‘Housing Hustle’: Aspen Considers Stiffer Penalties For Subsidized Housing Abuse

By Brian Maass

ASPEN, Colo. (CBS4) – The Colorado resort town of Aspen is considering ramping up compliance checks and enforcement of subsidized housing rules after learning that many residents living in taxpayer subsidized housing are turning around and re-renting rooms, condos and entire houses to turn a profit.

“It is aggravating, it is appalling,” said Mike Kosdrosky, executive director of the Aspen-Pitkin County Housing Authority.

(credit: CBS)

(credit: CBS)

APCHA manages thousands of subsidized housing units but with a limited budget, the agency can only look into tips and complaints and is unable to proactively seek out fraud and abuse.

Kosdrosky says every year, based on tips, APCHA finds residents in subsidized housing units re-renting their homes on sites like VRBO, Airbnb and Craigslist, attempting to turn a hefty profit.

“By no means is it okay to profit from your deed restricted affordable housing unit whether you own it or rent it,” said Kosdrosky. “We need to ramp up compliance and enforcement and need to put a fine system in place.”

Kosdrosky said Aspen needs “to show the public we are serious about taking care of the existing inventory and that it’s being used the way taxpayers expect it to be used.”

(credit: CBS)

(credit: CBS)

That’s not always the case. CBS4 found numerous residents using their subsidized housing as an additional revenue stream. People like Shayn McFarland. The 40-year-old Aspen resident was able to buy a condo in a prime Aspen location in 2006 thanks to the Aspen housing subsidy program. He estimates public dollars allowed him to pay about half of what his 740 square foot condo was actually worth.

Hustling to make ends meet, McFarland rented out his condo on Airbnb for several prime ski weekends last winter.

“I needed money. Aspen is not a cheap place to live,” said McFarland. “I knew I was breaking the rules because I knew a lot of other people were doing it and they were getting away with it as well. I know people who have rented out places for a couple years but I was just trying to do a couple weekends.”

(credit: CBS)

(credit: CBS)

When a neighbor tipped off the housing authority, McFarland was caught. He told CBS4 he knew what he was doing was wrong and against the rules. The housing authority told him not to do it again and there were no further repercussions.

“It’s the equivalent of a slap on the wrist,” said Kosdrosky. “I think the public is in favor of us increasing enforcement.”

Glenn Beaton certainly is in favor of coming down harder on residents who turn a buck on their subsidized housing. Beaton has lived in Aspen for eight years.

Glenn Beaton is interviewed by CBS4's Brian Maass (credit: CBS)

Glenn Beaton is interviewed by CBS4’s Brian Maass. (credit: CBS)

“Its common knowledge there’s fraud and abuse in the program. They get it for dimes on the dollar then sublet it for dollars on the dollar, so the subsidy isn’t for their house, it’s for their little rental business,” Beaton said. “That bothers me quite a bit. That’s not what the system is set up to do.”

Beaton says for prime ski weekends, residents can rent out their homes to tourists for thousands of dollars a night.

The housing subsidy program was designed to allow workers in Aspen to actually live in the pricey ski town and in Pitkin County. But Beaton says the housing hustle “takes money away from the people who earned it and gives it to the people who want it.”

Beaton believes that penalties should be increased for those caught profiting off their subsidized housing.

(credit: CBS)

(credit: CBS)

“I think they lose their place at a minimum. They should disgorge the profits they’ve made and arguably they should be prosecuted for the crime; it’s against the law.”

A second Aspen area resident living in a subsidized home told CBS4 he too rented out a room in his home on Airbnb to buff up his bottom line.

“Its easy money,” the man said.

He too said many Aspen and Pitkin County residents in subsidized homes are capitalizing on the resort town’s desirability and renting out their homes to ski visitors and tourists.

Kosdrosky says that is against the rules and contrary to the intent of the program. He is now pressing for more severe penalties like a system of fines and more manpower for his agency to enforce the guidelines of the subsidized housing program.

CBS4 Investigator Brian Maass has been with the station more than 30 years uncovering waste, fraud and corruption. Follow him on Twitter @Briancbs4.

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