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Aspen's economic engine; second homes
By gcott Condon
ltlay 27,2OO4
Modera-day Aspen was built on an economic model thar wos boartifirl in its
simplicity; Anract hordes of tourisu ro play ia the rnountains rLnd atknd
cultural activities, aend them home after tbey spend londs sfcnsh on food' and lodging, rcplace t}em and repeflt the process.
Everybody wae bappy - the touriets got to spend smre timc in Shangri-I-a.
Iocals made enough money to scratch out a living in the mountaits. tf,e
town could sky small enough to maintain its charm because touri*ts were
visiting but nor staying.
The model worked spleudidly throughout rhc 1950s, '60s and .?0s. But
sonetimc io ihe last 20 years c so it sluted !o change. An increasing
number of murisrs weren't satisfied with a brief respite in the rnountains.
They wanted to Etay longer.
Second homes have long been a part of Aspen. But until the ltr90s. second-
horne omers were essentially like wintu' and sumrner tourists - they
came, th€y saw, they spen! and then wenr home after a week or tv/o.
Now they've got the financial wherewirhal and rime |o stay longer. Greater
numbors of second-horne owners are rstired and can afford to rpend mote
time away from the rat rece. Thanks to technological advances, those still
working as captains of commerce can command their ships from secluded
6'pots iD Pitkin county.
A greater willingness to travel means it isn't difficult now to s;rcnd a few
weeks in Aspen dlring winters ard a few more during summcrs_
No one whq watChes rhe ASpen cconomy Or nationfl frends w6uld be
surprisod to learn that annual spending by second-home owners i.s now
greater dran spending by winter or summcr lourists in pitkiu C,runty. But
the degrec o which sccond homes imtl homeowners domiuate rhe local
economy is au eye-catcher,
The Northwest Co.lorado Council of Govel.nments recently rclt:ased he first
known snrdy to take an in-dcpth look flt second-home ownersirip in four
reson counties in the heart of the mountains. including pitkin County. The
study errmined who is buying second homes and why. how mrrch rhey
spend and the impacts they have on rheir adopted communities.
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In Pitkin County, second-home owers accgunr fc'r 34 pcrccnt of all the dollars that flow into the county from outside sources. Incontrasl winter visitots account for only 22 percent of those outside dollars, and summer tourists l B percent. In other wor&,Second homes are tle county's biggest economic engine.
"I was surprised by thc size of thc second-homes' economic driver. It was a little bigger thur I expected." said l-inda Venturoni,special projects directol for NWCCOG.
Unfortunately, no comparable data is avdlable from prior. years.
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' Where the bread is butrered
The study estimaed that about $1.33 billion in urtside mooey comes into Pitkil county and stays thetc aunually. Secmd hmesaccounted for $453-l million. Tbe st$dy, performed for NWCTIOG by Lloyd Iwy of Denver, u'sad a complox firmula to fii;;at that figrre.
The key ie, the dollars measured must stay in the county, not jrnt pass through.
So' for example' if the Houstor-based Hines corporation sold n million-dollar tesidentisl lot at Aspen Highlardg &re sales priccwouldn't show up in the sludy because that meney flowed to'l'exas. The ule of a lot by a firll-tiure counff rcsrdcnt worU Ueincludcd.
The study estimated that $l15.5 million was spent on sccortd-lrooe constnrccion. Again, thar's jusr money that stays in thccounty, like carpente.rs' wages.
The study estimated that second'home owners spant another $i137,6 million annualy at tocal retail outlets and re6raurm$.
Mikc Tac6. a banker in Arpen fc 13 ycars, wasn't surpriscd at tle economic powet of second homes because tho vast majmityof his full-time local clients make their living from second homes.
"My clicnb' business is taking care of the seconrl-bome owners,'! he said. '"The plunbers are uaplugging thc tollctr in the secondhomeq- The landscapers are landscaping the yards of the second homes. The rets'ilers wtro anr aoinfilefiin the corc cater to thcserond homes,"
local dcpendenry on second horres has almost certsinly incrargerl during Taets, years in Aspen,
"The handwriting is on the wall," he said. ,,It has bcen for some time.,,
Ittlajoriry of housing urrits
After a 25-year building foenzy, second honres now accouut for' 55 percent ofthe roughly_13,000 housing units in Fittin County.The NWCCOG study a:'rivcd at that figure after an exsm of Pirkin 0ounry ascersor records.
Not surprisingly, second=home ownership is even grcalcr in th_c highcr price ranges. Second_home owners own 65 petccnt ofhomes priced b*ween $2 million and $5 mitlion. They on"o 73 peicent'or ne hJmcs priced abovc $j milliou.
