Steamboat Springs The Steamboat Springs City Council should reconsider aspects of its new community housing policy before approving it Tuesday.
Specifically, we are concerned the ordinance requires nonprofit organizations to pay linkage fees at the same rate as commercial development.
The council approved the first reading of its revised housing ordinance May 22. The ordinance regulates how the city provides affordable housing in Steamboat's real estate market and will increase building requirements and fees for developers.
To its credit, the council has held months of public debate on the topic before casting its first vote. A second and final vote on the ordinance could come Tuesday.
Central to the ordinance is its linkage policy. Under linkage, developers are required to compensate the city, either by a fee or by construction of affordable homes, for a percentage of the new work force housing need the development theoretically will create.
The city has developed a formula for determining how much a developer has to pay in lieu of building homes under the linkage policy. The formula factors in the number of jobs created per 1,000 square feet of development and the number of workers and housing units needed per new job. The net result is a fee of about $18,600 per 1,000 square feet of new development.
That means a new 50,000-square-foot commercial development would be required to build 7.1 affordable housing units or pay the city a fee of $931,000.
The city has decided not to exempt nonprofits and government agencies from linkage, arguing development in those sectors requires new jobs just like commercial development.
But the fees are harder on nonprofits, which cannot pass them on to buyers or clients the way commercial developers can.
The new Lufkin LIFT-UP Center built last year is 8,000 square feet. Under linkage, the nonprofit agency that provides food and clothing to needy residents would have been required to pay the city almost $150,000. As it was, the agency struggled with increasing construction costs. An additional $150,000 fee could have jeopardized the project, LIFT-UP Executive Director David Freseman said.
"The concern is that not-for-profit organizations are reliant on agencies like the United Way, government and charitable groups because nonprofits have no income to use if they must expand to meet a community need," said Karl Gills, the chief executive officer at the nonprofit Yampa Valley Medical Center.
Gills, Freseman and other nonprofit directors plan to address the council Tuesday. If they can't get nonprofits exempted from the linkage requirement, they will ask the council to consider evaluating nonprofit projects for exemption on a case-by-case basis.
"I would hope that the members of the City Council who support the community housing ordinance would take a moment to consider the unintended consequences on some of the community agencies that provide vital services to our residents," Gills said.
The city's efforts to spur the creation of workforce housing in our community are noble; however, doing so at the expense of agencies that provide equally important services to those workers is counterproductive.
We have broader concerns with the housing policy such as how the funds will be used and whether the policy will serve as an impediment to, rather than a catalyst for, work force housing. But we have hammered those points before to no avail. The nonprofit issue is an easy fix that we urge the council to make Tuesday night.