Part 3: Second-home owners drive housing market

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— On any given day, the city of Steamboat Springs is only half here.

From the mountain to the valley floor, houses lie empty, waiting for their part-time residents to return. The sun shines through multimillion-dollar views onto furniture shrouded in dust covers.

Second-home owners are a big part of this community. In fact, at 48 percent, they are a very big part.

Harris Silver and his wife, Anna, spend the winter in Sarasota, Fla., and the summer in Steamboat. They head east four times a year for their "New York fix," and, since retirement, are following their dream of spending a month a year in another country.

Harris has skied in Steamboat since the days of the old gondola and bought his first property, a condo on Apres Ski Way, in 1989. He made the purchase over the phone, site unseen.

The duplex where the Silvers now spend summers is their dream design. They built it with 360-degree views and large living room windows facing Mount Werner. The windows are draped with theater scrim and burlap like a stage, with the Yampa Valley as the solo performer.

Their home is accented with sweeping art nouveau railings made by local sculptor Jim Selbe. French antiques and art fill every corner of the house.

"I am getting to an age (63) when I don't know what will happen with my health tomorrow," Harris Silver said, "so we are trying to do everything we've always wanted to do while we still can."

Harris Silver paid his dues as an attorney in New Jersey. Now retired, he is carefully sculpting a relaxed lifestyle, far from the fast-paced, crowded years of his past.

To the Silvers' their Steamboat home is a quiet, cultured refuge. But to many in the city, the Silvers' home and houses like it drive the debate about who can and who cannot afford to live here.

From the outside

Second homes play a huge role in Steamboat's real estate market and the community, creating unique issues.

If Steamboat Springs were not a tourist town, if it had an industrial or manufacturing economy, the city's real estate market would be manipulated from the inside rather than the outside, said Rob Dick, executive director of the Regional Affordable Living Foundation.

In a town such as Pittsburgh, Dick said, the amount of money residents make determines the homes they can buy. "People are not moving in from Steamboat and buying houses in Pittsburgh," Dick said. In Pittsburgh, "they are local people buying homes with local dollars. I would never be able to buy the home that we bought with dollars that we made in Steamboat. It's easier to make money in St. Louis, for example, than in this town."

The result is an increase in price above what locals can afford.

"It has certainly gotten worse since I arrived nine years ago," Dick said. "Our first house was on Pine Street in Old Town. We paid a little over $300,000. Right now it's on the market for $690,000."

Pointing blame

The struggle to find an affordable home in a market dominated by high-end vacation properties leaves families looking at building lots priced at around $90,000 and scant few single-family homes for less than $250,000.

It also leaves those who can't afford property searching for someone to blame. Often, fingers point at the empty houses.

Mention second-home owners to longtime local Doug Lockwood and he immediately bristles.

"It surprises me, the arrogance of these second-home owners," he said. "They come for two weeks a year and they want to have local status. They want to use Haymaker Golf Course at local rates."

Lockwood owns his home a mobile home but does not own the land underneath it. For years he rented a lot in downtown Steamboat, but when the property sold for $630,000, he was displaced for tennis courts and a parking lot.

When Lockwood was displaced, he realized how few his options were. He moved his trailer to Oak Creek more than 20 miles south. It was the closest lot he could afford.

He blames second-home owners.

"I think they are getting a hell of a deal not paying (city) property taxes," Lockwood said. "Make them pay. They can afford it. What are they going to do if we charge them? Not come here anymore? Oh well. That would break my heart."

Dick said part of the problem is that Steamboat's housing market is designed to meet the needs of second-home owners.

"The houses are not built for local people anyway," he said. "Those that are interested in making money in real estate search to satisfy the needs of the second-home owner."

Developers have little incentive to build affordable housing for locals. There are no tax breaks for such projects and the profit simply is not there when compared to the higher end of the market, said Randall Hannaway, president of the Steamboat Springs Board of Realtors.

"There is a huge amount of work and a huge amount of risk in building affordable housing," he said. "For someone to take it on, they have to have more of a reason than just being a good guy."

Part of the community

Just as second-home owners drive the building market, their needs also create services that normally would not exist in a remote mountain town of 10,000 people.

For example, Steamboat Springs Airport Manager Matt Grow said second-home owners account for a third of the airport's business. They are charged more for fuel than pilots who live in Steamboat and store planes at the airport.

"Second-home owners keep the airport open," Grow said.

