However, the actual purchase process of buying a house has little to no regulation. Some basic non-discriminatory regulations, maybe, that are hard to prove. But the purchase process is one huge scam against the buyer.
Realtors, home inspectors, banks, sellers, appraiser, everyone who touches the buying process is in on it to some degree or another.
Appraiser doesn’t match up to what the seller and/or realtor want? That appraiser will never be called upon again and looses business.
Home inspectors find $20k of termite and flood damage and reports it? The realtor makes sure that inspector is black balled.
Oh, but the buyers agent has a “fiduciary duty!”. Sure. Think about it: The buyers agents commission depends on the buyer paying as much as possible for a house.
I’m with you on everything except the price. You pointed out my favorite about the agents and how their incentives to get the deal done quickly and at highest price are not aligned with the buyer, but quickly is the real motivation so they aren’t even really aligned with the seller either.
Our policies over a century have made housing much more expensive, and I can even draw parallels to similar policies in GA.
First, there’s all the “affordability” initiatives. Each one adds demand and helps buyers spend more. The 30 year mortgage, FHA, Freddie and Fannie, VA loans, etc. all raise the market price especially for low end homes. Zoning laws pushing single family housing use more land decreasing supply. Land use laws deny land to developers, and then there’s California. Ugh.
Less directly, the government has made homes an attractive investment vehicle through tax policy and monetary policy. Corporations are now getting into home ownership in a big way, and one reason is that they know politicians will choose policies to protect home values. And finally, public school policies lead to housing in some areas becoming super valuable while empty homes rot across town. We now have new municipalities designed around the idea of keeping out lower class residents by zoning for only large, expensive homes.
I’m only aware of policies for aviation after the nineties, but bonus depreciation and mileage use laws subsidized new aircraft leading to a resurgence in production in the late nineties along with the booming economy. This led the manufacturers to up production and then the write off policies got reversed (ostensibly to attack corporate jets) leaving them vulnerable to the Great Recession. There is disagreement as to the mix of blame between government and finance for the housing crash, but it wiped out piston GA leaving turbine aviation in reasonably good shape.
If only we could get the politicians to take the Hippocratic oath.
A couple of years ago I drove right by that airport. I didn’t see any 172’s on the ramp or tie downs. Aspen and affordable are 2 words that don’t go together.