Part-Time Paradise

The Nest in the West End — Adorable cottage in central Aspen’s West End. Walk to music tent or trail. Expansion plans done to add 5th bedroom. Huge old pine trees. Built 1953. Remodeled 1996. $2,375,000.

ASPEN, Colorado — It’s a sunny August day in Aspen, and the West End, a neighborhood of multimillion-dollar Victorian-style homes, hums with activity. Residents and visitors stroll the streets toward the music festival tent a few blocks away, while families on bikes pedal toward the Rio Grande Trail. Gardeners tend lovely flowerbeds. A caterer delivers gourmet provisions for a cocktail party while helpers set up "valet parking" signs.

"We came for two weeks in 1968, stayed for five, and never stopped coming back," Joan Harris, a Chicago philanthropist who is chair of Aspen’s Music Festival board, says. Her feelings about her family’s second hometown echo that of nearly every part-timer: "Aspen is a refuge. It’s the most healing, comforting place I know, aside from the fact that it’s one of the most gorgeous places in the world. Everybody is just open and unguarded and available and, well, loving."

Fast forward to autumn. Aside from a television flickering in a window here, and a construction crew hammering a new wing onto a house there, the West End is shuttered and lonely. Almost everyone, it seems, has left, returned to other homes in distant cities. "There are more bears than people," laughs full-time resident Steve Goldenberg, surveying the deserted streets. Another resident calls the West End, with its rows of empty houses, "the home museum."

It’s the same story from Vail to Telluride, from Park City, Utah, to Sun Valley, Idaho. Growing chunks of the West’s mountains towns seem to go into deep hibernation for long stretches of the year. Similar clusters are cropping up in places from Bozeman, Mont., to Moab, Utah, and Sedona, Ariz. They are filled with second (and sometimes third or fourth) residences that are only used a few weeks or months out of the year by wealthy owners who really live in Hollywood, Dallas, Chicago or New York.

Led by the baby-boom generation, affluent "equity exiles" have plunked down millions for their condos, townhomes and starter castles in paradise. Demographers, elected officials and planners now recognize a new phenomenon: "hollowed-out" communities, to use the phrase coined by Myles Rademan, Park City’s director of public affairs and communication.

A study published in June by the Northwest Colorado Council of Governments validates what many locals — those who stay year-round to "keep the lights on," in Rademan’s words — already realize: The second-home business, rather than winter or summer tourism, has burgeoned into the economic engine of these communities. Skiing, shopping and mountain biking are now secondary.

While "seasonal" or vacation homes make up just 5 percent of the homes in the Rocky Mountain West, in some of the most attractive resort towns they now amount to a stunning 60 percent or more of the houses, according to the study. And while the boom in second homes provides jobs, it also brings soaring costs of living, the displacement of local workers, disquieting income disparities and a changing social fabric.

Moreover, Western resort towns are way ahead of the curve. The second-home buying spree is still in its earliest stages; most boomers are 10 years away from making that leisure-life purchase. Tectonic shifts in population lie in the future.

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When the Northwest Colorado Council of Governments put Eagle, Pitkin, Summit and Grand counties under a microscope, it apparently became the first entity in the United States to take a detailed look at the second-home boom. The numbers are startling.

According to the study, the percentage of second homes peaks, literally and figuratively, at 67 percent in Summit County, home of Breckenridge, Dillon, Frisco and Silverthorne. Summit’s altitude, roughly 9,000 feet above sea level, did not stop it from becoming the 10th fastest-growing county in the United States from 1990 to 2000.

Next door, in Eagle County — the second fastest-growing county in the U.S. among the oldest boomer group (ages 49-58) — second homes now make up 49 percent of the total. (The percentage is considerably higher within the county’s trophy towns of Vail and Beaver Creek.) In Pitkin County, of which Aspen is the county seat, 55 percent of the houses are second homes, many of them mansions (the average price of a single-family home in Aspen topped $3.65 million this summer). A whopping 42 percent of their owners had at least a third home somewhere else.

Who are these people? As a group, second-home owners are mostly older adults, empty-nesters who are vastly more affluent than full-time residents. In Pitkin County, four out of 10 part-timers have incomes of over $500,000, while almost half of the locals make less than $100,000. "When I look around, I see my ‘Detroit’ — that’s our industry, (second homes)," says Park City’s Rademan. And the homes are just the beginning, he adds: "These people are paying for my kids’ education."