When second-home owners do arrive for the summer or for a ski weekend, they are only half accepted in a town whose residents proudly cull the locals from seemingly less-committed seasonal employees and visitors.

Those who live here part time, however, do not see the separation as clearly. "I don't feel like a tourist," Harris Silver said. "All my friends are local and I feel like part of the community."

Those in Silver's position contribute money to local charities and cultural events.

"Many of our members are second-home owners," said Nancy Kramer, executive director of the Steamboat Springs Arts Council. "They contribute money even though their business and core is elsewhere. A few have even sat on our board. A few of them are artists who contribute to exhibits."

Even if they never volunteer or give philanthropically, all pay property taxes to Routt County and the local school district.

Homeowner profile

Hannaway said the average second-home owner is 52 years old, comes from the Midwest and ran a small manufacturing company that grew over the years. His family has been coming to Steamboat for 20 to 30 years.

"They know more about our town than we know," Hannaway said.

Jim Bronner, who came to Steamboat for the first time during the summer of 1970, doesn't see himself as an outsider.

He and his wife wandered into the town during a thunderstorm. They had been camping and his wife was pregnant with their first child. They opted for a bed at the Nite's Rest Motel.

Almost immediately, they started looking for some real estate. They bought their first place in 1973 in Ski Time Square.

Steamboat remained a part of their lives as they had their second child and built a life in Chicago.

They now own a house on the mountain where they live seven months out of the year.

Jim Bronner's life has slowed considerably since he sold his baseball agency, Speakers of Sport, in 2000. In Bronner's career, Speakers represented such major league players as Pedro Martinez, Larry Walker, Jim Thome and Juan Gonzalez.

Still, Jim Bronner does not consider himself retired, and even though he may not live here year-round, he considers himself a Steamboat Springs resident.

"My wife and I love this community," he said. "We've contributed to charities here, such as The Nature Conservancy."

He has also provided baseball memorabilia to a number of charitable golf tournaments, volunteered his time for the girls basketball team last winter and plans to teach a three-week course at Colorado Mountain College, "Contemporary Issues in Sports."

The tax question

If homeowners such as Bronner are contributing to the community in other ways, should they be punished for tipping the real estate market scales? Are they the villains in Steamboat's affordable housing dilemma and should they be asked to contribute more to the solution?

City Councilman Bud Romberg would say yes.

"People who live here part time are getting a free ride on the backs of the people who are living here full time," Romberg said.

"(More than half) of residences are registered to non-local addresses. Our city is run on sales taxes and so those people are not paying for the support they receive such as fire, police and maintenance of streets."

Romberg advocates the creation of a city property tax. The City Council has voted to put two property taxes totaling 7.8 mill on the ballot for the November election. If approved, the taxes would be the first property taxes the city has had in two decades.

"With property tax, everybody who owns property in the community would be paying their share," Romberg said.

Unlike states such as Wisconsin and Minnesota, where secondary properties are charged double and triple the tax rate for primary residences, there are no breaks or increased rates for second-home owners, said Patrice Dodson, chief appraiser at the Routt County Assessor's office.

Harris Silver strongly disagrees with people like Romberg who feel he does not contribute enough financially to the community.

"The part-timers produce a lot of the tax base and we use almost none of the services," he said. "We have no kids in the schools. In a sense, we are subsidizing the locals who live here full time."

Currently, all homeowners, primary and secondary, pay property taxes to the county and school district, but not to the city. They pay on only 9.15 percent of their assessed property values, Dodson said.

Routt County collected $31.5 million in property taxes last year, Routt County Treasurer Jeanne Whiddon said. To compare, the city of Steamboat Springs collected $13.8 million in sales taxes last year.

Ironically, most second-home owners in Steamboat Springs won't have much say in the property tax election that could significantly affect their wallets. Second-home owners may vote here only if they give up the right to vote in their primary residences.

Helping conservation

Punch Martin is registered to vote in Florida though he lives in Steamboat six months out of the year. That leaves his hands somewhat tied when residents make decisions he does not agree with.

Martin lives half of the year at Catamount Ranch on nine acres. A view of the valley pours below a wall of windows.

He pays enough in property taxes, he believes. He contributes philanthropically to Strings in the Mountains. But above his financial contributions, he considers the high-end developments such as the one where he lives to be a major engine for open space conservation.

Catamount's listing broker, David Baldinger Jr., said the ranch itself encompasses 700 acres, 25 homesites and a golf course. The Catamount Ranch and Golf Course is half of a two-part development, which extends over 3,000 acres combined.