Two-thirds of the condominiums in Pitkin county belong to second-home ownerl, verlrs 43 percent of the single.family homes.
And Taets is right alrcut the job dependency on second homes. While second homes accormt for 34 perccnt of the ouBide dolla$po{ring into the county, they account for roughly 40 percont oI'thc jobs crsarcd wben outside doltari flcw in, trcCoG's sody
Winter tourism accounts for 27 percent of those jobs, and sumrner tourism agcounls for I I perccnt.
Coming oft€n, e taying longer
It's notjust the sheer number of second-home owners that's affecting pi tkin County,s economy. It,s how they,rc spending theirrime, which influences how much they spend.
"Second-home orners me qgnding more rime here,,' said Breut Waldrorr, an Aspen real ostate agcnt for about 30 years and gparhler at Coates, Reid and Waldron.
In the 1970s, many second-hgm€ owners $penr up to two weeks pe.r year in Aspen and rented cheir dwellings out the rest of thetirne, acAording to Waldron,
Bnt now, he qontinued' "rnany people buying second homes wilr typica y use them two to four months,,,
According to lrwccQc, 44 pcrcent ef 5scond'homc owners $dd only they, their farnily and thcir ftiends used tbeir residence.Anothff 24 percent said their uuih were used by the owaers only.
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Almost 40 Persent said thcy will rcnt thsir ulits at least part ti:ne. Another 12 percent of second-home owners said grey rcnt fullume.
The inqeased$€ is portially due to tbe gralng of Arnerice- NWCCOC qitcd r national study showing tbat most second-homebuyers are in rhe 55-10-64 age group, followcd by 65 to ?4.
Waldron's firm has secn r,significant increase in the nurnbcr of retired clieats who sold e busincss or cashed in thsir cbcks toenjoy the mountain lifestyle.
Ceneus data shows 83 million Americans are between agos 35 anc{ 54. Those baby boomers comprise t}rc singlc biggea btock ofconrumerb in America. As they reach retirement age, second-home In$ccac like Aspen can "xpuct in teasingiemana.
But it's not just rerirees who are flocking to Aspen. An increasing number of profeesionals are using modern technology to spendmore time here. Taets knows of s stockbtoker who works duriug the heart of winrer in Aspen becauie he cal etay in tJricu vrittr
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the market elecfonically, thel hit the slopes after the rnarket closes.
Tac* tlso knows {n atttrney who works from Aspen part of the wcek and returns to bis big-city office for the othcr parr Thelawyer and srockbroker aren't alone, eaid Taets.
"These guys' mission in life is to frgure out how to spend moft: time hsre and less time rhere," he said.
fhe second'homE shrdy shows that I I percent use private aircr'aft to trf,vel to Aspeu. Another ?l percent usp commerciat flighr$,Look ia the mirror
Full-time resideflts of places like Aspen often contend thatvisitsrs.don't apprcciate the arsa like fiey do, but NryCCOO's studyshows secondhome ownerc ctn lay chim to being..locale" r.s wcll.
Vcnoroni sai! a gurvey of 123 full-time rmidents and 129 visitors in Pitkin County show they value many of the sarne thingsabout mountain life.
"It's not like we've got cullure wars going on here," she said.
For example:
'92 percent of full-time residents placed high velue on the scenic and visual quality, compared to 95 percent of eecond-homeowtrefs.
' 88 percent of full-timers ptaced e high value on recrcational opprxhmities, compared to 90 pcrcent of part-timers.
'78 pilcetrt of full-timers placed a high value on rns and cultural opportunities compared to 22 percent of part_timsrr
11.1sep_agte qnestion sbout recreadonal activities, second-honre otvners p,roved to be morc ,,local" tha.n locals when it came toskiing' Eighty-nioe percent of secoud-home ownen said they enjoyed dowtrhill skiing compared to 79 percent of full-timera.
Full-tirners were bigger hikers, 85 percent vercus T5 percent.
Goll on the other band, was a pastime undeftaken by 4l perce nt of secorxl-bome owrcrs, vergus 29 percent of full-timers.
Undersunding helps planning
The Northwest Colorado Council of GovcmmenB didn't conduct the srudy just tq come up with fun facls. VenturDni said rheintent was to help its ciients in Pithin. Eagle, Summit and Grsnd cou tie6 understard whai was clriving their economies and bowthe biggest driver, second homes, affects thcir communities.
"The more you understand, the befter you can plan,.' she said,
But some irrlpscG may be difficult or even impossible to offser.
Fm example. if 44 percent of primary jobs in Pitkin County are tied to second homes. and if the number of second homes is
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