Indeed they are. In the four Colorado counties covered by the Council of Governments study, the building and servicing of second homes generated almost $1.8 billion of the $5.3 billion outside dollars that flooded in last year. The building phase of each second home creates almost 19 new jobs, though by definition they are short-term ones. Once built, the same home creates almost two new jobs, as the part-time residents go out to dinner; buy ski clothes, lift passes and concert tickets; and hire everyone from an interior designer to a landscaper to an aromatherapist. The result: more than 31,600 full- and part-time jobs created in the four counties.

Craig Turner and his wife, Madonna, are typical part-timers. A commercial real estate developer in Lexington, Ky., Turner, 51, owns two vacation houses, one in Charleston, S.C., and the other at Cordillera, a gated community in the mountains overlooking the Eagle River Valley near Beaver Creek Resort. He and his wife, who have two grown daughters, first came to the Colorado mountains 13 years ago to ski, but grew to appreciate golfing and other summer outdoor pursuits as well. They could have settled anywhere, but the secluded beauty of Cordillera and the access provided by Eagle’s regional airport suited them. They built their 4,500 square-foot home here in 1996.

A Harley Davidson aficionado, Turner, with a friend, started a motorcycle club at Cordillera. This year, it sponsored its first charity golf tournament, raising $75,000 for various local nonprofit groups. Even though his primary address is thousands of miles away, Turner says, "I feel like a local when I’m here." He believes that part-timers are "a tremendous asset to the valley. People like me don’t put a burden on the services." He’s right, up to a point; second homeowners generally are not big users of local medical, educational or senior citizen facilities.

Turner’s motorcycle club buddy, Bob Schmidt, a former commodities trader who now lives full time in Cordillera, adds, "If it weren’t for the second-home owners, the restaurants wouldn’t be operating, or the golf courses." Or a few other establishments in Eagle County, for that matter. The Shaw Cancer Center in Edwards, for example, was started with the help of a $13 million gift from the late Harold W. Shaw, a Dayton, Ohio, business executive.

Even locals who worry about the tide of wealth washing over their towns acknowledge that the generosity of part-time residents is responsible for health, recreation and arts facilities they might not otherwise have. In Aspen, few have been more active than Joan Harris. The first thing she did when she got to Aspen years ago, she said, was to go to hear a concert under the big music festival tent. She met her second husband, Irving Harris, who died Sept. 25 at the age of 94, in Aspen, and their involvement with the Music Associates culminated in their donating a lead grant of $1 million for the building of Harris Hall, the state-of-the-art chamber music venue that now sits, largely underground, next to the tent.

Some longtime residents have capitalized on the second-home boom as real estate agents, contractors and home-security providers. More than 32 years ago, Bill Stirling came to Aspen on a sabbatical from teaching Vietnam vets. He helped start Aspen’s peace movement and its branch of the civil rights group CORE. He served as the town’s mayor for eight years and went into real estate and property management. "Never in my wildest imagination did I dream that’s what I would do for the majority of my life," he says.

Other, newer arrivals are reaping the same opportunities. Frank Bauer, a 59-year-old Florida businessman, started a home security business, Proguard Protection, four years ago in Aspen. He says his business has doubled every year since, with clients paying up to $100,000 to install and monitor security systems at their dream houses. Proguard has prospered, he says, because insurance policies on "retreat-type houses" require "professional, unique protection" far beyond the needs of "the standard tract-type home and Mr. USA." These policies typically call for elaborate technological surveillance and monitoring devices such as cameras, or even regular drive-by patrols. When owners are using the houses, they sometimes request bodyguards.

In fact, according to the Council of Governments study, nearly 1,400 of the estimated 19,000 jobs in Pitkin County are in the real estate and property-management industry.

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The frenzy of second-home building and sales in mountain towns has triggered a variety of aftershocks. Discovering that their own houses and condominiums are appreciating wildly, many locals have opted to cash out, pocket their profits and move "down valley," or to another mountain town that hasn’t yet been hit by the boom.

At the same time, these towns have seen the disappearance of what Pitkin County Commissioner Mick Ireland likes to refer to as the old "social contract," in which newcomers "bought an old miner’s house and then rented it out to dishwashers like me" in order to cover their mortgage. The new part-timers are so rich, they pay cash. They don’t need the income from rent; they prefer to let their homes sit empty when they aren’t there.