The entire property, he said, is under a wildlife conservation easement, which places limits on noise and where one can build to allow natural elk migration.

"If you look at the proposal submitted for Catamount in the 1980s, there were plans for 4,000 homes and a ski area," Baldinger said. "The trend is shifting away from high-density development to something more responsible."

Baldinger did not believe the development would negatively impact the affordable housing market.

"It is in a different area and a separate market from single family homes for locals," he said.

Martin's home at Catamount Ranch is not his first in Steamboat. He and his wife purchased a condo in 1980. They sold the condo with plans to buy a home but ended up renting for 10 years while they looked for the ideal site.

He and his family have been coming to Steamboat since 1972, when they first visited his wife's college roommate.

Martin owns a couple of citrus farms in Florida, which he started himself, and an insurance agency. As a native of southern Florida, he has seen the kind of growth Steamboat fears.

"I suggest that development is going to happen. It just happens to be a more recent phenomenon in this area," he said. "The only thing you can control is the density, and I think these high-end developments have preserved the valley floor."

Hannaway agreed high-end homes keep the population small and preserve the beautiful surroundings from dense development.

"If this place was affordable," he said, "everyone would be living here. If you could buy a nice home in Old Town for $150,000, how many of those could we build before it would be enough?"

Unfair targets

Hannaway said second-home owners are unfairly blamed for creating housing problems. "I think people are holding grudges about the wrong thing," Hannaway said.

Locals are as much to blame for the high price of housing as anyone, he said.

According to a 10-year comparison published by the Routt County Regional Building Department, building in Steamboat was running steadily at $40 million to $50 million a year. In 1998, however, the value of new building projects in the city went from $39 million in 1997 to $169 million.

The rise was mostly because of two large projects: the new Yampa Valley Medical Center and the Steamboat Grand Hotel and Conference Center. For the next few years, there was a lot of work for anyone in the building trade.

According to the same report, the value of single-family home building was also on the steady incline. In 2000, contractors built $49 million worth of new housing, up from $17 million in 1992.

The large projects have ended and the house building has started to decline. But the costs of labor and materials that shot up during the boom have not gone down.

About a third of John Schively's business as president of Schively Construction Inc. are second-home owners. The homes he builds range from $500,000 to several million dollars.

Schively said business has steadily increased over the years and the houses have been getting larger.

The boom in the late 1990s definitely affected the labor market, he said.

"It provided a tremendous amount of income to the people of Steamboat," Schively said.

His labor costs did go up, and though they have leveled off, he agreed, they have never gone down.

"I don't have a problem getting competitive prices on materials because I can go elsewhere if they are too expensive in Steamboat," Schively said. "Labor is something that I have to get here."

Dick and Hannaway agreed labor costs made it disproportionately expensive to build in Steamboat.

Hannaway believes the city of Steamboat will never see affordable housing because the necessary parties will never cooperate.

"Steamboat needs to take action or quit talking about it," he said. "It should be a priority of the community to find a way for professionals with modest incomes to stay here.

"But people think they can move to a very desirable ski resort with great year-round weather and buy a house for nothing."

Second-home owners are buying their "dream homes" late in life after years of work, he said, and Steamboat needs to become more tolerant.

Dick believes setting aside "inclusionary zones" in Steamboat may be a way the two classes can live side by side.

A growing number of cities and counties have adopted "inclusionary zoning ordinances" requiring developers to include a percentage of affordable housing units as part of new developments.

The goal is to provide housing opportunities for workers who would otherwise be unable to afford to live in the community.

"We are interested in conserving for nature and wildlife, but the community also needs to preserve land for the people who live here," Dick said.

A free country

Dick said second-home owners have a right to buy in Steamboat, to come and go as often or as little as they please and to contribute as much or as little to the community as they see fit.

"It is, after all, a free capitalist country," he said.

Martin said he and other second-home owners have earned their right to be here and he feels their presence has benefited the community in ways that often go overlooked, such as the preservation of open space.

Martin plans to continue to spend more and more time in Steamboat, contributing both financially and with his perspective.

Years ago, Martin's son taught at the Lowell Whiteman School. But like many, he was unable to make the money he needed to live comfortably and support a family. He decided to move back to Florida to ensure his financial future.

"He aspires to have a second home here someday," Martin said.

"I can see both sides," he said. "(Second-home ownership) is a knife that spreads one way and cuts the other."

To reach Autumn Phillips call 871-4210

or e-mail aphillips@steamboatpilot.com

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