Affordable housing options pondered

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— One of Steamboat Springs' greatest hopes for affordable housing sits dormant in the land west of town.

When the City Council and county commissioners approved the West of Steamboat Springs Area Plan three years ago, it was part-development plan and part-affordable housing solution. The plan allowed for the creation of up to 2,600 new dwellings and required one affordable housing unit for every two built.

But nothing has happened. Not a single plan for that area has even come through the city's planning department.

Landowners, developers, elected officials and city staff will give different reasons for why the land has remained undeveloped: A special general improvement tax makes it too expensive to create affordable housing; the plan has demanding and conflicting requirements; it is cheaper to develop within the city limits.

"High land costs, a general improvement tax and a lot of property owned in large parcels, none of these factors work toward facilitating development," said Rob Dick, executive director of the Regional Affordable Living Foundation.

Regardless of the reason, as the West of Steamboat Area remains stagnant, growth in Steamboat continues. But for those working in Steamboat, the best chance of finding affordable housing lies in the outlying towns of Hayden and Oak Creek.

On Tuesday, a resolution will come before the City Council to endorse a five-step solution for affordable housing. In all likelihood, the resolution, which was created by the Two Plus Housing Committee, will be tabled a second time.

The council supports the committee's recommendation to form a multijurisdictional housing authority that has the power to levy taxes, create inclusionary zoning and form a task force to remove regulatory barriers.

But the stumbling block for the council was the committee's recommendation to eliminate a general improvement district tax in the West of Steamboat Area.

The tax was imposed under the theory that new growth must pay its own way. It is supposed to cover the added cost for building and maintaining new infrastructure as the city annexes land in West Steamboat.

Eliminating the tax is a decision that would alter a key element in the West of Steamboat plan, which took four years, more than 100 public meetings and 17 draft documents before being approved in the late fall of 1999. The plan is also part of an intergovernmental agreement between the city and the county.

"We would be changing policy that has been instituted not just by the city. This was a joint thing at the time it was passed," City Councilman Bud Romberg said. "I am not sure the city is in a position to make a change without conferring with county commissioners."

Romberg also has trouble swallowing all the recommendations from a committee not appointed by the council. The Two Plus Housing Committee was formed in the aftermath of the defeat of the 2000 ballot referendum asking voters to approve a $2 per-square-foot excise tax on new development in the city, which would go toward affordable housing. The committee drew from people who supported and opposed the referendum.

"This is a small group that has come up with these ideas, not the community as a whole," Romberg said. "I think we can endorse in concept what they have said, but we are not ready to accept wholeheartedly the concept, take this thing and follow everything they said to the letter."

In an Oct. 15 meeting with the county commissioners, the City Council had directed staff to write a resolution supporting all of the Two Plus Housing Committee's recommendations. But when the resolution came before the council on Nov. 5, Councilman Paul Strong recommended postponing the decision for two weeks.

And when it comes before the council on Tuesday, Strong said there is a likelihood the recommendations could be handed over to the members of the affordable housing working group, which is helping to write the update to the Steamboat Springs Community Area Plan.

Strong said he is just not ready to support all of the recommendations before looking at how it would affect the West of Steamboat plan.

And county commissioners are following the city's lead. Commissioner Nancy Stahoviak said the county was waiting for the city to pass a resolution before making a decision. But Stahoviak, who was in office when the West of Steamboat plan passed, said the plan needs to be reviewed and some new affordable housing measures, like inclusionary zoning, might have to be put in place.

What went wrong

Former City Planning Director Wendie Schulenburg, who vacated the position on Friday, pointed to three roadblocks for developing west of Steamboat: little demand, landowners unwilling to sell and, until now, a lack of direction from the city on how to build.

With land still available in the city limits, Schulenburg said, it is easier for housing to go where infrastructure already exists. Infill, or developing available land in the city, is something the city's community plan encourages. Infill does not provide a solution for affordable housing, but it does mean developers can take advantage of existing roads and sewer and water lines.

"When you develop a new area without infrastructure, it is always more expensive than infill with streets and roads," Strong said.

And once the land inside the city limits is eaten up by development, Schulenburg sees the demand for building west of Steamboat increasing.

One of the plan's major obstacles is the landowners' unwillingness to sell the land. It is for good reason, said Mary Brown, a former City Council president who shares ownership in the area's largest piece of land.