As a result, the care and tending of second homes has created more jobs, but there are fewer locals to fill them. The need for affordable workforce housing and mass transit has become intense.

Ironically, Aspen and Pitkin County long ago made farsighted decisions to install new sales and real estate transfer taxes to tap the flow of wealth into the community and to mitigate the impacts. The revenue has been used to preserve open space as well as to fund RFTA, the Roaring Fork Transportation Authority — the largest public transit system in Colorado outside of Denver — which ferries down-valley employees to their jobs in Aspen and Snowmass.

Aspen was also the first resort community to build or buy thousands of apartments, townhomes and single-family houses for working people. For decades, the town has been "very aggressive" in adding to its supply of affordable housing, Ireland says. The county also built some units, while employers have been required to provide others.

In addition, since the 1970s, the city of Aspen has regulated the buying and selling of certain private housing with "deed restricted" and "resident-only" housing rules. During Stirling’s time as mayor, the city put a moratorium on new development for several months until the city council adopted stronger measures. One of those measures forced builders who tore down old housing to make room for new mansions to replace 40 percent of the destroyed dwellings with units designed for employee use only.

But despite all these measures, Aspen and Pitkin County are still a long way from where they want to be. Pitkin County has 2,408 affordable housing units on its books, according to the latest figures, but they provide living space for just 35 percent of employees countywide. (The goal is to house 60 percent.) Employees commute from as far down valley as Delta — over 100 miles away. There is such a demand for some of the affordable houses in Aspen that families must enter a lottery to buy them.

And "affordable housing," in Aspen, is an awfully elastic term. Behind Aspen’s Airport Business Center sits a colorful neighborhood of resident-only single-family homes called the North Forty. It was originally created by John McBride, a developer (and former High Country News board member) as high-end affordable housing for middle-class professionals (HCN, 1/21/02). Amid the mostly painted-wood ranch-style homes sits a red-brick house whose turret makes it stick out like a micro-mansion. The previous owner did enough remodeling to qualify for a larger sales cap than is customary: The house sold recently for a cool $1.2 million.

Similarly, recent activity in Aspen’s oldest "affordable housing" neighborhood, Smuggler Mobile Home Park, attests to the steady climb of real estate values. Here, too, owners can only sell to those who qualify as locals, and stringent regulations govern what new structures may look like. Yet the mobile home that once occupied the slab at 101 Maple sold this year for $600,000.

The upshot is that, despite Aspen’s valiant efforts, the town has not stemmed the hollowing out. Stirling has witnessed it firsthand, in his own West End neighborhood. "One morning, I woke up and everybody who lived around me was working downtown with me and I knew them all and we were all part of a community. That evening, it seemed like half of them were gone. The next morning, the other half was gone. Before I knew it, I was living in a ghost neighborhood," he says.

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You would think that, with all its rich folk, Aspen would at least be awash in sales tax revenue. Not so: Like other mature Western resorts, it has watched sales tax revenue decline every year since 2000, even though second-home owners spend five times as much on such things as lawn care, home security, and housekeeping, compared with the average American homeowner, and far more money than locals on clothing and recreational equipment.

A 2003 study by BBC Research and Consulting in Denver, commissioned by the Aspen City Council, put its finger on the reasons behind the decline in sales taxes. It described the town’s commercial core as "embalmed." The aging population may be good for home furnishings and Brioni suit sales, but it is "difficult for bars and entertainment," BBC reported. More and more hotel rooms, which are subject to a lodging tax, have been condominiumized or torn down. Higher commercial rents have led to the closing of mom-and-pop stores, which are then taken over by Gucci/Prada/Ralph Lauren-style high-end chains. Zoning restrictions, meanwhile, limit revenue-producers like sidewalk cafes and live music.

In the eyes of many merchants, however, the major culprits are real estate-related offices, which have forced out traditional retail stores on the street level of Aspen’s commercial hub. At least six timeshare, hotel and real estate offices now occupy space in and next to Aspen’s two-block pedestrian mall.

The Aspen Drug Store had served the town for 112 years, but it simply couldn’t compete when the landlords upped the rates from about $60 a square foot about five years ago to over $100 now, said one former retailer, who asked to remain anonymous. The space, still sporting its familiar blue beams, is now a display area for Snowmass properties being marketed by Intrawest, the nation’s largest winter resort builder. With $1.55 billion in annual revenue, Intrawest owns or operates 10 mountain resorts in the Western United States and Canada, including Whistler Blackcomb, Copper and Squaw.

