Steamboat Springs The Steamboat Springs City Council may have approved new affordable housing policies last week, but its work is hardly done.
Foremost, the council needs to clarify for the public exactly how the significant revenues from the new policies will be spent. This is overdue - putting the policies in place without a concrete spending plan put the cart before the horse.
Also, the council needs to be prepared to modify the policy as needed. Council members appear confident the new ordinance will produce the desired outcome - an increased supply of affordable housing for Steamboat's working class. We're less convinced. In fact, we remain concerned the policies will achieve the opposite - reduced development, decreased housing inventory and even higher prices.
The bottom line is the council has to be flexible and react if the new ordinance isn't working. Allowing bad policy to linger unchecked is worse than approving it in the first place.
The inclusionary zoning and linkage ordinance accomplishes several things. First, inclusionary zoning requires 15 percent of the units in all new residential development to be deed-restricted affordable housing. Thanks to a last-minute addition advocated by Councilman Towny Anderson, developers have the option of paying fees in lieu of building the affordable housing.
Linkage requires new development to help pay for housing for the new workers the development creates. This can be done by building housing or paying a fee. The number of required units and the fee are based upon square footage. Commercial developers pay the highest rate of linkage. Homeowners will have to pay linkage fees on home additions on a sliding scale at rates that are lower than commercial development. Industrial development and nonprofits are exempt from linkage requirements.
For commercial development, the linkage fee works out to about $18 per square foot or $1 million in fees for every 55,000 square feet of new development. That is a lot of money when you consider that the five downtown projects currently in development total almost 500,000 square feet. Add in other linkage fees and payments-in-lieu and the city is going to have serious money for affordable housing.
We would venture that in an average economic year, the linkage fee will produce millions for the city, assuming the fees don't scare developers away altogether.
The city should use the new money to give the Yampa Valley Housing Authority - an agency the city created - a much needed boost. The authority and its predecessor, the Regional Affordable Living Foundation, have completed a handful of effective affordable housing projects in the past decade despite having almost no funding.
Yet, the city has largely excluded the authority from discussions about the new housing ordinance. While the city gets ready to start collecting millions in fees and payments, the authority is weighing a long-shot stab at getting permanent tax funding.
Council members Anderson and Loui Antonucci indicated last week that they think helping the Housing Authority is the best use of those funds. Here is what isn't the best use of those funds: creating a separate, competing housing department under the city umbrella. We can only hope the vision of Anderson and Antonucci prevails.
The policy adopted last week is a milestone in city history. It is the most significant housing policy any council has ever adopted. But the jury is out on whether it will work, and when it comes to how the fees will be used, the city still has a lot of explaining to do.