Mammoth Real Estate Q&A — The Hard Road NOT To Aspen

This Mammoth Real Estate Q&A appears in the 4th of July Week 2023 issue of The Sheet.

Q: You remain pretty bullish on Mammoth and the real estate market. What negative or potentially negative things are you most concerned about?

A: My optimism for Mammoth’s future could be a consequence of living through so many economically challenging times here; recessions, droughts, hantavirus, earthquakes and more. The 1980s and 90s were not peachy economic times. We dealt with seemingly endless stagnation. The early 2000s was a golden time but was short-lived and we rolled right back into another serious drought period and an even greater economic downturn. Many valuable local residents have come and gone, and most didn’t want to leave. And many rode the real estate elevator up and down, and down and up.

This new post-pandemic era is marked by many positive things for the local economy. The general flow of capital into the community is quiet, yet profound. It is unlike anything I can recall. The Alterra ownership and affiliation is another; for better, or for worse. Other demographics and demographic trends are leaning our way. The local government is flush with cash based on tourism related taxes. But any of these could become the bugaboo. 

And oddly, the prevailing attitude seems to be “who cares” as long as real estate values keep going up. It is an odd societal condition (and not one I’ve ever tried to advance). Older local residents can gripe about the changes to the community, but at least their real estate values are still high and they have endless options to leave and relocate (and many old timers have). This wasn’t true for many, many years.

But what could go wrong? I certainly don’t see Alterra abandoning its “crown” resort in any way, in fact I believe it will warrant increased attention. It has vulnerabilities, but it remains the anchor of the company. The flow of capital may change with varied economic conditions, but there is a new profound affluence in the community like we have never seen. And demographics? Southern California and the thirst for outdoor recreation and relaxation isn’t likely to go away. In the end, the biggest problems could come by being poor stewards of the community. Hubris and profligacy can destroy more than imaginable.

On a recent vacation I read a new book on Aspen tilted “High Attitude” written by Glenn Beaton, a long time columnist for The Aspen Times.  Mammoth is sometimes, almost laughingly, described as “the next Aspen.” If this book is correct, we may want to rethink any such aspiration. While there are many redeeming aspects to Aspen, many things have apparently gone awry (according to the book). And the community has allowed it to happen. The book jacket states the reading is “ugly, riveting, and instructive on what other resorts—and the rest of America—should avoid.”

The book gives a history of Aspen including the founding of the ski resort and the “intellectualism” community (I highlighted this intellectualism concept in my 2006 column “A Long Road To Aspen”). But the book advances quickly to the problems which have created a seedy underbelly to the community. All while real estate values went, and remain sky high. 

The author details the two major seriously detrimental problems that have evolved over time. The first is a common acceptance of crime, even serious crime. Most of this came about during a 24-year stint (1986 to 2006) by one man as County Sheriff. The man was inspired by then Aspen resident Hunter S. Thompson of Fear and Loathing fame. The Sheriff’s “libertarian approach to individual drug use also failed to consider societal effects. Aspen, unfortunately, became a case study illustrating those effects.” And by early 2000s, “cocaine was openly dealt in Aspen.” 

The tolerance for crime went farther than drugs and even included murder. One of Ted Bundy’s first murders happened in Aspen, and once they eventually had him incarcerated they negligently allowed him to escape. He murdered two dozen women after his escape. Then there is the infamous murder of ski racer Spider Sabich by his girlfriend and actress Claudine Longet. The case was bungled by law enforcement and she got a small sentence. She still lives in Aspen. There are many more anecdotes.

The second major problem identified by the author is a real community disaster and it is focused on real estate—the cronyism and mismanagement of their extremely well-funded workforce housing program. It has devolved to what the author calls “a taxpayer-subsidized housing scheme turned into an enormous, untouchable entitlement program.”

The funding mechanism for the Aspen (Pritkin County) Housing Authority is from ”taxing the rich.” In 1990 the Aspen City Council imposed a one percent tax on the sale of residential real estate. That adds up to plenty. According to the book, last year it generated $20 million on gross sales volume of over $2B. That is a lot of money—almost as much as the Town of Mammoth’s Lakes total annual budget. The Authority has over 3,000 units in inventory with a collective market value of over $3B. Sounds pretty good. But there are some serious problems. 