Brown said significant developers have looked at the 540 acres she owns with Steve Brown. But after figuring in the one-third affordable housing requirement, general improvement district tax and lack of city direction, those developers were not willing to go through with the project.

"They don't believe they can make it work," Mary Brown said. "There is no way to build affordable housing and meet the requirements. It is a very difficult plan to implement; that is why you haven't seen development out there."

Enough options exist in Northwest Colorado that builders are not willing to be burdened by the tax and the affordable housing requirement, Brown said.

On the top of Brown's list of planning complaints is the lack of direction. She said the plan does not even define what affordable housing is and does not set guidelines for when the house is resold and if the affordable housing restrictions remain with it.

Brown also said the planning process takes too long. She said plans have been made and developers have met with the city and county, but she was not willing to put the land under contract as it went through the planning process.

Two years of uncertainty was something Brown was not willing to tolerate. That reluctance was reinforced when she watched the West End Village Project labor through planning before getting city approval.

By the time RALF received approval for the West End Village Project, Dick was ready to pull out his hair, he said. In the city's first affordable housing project that allows residents to own their homes, West End Village struggled through the conflicting requirements made by the city's planning and public works staff.

"You want to design this a certain way, and the planning process wants to design it another way, and public works wants to design it another way," Dick said. "There is a conflict between the design objectives of city planning staff and the requirements of public works. And it is frustrating and then it gets expensive."

Schulenburg admits that until last year, there was no clear plan for public works, but she still believes the West of Steamboat plan can work.

"Until this last year, the Area Plan Coordinating Committee was not sure how to handle roads, water and sewer. And the intergovernmental agreement regarding West of Steamboat had not been completed," Schulenburg said. "No one had direction on how to proceed."

With the confusing planning direction, Brown said the idea of abandoning the West of Steamboat plan and turning the land into 35-acre lots is tempting. Under state law, property owners can divide their land into 35-acre lots and not follow city requirements or even go through the city's planning process. It might mean fewer headaches for the landowner, but it would also mean fewer houses and no affordable housing for the community.

"It is not being done very much," Brown said. "But I think it is really a possibility, certainly something we have considered, but we haven't done it."

But the biggest frustration Brown has is that landowners and developers are not given any incentives for providing affordable housing. Rather, Brown said the developers are given a disincentive through the general improvement district tax. And Brown said that is unlike many communities, which are willing to work with developers that have projects meeting their planning objectives.

"Many of these projects to date have no indication that they will be welcomed with open arms," Brown said. "If you want to give an indication to landowners, say, 'Yes, we want to see this happen' and 'How can we work with you to get this done?' That incentive has not occurred yet. And, until it does, I think people will shy away."

Making the plan work

Providing incentives is one way to get Brown to sell the land. And while loosening the affordable housing requirements or lifting the general improvement district tax is the surest fix, it could also be allowing more density and promising a faster planning approval process.

Strong might not be ready to lift the general improvement district tax just yet.

In a government heavily reliant on sales tax revenue, without a general improvement district tax the city would be subsidizing new growth, Strong said. Development west of Steamboat would mean the city would have to pay for the increased services of road repair, snow removal and fire and ambulance services without generating more taxes.

That scenario leaves the city with no incentive to annex property in the West of Steamboat Area and would actually mean the city would be in worse financial shape, Strong said.

But if some form of property tax were substituted for sales tax, the incentive would be there.

"Maybe we could talk about a property tax/sales tax swap. Once you get property taxes, a source of income, annexation starts providing revenue," Strong said.

Another possibility, he said, would be to have the city lift the general improvement district tax in the name of affordable housing.

"We would want everyone to realize that this is a contribution to affordable housing. That is what it would be, a contribution," Strong said.

Working for the Two Plus Housing Committee, Dick has lobbied for the city to lift the general improvement district tax.

But he would also like to see the city's requirement for a new urbanism design gone. The concept of providing gutters, alleys and curbs is too expensive and unrealistic for affordable housing, he said.

"The design of new urbanism should not be used for that area," Dick said. "It is best for downtown, not out in more rural areas."

But he admits the West of Steamboat plan might not be the answer to Steamboat's affordable housing problem. Another solution, Dick said, would be to require inclusionary zoning in the infill areas or to make concessions by giving a higher density for those developers building affordable housing.

"It may be that (west of Steamboat) is not the place to build affordable housing," Dick said. "Maybe what we need is more intense density, developing closer to town to jobs and core transportation patterns and close to schools."

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