Part 7: A private-sector approach

Given incentives and the chance to make it pay, developers will provide affordable housing

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— The 29 houses at Tamarack Pointe are an example of how the private sector can try to address affordable housing, developer Michael Roberts believes.

Six years ago, Roberts built the Tamarack development in an attempt to find a process that would be cost efficient and could be duplicated. He understood the demand for affordable housing, and felt this was the best way to tackle it.

"I think the key to a successful private-sector project is mass production and to build enough units in a repetitive enough style for economies of scale," Roberts said.

While governments wrestle with finding the funding to address affordable housing and competing priorities, many experts believe the private sector can address the problem more quickly and more effectively.

"The best way to solve (affordable housing) is to create an opportunity for private capital and energy to come in and help solve the problem," said Rob Dick, executive director of the Regional Affordable Living Foundation.

Roberts said the biggest incentive for developers to build affordable housing is the demand. And as someone who sees affordable housing as the community's most urgent problem, Roberts believes the demand is huge in Steamboat.

It is not just the ever-increasing cost of land that keeps housing prices so high, Roberts said.

Custom-built homes, high labor wages and added materials needed for Steamboat's heavy snowfalls jack up the costs, Roberts said.

"A lot of the problems have to do with environment and small scale of community," Roberts said. "(The environment) is the real reason, aside from the going wage, that it costs more here than in Florida."

So to make development affordable, Roberts said, builders have to mass produce the product. That means 50 to 100 units going up in one development, which takes huge amounts of capital and a significant degree of risk.

Roberts said there were learning curves in doing a large-scale project like Tamarack Pointe as the planning process and scheduling contractors slowed him down.

Despite the building delays, his houses had no trouble selling when they came on the market six years ago with prices ranging from $85,000 to $165,000.

"It was successful in terms of providing housing to individuals who had been

waiting for housing, who otherwise didn't have an opportunity at those prices," Roberts said.

Developers like Roberts would prefer the private sector come up with the solutions, but governments can nudge or even shove developers into building affordable housing.

The City of Steamboat Springs does have incentives for developers and the West of Steamboat Area Plan even requires developers to inc-lude affordable housing.

An affordable housing matrix exists at the city's planning department.

If a developer decides to build an affordable housing unit with some restrictions on who can live in the home and how it is sold, the city waives development permit fees, the building permit fee and the landscape bonding requirements.

Those concessions increase as the affordable housing becomes more restrictive in terms of who lives there and how it is sold.

In the highest level of restrictions, meaning the house would be sold through a housing lottery and have resale controls, density could increase and the use tax and tap fees would be subsidized.

The matrix has been around for two years, but City Planning Director Wendie Schulenburg said RALF's West End Village Project is the only development to take advantage of the incentives.

The mandatory inclusionary zoning in the West of Steamboat Area Plan is another affordable housing tool that has gone largely unused.

The plan stipulates that one-third of all housing developments be affordable housing, meaning that Routt County workers making 120 percent or less of the average median income would be spending 30 percent or less of that income on housing.

So far none of the land in the West of Steamboat Area Plan has been developed.

"I think we still have an opportunity to create some solutions," County Commissioner Nancy Stahoviak said. "We created solutions before in the West of Steamboat Area Plan, but no one made an attempt to do that. We need to go back and revise that and figure out why it is not working."

Though Steam-

boat is still working out the kinks in its interaction with the private sector, a host of models already exist on how the everyday citizen has found inventive solutions to solve the housing crisis.

One of the most creative is Butcher-knife, a co-housing project Dick developed three years ago. The project in a meadow off of Conifer Circle includes a group of 10 families who worked together to build 10 units that achieved cost savings through economies of scale. By using the same housing layouts, building a communal parking area and having the group make the decisions that a general contractor would make, Butcherknife homeowners were able to reduce costs.

For two years, the group met once a week to decide on everything from window styles to if dogs should be allowed to roam free.

Danielle Skov said the process was arduous but it kept their three-bedroom home under $200,000, something they could not find anywhere else in Steamboat.

"Some people in the community think our housing was in some way subsidized," Skov said. "The only reason it was affordable is because the decisions we made and the way we did things other people might not do."

For Dick, the private-sector solution lies with convincing developers that the community wants diversity. Unlike recent subdivisions where developers build rows of million-dollar homes, Dick said affordable housing could work and communities would be healthier if developments mixed income levels.

He points to Old Town, a section in Steamboat that intermingles millionaires, Colorado Mountain College students renting housing for the semester and working class families.

"A lot of wealthy people choose to live in Old Town where you do have differences in income," Dick said. "My suspicion is that the type and quality of living is very attractive to certain segments of the community."

One of the challenges with trying to do affordable housing in Steamboat and other mountain communities is that neighbors of the proposed projects often misunderstand and oppose such developments. Everybody wants affordable housing, just not in their backyards.

Kirk Kobert, the program director for the Rural Local Initiatives Support Corporation, one of the nation's leading non-profit organizations for community development, said affordable housing developers must work with neighbors from the start to prevent the NIMBY not in my back yard syndrome.

"Bring people into the process early before you go to zoning," Kobert said.

"Tell them this is who it is going to be for teachers, firemen, policemen, and accountants. This is not going to be welfare housing."

Another way to gather community support is to build affordable housing that is high quality and compatible with the community.

Kobert recalled a project that his organization did in Taos that matched the surrounding adobe buildings.

"It has to fit in with the community and it has to last 50 to 100 years," Kobert said.

Gathering community support might be the most intangible characteristic in solving affordable housing, but experts claim it is one of the most important.

"You really have trouble if you have a town that is not supportive of a project," said Barb Hughes from the Colorado Rural Development Housing Corpora-tion, who has worked with affordable housing projects all over rural Colorado.

While the private sector may be better equipped to address affordable housing, Kobert said elected officials have to send a strong message that they support it.

"Governments need to be behind it," Kobert said.

"They need to commit and see this as a priority. City staff is directed by council and they need to know that this is a priority, because they are not going to do this on their own."

As a city planner, Schulenburg knows first hand what it means when a community is unwilling to back affordable housing.

"We support affordable housing, but we don't want to pay for it," Schulenburg said. "There is a divide in the community and that is why we haven't been able to come to a consensus."

But Schulen-burg hopes a consensus will come in the community update plan as community members work at finding ways to encourage affordable housing.

As someone who has spent years working on Steamboat's affordable housing problem, Dick insists a community commitment is needed.

"We are a small community. We are a wonderful community. We are an intelligent community. We have the ability to create something that is better than anywhere else if we have the desire to do it."

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