The core problems are the original qualifying standards and the long-term follow-up for remaining qualified (in Mammoth, tenants in “affordable housing” have to be regularly re-certified). “To become a resident of the tax payer-subsidized housing program, there are two financial requirements. First, the most recent tax return of the resident-to-be cannot show over $212,000 in annual income for a couple….Second, the couple’s net assets cannot exceed $984,000.” 

The housing residents are also required to work at least 1500 hours per year in the County and are not suppose to own other real estate in the county. All of this is suppose to be regulated periodically, but apparently is not. To a point of outrageousness. The work requirement is waived once a person is in the unit and retirement doesn’t trigger a loss of ownership. “Retirees seldom move out because there is no better housing deal on earth. As a result, this program, originally intended to house local workers, has skewed wildly over the years toward old retirees. The average age of residents is now in the mid-fifties. Some 23 percent are over sixty-five. Some have not worked for decades.”

Despite the real workers in the community clamoring for an opportunity at subsidized housing, nothing appears to change. And certainly none of the occupants in subsidized housing want any  change. These subsidized (squatting) owners are essentially trapped. They can sell their properties, but the sale price is limited to “the extremely discounted price they paid years ago plus a 3 percent per year inflation escalator”. Many of these properties are slope side to Aspen Mountain and true market value is in the multi-millions.

And two more outrageous factors—many owners are now doing short term rentals in their properties during peak tourist periods and making significant revenue out of their subsidized housing. Plus, the HOAs in these projects are falling way behind on reserves because “the residents have little incentive to maintain their buildings in good repair because their resale price is fixed.” Ultimately they know the Housing Authority will most likely bail them out. And according to the author, laughingly, these residents are also the most anti-development crowd in all of Aspen.  

Now, I’m not implying Mammoth is heading towards being too lenient on crime or has an abused  workforce housing program. Neither is perfect. I have far more experience with the housing side and I know Mammoth’s isn’t operated like Aspen’s. The overall structure is different, especially the funding of the program. 

But after reading this book, it confirms to me that government run programs can get out of control and can become seriously detrimental to the success of the overall community. Mammoth isn’t there yet, but.… Part of it comes with too much money sloshing around the city/town. Almost unbelievably, Aspen’s municipal budget is ~nine times that of Mammoth’s. As Mammoth’s municipal revenues continue to escalate, these abuses are bound to happen. The ongoing TBID debate, questioning extravagant marketing budgets, etc., are harbingers of this. And spending $30million for things like ice rinks that truly only serve special interest groups.   

Ultimately, government is notorious for being a poor allocator of resources, and potentially corrupt. Mammoth is at an interesting juncture; there is excess money in the Town coffers, there is a focus on recreation, play and party, and it is vulnerable to corporate interests. Embezzlement can be a problem too (anybody remember that?). All kinds of nefarious things can happen. I have waning trust in the leadership of the community to be savvy enough to see it happening. If it can happen in Aspen, it can happen here. The community needs to keep a watchful eye on budgeting and for a variety of potential abuses. Community priorities need to be clear. Or, maybe nobody really cares, as long as the streets get plowed and real estate keeps going up in value. This is my biggest concern in the summer of 2023. 

The book ends with a timely summary;

“Humans are not built for nonstop enjoyment any more than they are built for gluttony. Like gluttony, however, play is seductive—and addictive. People who become unhappy and unhealthy from gluttony, drugs and other vices think the cure for their unhappiness must be more of the same. They confuse pleasure with happiness. This is a common affliction in modern man.

When a wise thirty-three-year-old declared his nascent nation’s independence a couple of centuries ago, he wrote of a God-given right to pursue happiness in conjunction with a concomitant right to life and liberty. He was not writing about skiing, drugs, gourmet meals, or endless play. He was writing about living an examined life—a life of merit, achievement, dedication, and service, a life of truth, justice, and beauty, a life that Thomas Jefferson himself exemplified.

That, my friends, is what these World War II veterans and Chicago industrialists who were the founders of Aspen knew, and what many of us have forgotten. I pray we relearn it before it’s too late.”

Happy 4th of July!        

Paul Oster is the Broker/Owner of RE/MAX of Mammoth (celebrating 30+ years). For other timely real estate information you can go to For legal, accounting, or construction advice, please seek out the appropriate professional.

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