Adjusting the cost

Council considers fee-in-lieu boost



Longtime Steamboat Springs resident Karen Vail stops to look at the downtown site where the Harbor Hotel once stood. The hotel has been leveled to make way for construction of the mixed-use development Howelsen Place.

— Making a payment to satisfy the city's affordable housing requirement could cost significantly more for developers in the near future.

During a Tuesday night work session to discuss housing issues, Steamboat Springs Planning Director Tom Leeson presented Steamboat Springs City Council members with two new calculations for "fee-in-lieu" payments, which developers pay the city instead of providing affordable housing units within a new project. The city's inclusionary zoning ordinance requires new developments to include - either on site, off site or through a fee-in-lieu payment - a percentage of its units as designated affordable housing.

While council members have debated for months whether the city should accept fee-in-lieu payments instead of simply requiring the construction of affordable units, council members are in agreement that the existing calculation for such payments is insufficient. The current fee-in-lieu calculation, adopted by the council in May, requires developers to pay the city $24,102 for every affordable housing unit they would have been required to build.

"I have yet to meet anyone in this town who can parlay $24,000 into a housing unit," City Council President Ken Brenner said last month.

On Tuesday, Leeson showed the council a new fee-in-lieu calculation for developments citywide and a calculation for developments within the boundaries of the city's Urban Renewal Authority, or special taxation district, at the base of the Steamboat Ski Area.

The new citywide requirement, according to Leeson, should be $88,132 per unit. At the base area, he said, the fee-in-lieu requirement should be $139,882.

Fee-in-lieu payments are intended to bridge the gap between the affordable purchase price and the market-rate cost of a housing unit.

The biggest factor behind the substantial increase is a larger market-rate cost per housing unit, which creates a wider gap to the affordable purchase price and therefore a larger fee-in-lieu payment.

In May, the market rate cost for a 900-square-foot housing unit in Steamboat, according to Leeson, was $217,800. In the November calculations, the market-rate cost for the same unit was $261,900 in the city and $306,900 at the base area.

"The numbers are escalating rather rapidly in the base area," Leeson told the council.

Leeson also raised the average monthly homeowner association, or HOA, payment used in the November fee-in-lieu calculation. The average HOA payment in Steamboat is $300 a month, he said.

The higher fees in lieu could significantly impact housing plan proposals for One Steamboat Place, a mixed-use development planned for a 4-acre site at the ski base.

Developer Timbers Company has twice proposed housing plans including a $418,772 fee-in-lieu payment for 17.4 affordable units, but the council rejected those proposals in August and October.

Leeson's new calculation, on which the council took no action Tuesday, would require Timbers Company to pay the city more than $2.4 million in lieu of providing 17.4 affordable units.

The payment amount would be determined by city housing policies at the time One Steamboat Place draws a building permit, which could occur in spring 2007 or later.

"You would use whatever payment we have adopted at the time the building permit is issued," Leeson told the council.

"Clearly, the big question is whether we want to allow fee-in-lieu (payments) for anything other than fractions," council member Towny Anderson said, clarifying that fees in lieu makes sense, for example, with the 0.4 remaining in the One Steamboat Place requirement.


another_local 10 years, 5 months ago

I would like if you all would buy me a house. Please?


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