Real estate offices can "pay top dollar," the former retailer explained, "because (when) you sell one $5 million home, you’ve paid the rent for the next five years." It has been enough of a change to make some locals — such as columnist Jon Busch, an Aspenite for 35 years — nostalgic for what he might once have regarded as the bad old days. "I used to complain about the proliferation of T-shirt shops in Aspen," he says. "Now, I’d welcome them."

An angry group of merchants marched into the Aspen City Council one day in 2002 to demand a moratorium on such takeovers. This fall, the council finally agreed to ban future ground-floor professional offices for the likes of lawyers, developers and timeshare salesmen.

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Predicting the future of the West’s evolving mountain communities is tricky. "Things are changing quickly," says Linda Venturoni, the author of the Council of Governments study.

Venturoni did her original survey of second-home owners in 2003. This year, she followed up with a survey just of Pitkin County. In one year, the percentage of Pitkin part-timers who said they intend to retire to their Aspen and Snowmass residences doubled, from 7 percent to 14 percent. Perhaps the hollowing-out will be a short-lived phenomenon. Another renaissance could be on the horizon, as part-time residents become full-time retirees.

But such a renaissance would bring its own conundrums. Questions about declining school enrollment and a growing need for health care — not to mention the need for more feng shui experts, wine sommeliers, chauffeurs and estate planners, rather than carpenters and plumbers — could be upon the town before anyone knows it.

But that phase, too, may be relatively short-lived. Today, the oldest boomers, who are fueling the second-home market, demand mountain bike trails and Pilates classes. But a few decades down the road, they may be looking for nursing homes, as Aspen becomes the sleeping quarters for retirees in what could be viewed as a geriatric theme park.

Beyond a 15-unit hospital-related assisted living facility, neither Aspen nor Pitkin County has attempted to build housing for the elderly. (The county does have a busy senior center and an active "meals on wheels" program for shut-ins.) "No one is working in this vineyard. It is a huge untapped market and will come with time," predicts Jim Lamont of the Vail Valley Homeowners Association.

BBC’s Ford Frick, who conducted the Aspen tax survey, offers another possible future. He suggests that the "active retiree" phrase may only be an interim one in the lives of the boomer generation. As they approach 75 and 80, the now-vigorous older boomers and early retirees may move again — this time to warmer climates and areas with better elder care.

In fact, according to Colorado state demographer Jim Westkott, retirees already are flocking to places such as Pagosa Springs and Grand Junction — "cooler than Arizona, but warmer than Denver."

However the trends emerge, thoughtful students of these communities, whether they are full- or part-time residents, public officials or merchants, real estate brokers or demographers, do seem to agree on one thing: The boomer tsunami will only swell in the coming years. Now, not in 2010, is the time to start examining how to harness the energy of the coming hordes of wealthy retirees who might prefer to play a productive role in their communities rather than play endless rounds of golf. Now is also the time to consider where the workers who are needed to support these retirees will live.

At 54, dressed in denim overalls, Venturoni is a classic member of the old guard one finds in many Colorado resorts: She is a New Jerseyan who wandered west first to Boulder, then Aspen, before getting married and settling in Dillon. Her husband is a painting contractor, and she says they’re members of a vanishing breed of working people who bought into mountain towns before the prices shot sky-high. She and Mick Ireland wryly call the challenge of staying put, "Mountain Survivor," as if it were a TV reality show.

"Right now, there are two workers in (my house) — my husband and I," she says. "When we sell this house, it’s not a painting contractor and a (Council of Governments) worker who will be able to afford to buy it." The new owners are quite likely to be retirees, who may participate in charities and do volunteer work, "but one way or the other, the residents won’t be participating in the workforce, and that’s what these communities really need to be concerned about. Where is the workforce going to be housed?"

Grace Lichtenstein writes from New York, N.Y., and New Mexico. She spent more than 12 years with The New York Times, including three as Rocky Mountain bureau chief based in Denver.

The following sidebar articles accompany this feature story:

- Second homes, by the numbers

- Former Enron CEO took his money and ran

- Can Vail find room for its workers?

- As the town hollows out, one Aspen neighborhood thrives

This article was made possible with support of the EMA Foundation.

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