You might think the lucky recipients of taxpayer-subsidized housing in Aspen would be careful to maintain those houses. But the law of unintended consequences is at work.
Here’s what happens: Houses are bought at prices set by the local government housing authority. Those prices are way less than market value — often an 80 to 90 percent discount. Aspen taxpayers make up the difference.
When the residents resell their houses, their resale price also is set by the housing authority. Once again, it is a small fraction of market value.
Since the government-set prices are so far below market value, there’s no doubt that the sellers will receive that price in full. Whether the houses are in tip-top shape or falling down, the selling prices will be the same so there’s no economic incentive to maintain them. Indeed, the homeowner association reserves established by the residents of the projects for ongoing maintenance are only 22 percent of what is necessary. The maintenance that the other 78 percent is supposed to pay for is simply left undone.
The current debate is whether local government should give the homeowners associations taxpayer money to make up that 78 percent.
But what then? Continue reading

“You lied to me!” So said my 6-year-old daughter to me one merry Christmas.