Saturday, September 25, 2004
After the Northwest Colorado Council of Governments' presentation at last week's Steamboat Springs City Council meeting, there should be no debate about the value second-home owners bring to resort communities such as ours.
Along with that value, second-home owners also bring challenges. The question for the city is how to more equitably ask second-home owners to help meet those challenges.
The City Council presentation reflected a 2002 study conducted by the Council of Governments. The study evaluated the economic and social effects of second homes in Eagle, Grand, Pitkin and Summit counties. Routt County and Steamboat Springs, which are not members of the Council of Governments, were not included in the study.
Using census data, surveys of homeowners and other information, the study found that second-home construction and owners' spending accounted for 34 percent of outside dollars pumped into the region. The effect of that economic activity was 31,621 jobs -- 11 percent more jobs than were created from winter tourism.
As we have said before, such information should generate greater respect for second-home owners and the role they play in the financial and social health of our community. Second-home owners are vital to assets such as Strings in the Mountains, the Seminars at Steamboat speaker series, Emerald City Opera and the Free Concert Series. Our rural community of 10,000 people could not sustain such cultural amenities without the second-home owners' significant contributions.
Typically, those community contributions increase as second-home owners spend more time in the community. Many eventually become full-time residents.
But the positive effect of second-home owners does not come without problems. Most importantly, the study showed that each second-home owner generates a few jobs, mostly in the service sector, to support part-time residents and their new homes. Unfortunately, second-home owners tend to drive housing and others costs upward, while creating jobs for workers who require access to a lower cost of living.
The city of Steamboat Springs is funded almost solely by sales taxes. As a result, second-home owners' tax contributions overall are not proportionate to their effect on the community.
A property tax -- once the effects of the state's Gallagher Amendment are considered -- could be one means of shifting a greater tax burden to second-home owners. Coupling such a tax with sales tax relief -- eliminating sales taxes on groceries and/or utilities, for example -- could decrease the community's cost of living while maintaining or increasing city tax revenues.
n Dedicating a portion of building and/or impact fees to support affordable housing through the multi-jurisdictional housing authority.
n Creating a district funded by a dedicated property tax to pay for the city's single greatest cost -- parks and recreation. Several individuals, including Tennis Center Director Jim Swiggart and City Council President Paul Strong, have mentioned this.
The Council of Governments' study shows how important second-home owners' contributions to resort economies are. We hope the city's Tax Policy Advisory Board is taking those contributions -- and the corresponding tax burdens -- into account as it formulates its recommendations to the City Council.
The cost to construct the Tennis Center at Steamboat Springs in 1991 was $1.25 million, excluding the value of the land, which was donated. In current dollars, the cost was $1.75 million, city officials said. The Our View editorial published on Sept. 19 greatly understated the center's cost.